Everything About Campaign Budget Optimization You Need To Know

Mastering campaign budget optimization (CBO) has become crucial for brands and marketing teams seeking to create efficient and effective ad campaigns. CBO is a strategy that enables advertisers to allocate their budget dynamically across ad sets to achieve optimal results. Let's delve into the essentials of CBO and how it can revolutionize your Meta and TikTok advertising efforts.

Campaign budget optimization (CBO) is a feature offered by platforms like Meta (Facebook and Instagram) and TikTok that automatically distributes your campaign budget across your ad sets to maximize the overall impact of your advertising campaign. It's a powerful tool designed to help advertisers achieve better results by allocating more budget to the highest-performing ad sets while scaling back on underperforming ones. In essence, CBO streamlines the budget allocation process, optimizing ad delivery to reach the most relevant audience segments and help social teams leverage their best, revenue-driving content.

The best time to use Instagram or Facebook campaign budget optimization depends on various factors like your campaign objectives, audience targeting and available budget. However, for most advertisers, CBO is recommended for campaigns with multiple ad sets targeting different audience demographics or with various placements.

Campaign Budget Optimization for Meta

On Meta, CBO seamlessly integrates into the Ads Manager interface. After enabling CBO for your campaign, Meta's algorithm will automatically distribute your budget across the ad sets within the campaign based on their performance and potential for achieving your desired outcomes.

To set up CBO for Meta, navigate to the Ads Manager and select the campaign you want to optimize. Within the campaign settings, you'll find the option to enable CBO. Once enabled, you can set your overall campaign budget and specify bidding strategies based on your objectives, whether optimizing for conversions, leads, link clicks, or impressions. It is important to note that CBO requires a minimum of two ad sets to function effectively.

Campaign Budget Optimization for TikTok

Although Dash Social's paid metrics primarily focus on Meta performance, exploring campaign budget optimization on other popular platforms like TikTok can be beneficial. While the process may vary for TikTok ads, their platform also offers similar budget optimization features to enhance ad performance and ROI. 

To set up CBO for TikTok, follow these steps: 

• Create a new campaign and select a supported Campaign Objective (Video View, Traffic, Catalog Sales, Lead Generation, Community Interaction, App Promotion, Website Conversions or Outreach).
• Turn on the CBO toggle.
• Choose between a Daily and Lifetime budget.
• Select a Bid Strategy of either ‘Lowest Cost’ or ‘Bid Cap.’

Keep in mind, when configuring your ad groups later, they all need to share the same optimization goal. 

The CBO may automate budget allocation across ad sets, but achieving optimal performance still requires smart budgeting habits and a strategic approach. These four foundational practices will set you up for success.

1. Set Clear Objectives and KPIs: Before you hit go on budget, define what you’re trying to achieve. Are you driving website traffic, generating qualified leads, or increasing sales? Set measurable targets (e.g., “generate 100 new leads this month” or “reduce CPA to $25”). Without a defined goal, you won’t know whether your budget allocation is efficient.
2. Analyze historical performance: Look back at previous campaigns: which audience segments worked, which creatives drove conversions, and what was the cost per acquisition? Drawing these insights helps you allocate your budget based on what has been effective, rather than starting from scratch.
3. Run tests, then reallocate: Budget optimization is not a ‘set it and forget it’ marketing tactic. Test new creative assets, audiences, and placements, then reallocate budget to the content combinations that perform best. Shift spend toward top performers, and pull back from underperformers.  
4. Monitor results and report at the campaign level: With CBO, total campaign performance metrics are your top tracking priority. Look at conversions and average cost per conversion rather than breaking it down by ad set. Use reporting tools, like Dashboards, to spot trends over time and adjust your social media strategy as results shift. 
5. Define the right campaign structure: A CBO campaign is most effective when it contains multiple active ad sets (ideally 3-5 on TikTok and Meta) and each ad set has at least 2-3 unique creative variations. That gives the system enough options to optimize spend dynamically across audiences and ad creatives. If you only run one ad set, you’re effectively back to manual budgeting. 
6.  Use the right bid strategy: Depending on your goal, you might choose the lowest cost (max volume), cost cap (control cost per result), bid cap (advanced spend control), or minimum ROAS (only deliver when the target return is met). Just know: if your bid or cost cap is too tight, the algorithm may struggle to deliver and exit the learning phase.
7.  Remember, audience size matters: A common mistake is creating ad-set audiences that are too narrow. The optimization algorithm needs a sufficiently broad pool to find opportunities. If your audience is smaller or specifically segmented, the algorithm may hit bottlenecks or allocate spend inefficiently.
8. Carefully choose your budget mode: Whether you set a daily budget or a lifetime budget impacts how your spend is paced. If you pick a lifetime budget, remember to monitor pacing and ensure you’re not front-loading or trailing. Try to keep changes moderate: avoid adjusting budgets by more than 30% day-to-day, and give the system at least 3 days, or 50 conversion events, before making significant changes. This will protect against disruptions during the learning phase of your campaign. 
9. Ensure optimization goals align: In a CBO campaign, all ad sets should be optimized toward the same conversion goal, like leads or purchases. When you mix different optimization goals in one campaign, the system’s budget allocation becomes less efficient, and you risk weakening performance. 
10. Know when to avoid CBO: If you have strict spending limits or budget splits by geography or business unit, you might not want to rely on CBO. Another time to avoid CBO is if you’re not running many ad sets and want manual control. In these instances, manual ad-set budgets might serve your strategy better. 

Should I use campaign budget optimization? 

Deciding whether to use campaign budget optimization depends on your specific campaign goals, audience targeting strategy, and budget allocation preferences. We recommend that campaigns with multiple ad sets target diverse audiences or placements.

How do you turn off campaign budget optimization? 

To turn off campaign budget optimization, simply navigate to the campaign settings in the Ads Manager, click to edit the campaign, locate the CBO option in the editor, and toggle it off. Remember, turning off CBO may require manual budget allocation across individual ad sets.

What is trailing in campaign budget optimization?

Trailing occurs when your campaign spends most of its budget later in the flight, rather than pacing evenly throughout the entire campaign. It often occurs when the system is still learning or if daily budgets are too low to gather enough data early on.

What is frontloading in campaign budget optimization?

Frontloading occurs when a campaign allocates a disproportionate amount of its budget at the beginning of the campaign. This can lead to inefficiencies if the algorithm hasn’t had time to stabilize or if early performance data doesn’t represent the full audience potential.