What Is the Difference between Facebook ABO and CBO in 2024?

If you've been running Facebook ads for a while, you've probably come across the terms ABO and CBO. But what exactly do they mean, and how do they impact your ad performance? Let's dive into the world of Facebook budget optimization and uncover the secrets of ABO and CBO.

It's worth noting that as of 2024, Facebook has rebranded CBO as ‘Advantage campaign budget.’ This new name reflects the same functionality, so don't be confused if you see this term in your Ads Manager. Throughout this article, we'll continue to use CBO for consistency, but remember that it's the same as Advantage campaign budget.

Facebook ABO vs. CBO - what's the difference?

Before we get into the nitty-gritty, let's break down what ABO and CBO stand for:

❗ABO: Ad Set Budget Optimization

❗CBO: Campaign Budget Optimization (now called Advantage campaign budget, as we’ve mentioned)

Now, let's look at how these two budget allocation methods differ:

ABO (Ad Set Budget Optimization):

You set individual budgets for each ad set within a campaign. With ABO, you have the power to decide exactly how much money to allocate to each ad set rather than leaving it to Facebook's discretion. That can be particularly useful if you have multiple audiences or creatives you’re testing and want to manage spending precisely.

🛎️ To refine your audience strategy and ensure you're reaching the right people, check out our detailed guide on Facebook ad targeting, where you'll learn about targeting best practices.

CBO (Campaign Budget Optimization):

You set a budget at the campaign level, and Facebook distributes it across ad sets. Instead of micromanaging, you let Facebook's algorithm do the heavy lifting. By setting a total budget for the entire campaign, Facebook automatically shifts funds to the best-performing ad sets, making your budget work harder for you.

Think of ABO as micromanaging your ad sets, while CBO is like delegating budget decisions to Facebook's AI. Here’s an infographic that illustrates how ABO and CBO allocate budgets across ad sets:

🛎️ If you want to estimate your spending costs and understand potential budget needs, the Facebook Ad Cost Calculator is an invaluable tool. It helps you determine how much you need to spend on your ads to achieve your goals.

How to turn on Facebook CBO

Ready to give CBO a whirl? Here's how to set it up:

1. Go to Facebook Ads Manager and create a new campaign.

2. Choose your campaign objective from the options. I’ve selected ‘Awareness’ for the sake of this demonstration, but you can choose any you wish. Click ‘Continue’ once done.

3. At the campaign level, look for the budget optimization section and toggle on ‘Campaign Budget Optimization,’ now called 'Advantage Campaign Budget.’ Then, set your campaign budget and optimization event.

Remember, with CBO, you're setting the budget for the entire campaign, not individual ad sets. That gives Facebook the flexibility to allocate funds where they're performing best.

How to choose between Facebook ABO and CBO

Deciding between ABO and CBO isn't always straightforward. Here are some scenarios where each might be the better choice:

When to use ABO:

• Testing new audiences: If you’re experimenting with different target audiences within the same market or demographic group, ABO is a reliable choice to ensure each audience gets equal exposure. By allocating a fixed budget to each ad set, you prevent the algorithm from favoring one audience over another, allowing for a more accurate comparison to identify the best audience.
• Testing new creatives: ABO is ideal for testing individual ad creatives when you launch just one creative per ad set. This setup ensures that each creative receives a fixed budget allocation, letting you directly compare performance without Facebook’s algorithm prematurely shifting resources to higher-performing creatives. This method ensures equal exposure for each creative, providing reliable insights into what resonates best with your audience.
• Maintaining specific budget allocations across strategies: ABO allows more precise control over budget distribution within campaigns, making it ideal for targeting multiple audience segments or running different strategies in the same campaign. For example, if your business goals call for tailored budget allocations per ad set, ABO lets you assign unique budgets to each so that you can prioritize spending according to your strategic objectives.
• You're an experienced advertiser who prefers granular control. If you like to monitor and adjust every aspect of your campaigns, ABO offers the detailed oversight you need. With ABO, you can fine-tune budget distribution manually and make strategic adjustments based on your insights. Unlike CBO, where turning off underperforming ad sets can disrupt the automated budget allocation, ABO allows you to turn ad sets on or off without affecting the others. This hands-on control is ideal if you prefer to manage optimization yourself rather than relying solely on automation.

When to use CBO:

• You're scaling successful audiences or creatives and want to maximize their performance: If you’ve identified winning strategies and are ready to boost your campaign’s results, CBO can help you efficiently scale. Facebook’s algorithm will dynamically allocate more budget to the highest-performing ad sets, giving you a better shot at scaling up without wasting money on underperforming audiences.
• You're managing multiple ad sets and want to streamline budget management: Juggling many ad sets can be a hassle, especially if each requires frequent adjustments. CBO simplifies this by automatically optimizing spend across ad sets so that you can focus on other campaign elements rather than micromanaging budgets.
• You're new to Facebook advertising and want a more straightforward approach: For beginners, CBO is a great way to get started without feeling overwhelmed. It simplifies the setup process and handles budget optimization, making launching campaigns easier and learning what works without getting bogged down in the technical details. 

🛎️ Pro tip: If you're unsure which method to use, try running parallel campaigns with ABO and CBO to see which performs better for your specific goals. That brings us to our next point...

Measure performance ABO vs. CBO

Comparing the performance of ABO and CBO campaigns can be tricky, especially if you're managing multiple campaigns across different objectives and audiences. That is where Madgicx's ‘Campaign Type & Budget’ widget in the Auction Insights tool comes in handy.

The widget, available through the 360° Meta Audit, offers a side-by-side comparison of your CBO and ABO campaigns. This powerful tool lets you visualize performance differences and analyze key metrics like ROAS, Amount Spent, CPC, and CTR across various budget optimization methods. 

You can identify the best strategy for different campaign objectives and audience types, making data-driven decisions about which budget optimization method to use for future campaigns. Plus, you'll gain valuable insights to fine-tune your strategy for even better results.

Ready to experience the power of advanced campaign insights? Try Madgicx for free for 7 days.

Conclusion: ABO for testing and CBO for scaling

So, what's the verdict on ABO vs. CBO? Like many things in digital marketing, it depends on your specific situation. However, there's a general rule of thumb:

👍🏽 Use ABO for testing new audiences and ad creatives or when you need precise control over ad set budgets

👍🏼 Use CBO for scaling successful audiences and creatives, enabling Facebook’s algorithm to allocate budgets dynamically as your campaign grows

Remember, social media advertising is constantly evolving. What works today might need adjustment tomorrow. That's why you should:

1. Continuously test different strategies

2. Monitor your Facebook ad costs and performance metrics

3. Stay up-to-date with the latest Facebook ad-targeting options

4. Leverage tools like Madgicx to gain deeper insights into your campaigns

By understanding the differences between ABO and CBO and knowing when to use each, you'll be well on your way to creating more effective and efficient Facebook ad campaigns. To enhance your targeting efforts, check out our guide on Facebook custom audiences for more expert tips.