Understand Facebook Ad Algorithm ABO vs CBO

Advertisers who can run multiple ad sets or multiple campaigns have two options to structure and optimize their campaign. Number one is Ad set Budget Optimization (ABO). Number two Campaign Budget Optimization (CBO). Before understand the concept. Let’s take a look on Facebook Campaign Structure.

There are three layers first is Campaign, second is Ad set and third is Ad. Each campaign corresponds to a single advertising object like driving website traffic. Each campaign can have multiple ad sets with difference targeting. Further on each ad set can have multiple ads. Understand ad algorithm form previous article

Now we know the structure of Facebook ads it will be easier to understand the concept of without campaign budget optimization and with campaign budget optimization.

On the left screen we can see campaign structure that is set on ad set budget optimization. There are three ad sets in the campaign with a budget of 10 dollar for each ad set. On the right screen we can see another campaign structure that is set on campaign budget optimization. This campaign also has the same three ad sets but the budget of 30 dollar is set on the campaign level not on the ad set level.

Now take a look on the results of both campaign types. Total conversions that are derived from without campaign budget optimization after spending 30 dollar or 10 dollar. Form ad set one there are three sales, from ad set two there are five sales and from ad set three there are tow sales. Whereas the total conversion derived from CBO campaign after spending 30 dollar or 15. Ad set one spending is 7 dollar and it gave 3 sales. Ad set two consume the majority budget that is 18 dollars and gave 10 sales. Whereas ad set three has spend 5 dollar with 2 sales. As we see in the chat without budget optimization. We are giving the same 10 dollars to all assets instead of giving more budget to the ad set. That is converting well for us. With campaign budget optimization enable Facebook is automatically taking the budget and redistributing it to the better performing ad sets. Here in this example ad set two is clear winner.