Campaign Budget Optimization for Print on Demand
Campaign budget optimisation (CBO) has been available as a way of constructing your Facebook advertising campaigns for some time now. Facebook was even considering making it mandatory. That means it would have been the only way that you could have launched a Facebook ads campaign. Facebook marketers have wondered whether campaign budget optimisation is right for them and whether running CBO’s for testing campaigns can work.
It’s important to point out that every marketer will have different experiences with their campaigns, whether they are CBO campaigns or not. When selling print on demand products, the most crucial factor is the design, not the advert and not the campaign’s structure within Facebook. Nothing in this article will make a design that nobody wants to buy start selling.
This post will cover several different structures for running adverts on Facebook. However, every advertiser will have different results, and nothing is guaranteed. The only way to succeed is to test, test and test some more. In the end, you have to find a formula and campaign structure that works for you. Some advertisers will set much higher initial budgets than others, and each niche will have dramatically different results.
Table of contents
Campaign Budget Optimisation versus Ad Set Budget Optimisation
What is Campaign Budget Optimisation?
What’s the advantage of learning about CBO?
Campaign Budget Optimisation versus Ad Set Budget Optimization
Campaign budget optimisation means that you set a budget for the entire campaign rather than on the ad set level.
Let’s first review how marketers constructed campaigns on Facebook before campaign budget optimisation. The original way of optimising was on an ad set level known as ad set budget optimisation or ABO. An ABO structure allows an advertiser to set a budget for each ad set within a campaign.
A campaign on Facebook has three parts. The campaign itself. The ad set or ad sets within that campaign, and then the ads associated with each ad set a campaign can have multiple ads sets within it, and each ad set can have multiple ads related to them.
One of the advantages of ad set budget optimisation is sellers can set budgets for each ad set. Setting a budget for each separate ad set gives you a very high level of control over your daily ad spend. It is a fast and efficient way to manage your ad sets.
Tip: Although you can increase the budget of an ad set at any time. Some advertisers have found it better to duplicate an ad set and increase the new ad set budget. Leave the original one running rather than changing its budget. As a general rule, we do not recommend changing anything on a profitable ad set.
POD sellers have found that optimising add sets for purchases gives the best result. Some sellers have found success by optimising for add to cart. Both purchases and add to cart are worth testing.
Create four or five ad sets, each with a daily budget of five dollars. Review each ad set’s performance after 24 hours and turn off all the ad sets that are not performing well. That does not mean turning off all the ad sets have not made a sale. It does mean turning off ad sets with low engagement, which is a good sign that the ads may not ever turn profitable.
A good metric to look at is the cost per link click. You should turn off any ad set with a cost per link click of over two dollars unless that ad set has made a sale.
Want more information on setting up and testing ad set budget adverts on Facebook? Then join our free Facebook ads course.
What is Campaign Budget Optimisation?
With a CBO campaign, Facebook lets you set a budget for the entire campaign. That means that you set the budget at the campaign level, and the budget is distributed to each ad set depending on how well Facebook thinks that ad set will perform. Meaning that Facebook spends almost your entire daily budget on one to or just a few ad sets and does not spend anything on others or a tiny amount on some of the other ad sets within the CBO campaign.
The Facebook algorithm allocates the budget to the ad sets differently when you are using campaign budget optimisation.
The following statement is directly from Facebook. Facebook explains how campaign budget optimisation works:
“We optimise your campaign budget in real-time on an opportunity-by-opportunity basis. Our goal is to get you the most results possible and for the cost of those results to align with your bid strategy.”
A campaign structure that is using campaign budget optimisation will look like this:
Although the Facebook algorithm determines how much to spend on each ad set, you can set the daily minimum and maximum spends within the campaign for each ad set. Setting daily minimums and maximums can help in testing as you can force Facebook to spend a minimum amount on each ad set. If you wish, you can also cap the spend of an ad set; this could help you have an ad set targeting a smaller audience than the rest.
