A more recent addition to Facebook’s panoply of automation tactics is Budget Optimization. This feature frees advertisers from having to manually set budgets at the ad set level. Instead of setting an arbitrary daily spend for each of your ad sets, this tool optimizes your ad set budgets on an opportunity-by opportunity basis in real-time to meet your campaign goals. Pretty cool, right?

I’ve been testing this tactic for a client over the past month and I’ve uncovered some interesting insights. But first, here’s how to set up the budget optimizer:

You can utilize the budget optimizer in tandem with any campaign objective. In this case, I was interested in conversions. When creating your campaign, simply tick over the “budget optimization” node and set your budget. You can set this as a daily or lifetime budget. Next, select your campaign bid strategy. And voilà, you’re set up.

For my campaigns, I had 3 ad sets operational: Email List Remarketing, Website Visitor Remarketing, & General Demographic. For this client, campaigns run in quick flights so I always use the Lifetime budget feature. One worry I had when setting this test live was how would it balance my remarketing efforts with my prospecting efforts? I didn’t want it to weigh too heavily in any direction.

My first analysis determined how the optimizer fared against my previous method, which was distributing the total budget evenly across all 3 ad sets. As you can see, conversion rates for campaigns using the budget optimizer were slighly lower, but CPLs were 6% lower.

Secondly, I wanted to see how the feature distributed spend across my ad sets when left to its own devices:

The largest chunk of spend went to my prospecting audience even though it had a higher CPL and the lowest conversion rate. However, I still consider this a win because it is expected that remarketing audiences are:

  1. Limited
  2. Will generally result in lower CPLs

The goal CPL for these leads is $10, so we’re still performing under goal using the budget optimization feature. I don’t have a mole on the inside of Facebook’s algorithm, but it would seem that Facebook is maxing out the spend my remarketing traffic can handle, then directing the remainder to prospecting. This is inherently a larger, colder audience so it stands to reason  that it will cost more to get a conversion from these folks.

The major benefits to allowing Facebook’s Algorithm to optimize budget distribution across your ad sets include:

  1. Getting the most results from your campaign, especially when you have mixed audience sizes within your ad sets.
  2. Increasing your spend flexibility between ad sets
  3. This is easier than manually adjusting budgets relative to performance – it is automatically done for you.

One of the major downsides to the budget optimizer is that you cannot run your ads on a schedule. If your strategy is dependent on ad schedules, I would not recommend this. I would also not recommend this feature if you have rigid ad set budget requirements. You can set minimum budgets at the ad set level using the budget optimizer, but it is not recommended because it can interfere with the algorithm.

The final caveat is that Facebook is currently testing the budget optimization feature, so it may not currently be available to all advertisers. But if you have access to the tool in your accounts, I highly recommend testing it.