Tip: Until you get more comfortable with running CBO campaigns. It is better to let the Facebook algorithm determine the spend that it allocates to each ad set.
Tip: Wherever possible, it is better to have similar-sized audiences within each ad set when you are using campaign budget optimisation; doing so seems to lead to more balanced ad spends across the ad sets and better overall results.
What’s the advantage of learning about CBO?
Many advertisers have tested campaign budget optimisation and found that their initial results weren’t great. Still, like many things in marketing, successful marketers keep experimenting and trying different things until they find something that works for them.
Once you find a campaign budget optimisation strategy that works for you, it can be easier to scale the campaigns, and you may find that you can spend far more on a campaign than you were by using asset budget optimisation.
Campaign Budget Optimisation Structure
With CBO campaigns, Facebook is allocating budget to give the best results. So it is essential to provide Facebook with as many options as it needs to find a winning combination. It is crucial to find the sweet spot. Don’t give Facebook too many options or too few.
POD sellers have found that one campaign with 10 or 12 ad sets with three ads per ad set can work well. Use the same three ads on each one of the ad sets. Use different targeting for each of the ad sets. Try to keep the audience size similar in each ad set.
Bid Strategy for Facebook Campaigns
To maximise the performance of all Facebook marketing. You need to understand the different types of bid strategy that Facebook offers. Many marketers use the default settings, and that can work great. Testing is always essential, and it is better to test and learn and find what works for you.
The four types of campaign bid strategy are:
- Lowest Cost (this is the default)
- Cost Cap
- Bid Cap
- Target Cost
The lowest Cost is the default strategy setting. Selecting this will mean that Facebook will control the bidding price for you. Facebook will try and find the most results for the budget you set. Remember, you have to choose the optimisation event for Facebook in each ad set. Whichever event you choose to optimise for will be the event that Facebook sets the bid strategy to target. Suppose you have selected the lowest cost. Then there is nothing more for you to do as Facebook controls everything for you.
If you select one of the other three, Cost Cap, Bid Cap, or Target Cost, you can control the costs yourself. So you can define how much you are willing to pay for the conversion event you have selected in ad sets.
You may have heard of manual bidding before. These three options give you the ability to enter a manual bid. But, they are different to the original manual bidding options that Facebook offered.
If you select Lowest Cost, Facebook will try to spend all the budget for the ad set or campaign to get the most results. Facebook will do this no matter what the cost per conversion you are getting is.
The other three strategies will let you control the cost. Each one is different, but how Facebook allocates the budget is similar. Facebook will spend your budget and attempt to target the results you want. Trying to target these results can result in Facebook not spending any money on an ad set in a COB campaign. Facebook will spend no money because it cannot find enough people in the audience to target at the set price.
For example, suppose you set a Bid Cap for a purchase conversion at one dollar. In that case, Facebook may not serve the ad to anybody. Facebook will not serve the ad is because it believes that nobody within the audience would purchase at that price. If this happens, you need to define a higher Bid Cap.
Each of the three cost control strategies has slight differences. You can see those differences in this comparison image below from Facebook.
If you select Cost Cap, then Facebook will attempt to get you the best results at a cost below the cost you defined.
Suppose you were to select Target Cost, which is a lot like Cost Cap. Facebook will try to get you conversions at the target cost that you defined.
After receiving feedback from our marketers running print on demand products, we have found that most prefer to use either Cost Cap or Lowest Cost for their campaigns. But, they do use these two optimisations in different scenarios.
The testing phase using Campaign Budget Optimisation
Note: Before moving to use campaign budget optimisation. You may wish to test first with ad set budget optimisation as it is a cheaper way of trying a new product. To test with ABO, make a new campaign with four or five ad sets in it.
Before CBO was available, the only way to set a budget was by using individual ad sets. Setting a budget for an ad set means that Facebook will spend all the allocated budget.
Most marketers usually use the same daily budget for all ad sets within a campaign. All the ad sets within the campaign would spend their budgets, so it was easy to set daily budgets. Setting a budget for each ad set also made it easy to check and manage each ad set. It is easier because each ad set was spending the same amount of money as the others. It was easy to see which ad sets were performing well and which ad sets were not performing.
But, in campaign budget optimisation, assign the daily budget at the campaign level. So no longer can a daily budget be set at the ad set level.
Tip: You can test print on demand designs with a post page engagement ad for as little as four dollars a day. When an engagement ad has spent four dollars, we want to see a low cost per engagement. We also want to see a good number of comments and shares. Comments and shares are a great way to see if the design is resonating with the niche audience.
One way of testing a new design within a CBO campaign is to create 10 or 12 ad sets. Each ad set should have a different interest inside of the single campaign. Every niche and design will be different, and you may find something that works better for you. One successful setup is to use ten ad sets within one campaign. If you do this, use a daily budget of $150 a day. That is ten ad sets times $15 using the max cost per conversion and setting that to $15.
We are setting a total budget of $150 per day with a maximum cost per conversion of $15 per day. Each ad set has $15 available for it to spend within that day. Of course, Facebook will determine how much each ad set spends over the day. Given this, one ad set may spend much more than another. You may even see one ad set spending almost the entire campaign budget. It is also common to see other ad sets spending nothing.
The Max Cost per conversion is the ad cost that will give me a breakeven return on ad spend.
For example, if I sell a standard men’s T-shirt in Germany for $24.99 (€21.16). The profit that Moteefe will give me will be $15 (€12.73).
My cost per conversion must be less than the $15 (€12.73) dollars, so there is still a profit margin.
Tip: To calculate the budget, do this. Multiply the number of ads set by the maximum cost per conversion you are willing to pay.
Daily budget equals the number of ad sets times Max cost per conversion.
So in the example above, the daily budget equals ten times $15, which equals $150 per day.
It is better to start with the lowest cost bid strategy when testing before running the campaign. We do not know whether Facebook will generate sales for the Max cost per conversion that we need. If we were to use cost as the bid strategy from the start and the cost you defined was too low, you might not get any traffic.
So, when you’re testing, it’s best to let Facebook decide if the costs happen to be too high. After a while, it’s likely because the product or the ad or the targeting is not strong enough to be profitable. If that is the case, you will need to figure out where the problem is.—is it the product, the ad or the target audience? Adjust them over time.
90% of the time, it will be the design that you are trying to sell. Many advertisers and marketers blame everything other than the product. If you are not getting the results that you want, then find a new design to test.
Scaling with CBO
With ad set budget optimisation, scaling happens in two ways: increasing the daily budget of an ad set. If you are doing this, try increasing it by no more than 20% every 48 hours. Or duplicate the ad set and set a new budget. Leave the original ad set running.
There is no way to increase the daily budget or duplicate a winning ad set for CBOs. That is because changes to the budget are only made at the campaign level.
Scaling can be easier with CBO as marketers can duplicate the entire campaign. After doing this, the budget increased for the new campaign.
When duplicating campaigns, only run the winning ad sets in the new campaign. Do not delete the duplicate ad sets that were not performing in the original campaign. Pause them before you start running the new campaign.
You can keep the same daily budget as you had before. Or you can increase it and have a newer, higher budget for the new campaign.
For example, if you have five ad sets and your maximum cost per conversion is 15, and you wish to scale by a factor of 10. Then your new daily budget will be five times $15 times a scaling factor of 10, which will give you a new budget of $750 per day.
You can use any scaling factor you like; anything from two times to 10 times can be successful. Never spend more money on advertising than you are comfortable with. Spending money that you are not comfortable with will lead to poor decisions. Poor decisions lead to losses.
Once you have identified only those ad sets that are winning, then you can increase your budget by a factor of 10 only if you are comfortable with the extra ad to spend. It is critical that you only do this for the best-performing ad sets.
Daily Budget = Number of Ad Sets x Max Cost per Conversion x The Scaling Number.
Daily Budget = 5 x 15 x 10 = $750
Tip: If you are scaling by a factor of five or 10. You must make sure that the audience that you have within each ad set is large. Otherwise, you will soon exhaust those targets.
If you are less sure about the original ad sets’ performance or want to be more conservative with your ad spend. Then you can increase by a lower factor-like 2X, 3X or 5X.
Using the cost cap bid strategy to control costs
Suppose you want to scale by a factor more significant than 10. You can use Cost Cap as your bidding strategy. You can also do this if you are scaling by a factor of 10 but wish to be more conservative with your ad spend.
Cost Cap lets you set the target cap cost you wish Facebook to attempt to get conversions at. Remember this will be the cost per conversion of the event you are optimising for each ad set.
If the cost is too low, Facebook may not get any results for your budget and won’t spend what you have allocated. You may need to adjust the cost to let Facebook begin allocating your budget.
CBOs that are spending nothing or low amount of spend
After the testing phase, you may have found some ad sets that have performed well. Others will have performed less well. There will also be other ad sets that have spent either nothing at all or a minimal amount.
Suppose you find that some ad sets have not spent any money or have spent a tiny amount of money; this will be because some ad sets perform well. When this happens, Facebook will divide most of the budget to those ad sets. Given this, some ad sets may not get anything spent on them.
If this happens to an ad set, then create a new campaign and let them run again. You still want to have ten ad sets within the campaign, so it is best to find new targets for the other ad sets you are adding.
When you create a new campaign, make sure that you go back to the testing phase with testing budgets.
The tremendous power of lookalike audiences wtih CBO
Lookalike audiences within Facebook are awesome. They will update when new events trigger. With new people added to the custom audiences, lookalike audiences can last for much longer than interest targets. Lookalike audiences update with new people added.
Breaking a lookalike audience down by age and gender is one way to use lookalikes with CBOs.
Ad Set #1 – Lookalike Audience 1% – Women – 25-34
Ad Set #2 – Lookalike Audience 1% – Women – 35-44
Ad Set #3 – Lookalike Audience 1% – Women – 45-54
Ad Set #4 – Lookalike Audience 1% – Women – 55-64
Ad Set #5 – Lookalike Audience 1% – Women – 65+
Ad Set #6 – Lookalike Audience 1% – Men – 25-34
Ad Set #7 – Lookalike Audience 1% – Men – 35-44
Ad Set #8 – Lookalike Audience 1% – Men – 45-54
Ad Set #9 – Lookalike Audience 1% – Men – 55-64
Ad Set #10 – Lookalike Audience 1% – Men – 65+
Suppose you are using a larger lookalike audience or running adverts in a large country like the US. You can also segment your lookalike audiences with an interest. It is best to use very broad interests when doing this, as you still want to have a large audience to target. The largest lookalike audience you can make in the United States is 22 million people. A lookalike audience of 10% of the most like your original audience.
If a 1% lookalike audience performs well, then you can test audiences of 1 to 2%, 2 to 3% for 4 to 5%, and so on. You can also use audiences of 5% and 10%.
Facebook needs to optimise campaigns
Facebook’s algorithm is very advanced. The algorithm will do everything to try to produce the lowest possible cost. But that does not mean that you cannot help Facebook by feeding in audiences that it is more likely to optimise.
Suppose the audience you have selected is too large or too broad or not interested in the product. If this happens, then it is likely that your campaign will not perform.
You can help Facebook by looking at the data from your niche over time and working out who the buyers are. If, for example, if all your buyers are women, then it would make sense to exclude men; this can be the same for age ranges. If your buyers are 35 to 54, it makes sense to exclude 18 to 24-year-olds.
The same is true for placements. If all your sales are from running ads on the Facebook news feed on mobile, then exclude desktop; this works across platforms. So if you’re getting all your sales on Instagram, it does not make sense to run more adverts on Facebook. Each niche is different, and each product within each niche is different. Testing and learning the data is critical.
A simple rule is don’t start too big. Try to test new products with audiences that you know are likely to buy products from you.