Budget

How to Set the Budget for Your Facebook Ad

The Facebook Ads platform has lots of control options to help you reach your target audience in the most efficient ways.

There are plenty of customizations around target audience, ad copy placements, conversion actions, etc., but one lever that doesn’t get much attention is budget.

There are two types of budget for Facebook – daily and lifetime – each with its own benefits and drawbacks. Choosing the wrong one can be detrimental to your campaign performance.

We’re going to go through each of these in detail below, but first, we need to discuss which levels you want your budgets to be controlled from campaign or ad set.

Campaign Budget Optimization

Historically, budgets on Facebook have been controlled at the ad set level. But in the past couple of years, Facebook launched Campaign Budget Optimization, which lets advertisers set a campaign-level budget which Facebook then disseminates to the ad sets based on performance.

Campaign Budget Optimization (CBO) leverages Facebook’s machine learning to serve ads from whichever ad set is expected to deliver the best results. Here’s a quick overview image Facebook uses to show its potential impact:


In the first example, each ad set has a daily budget of $10 that Facebook spends during the day and each generates a few conversions, resulting in a total of 10 conversions.

In the second example, you set a $30 campaign level budget, the same amount as the combined ad set budgets from the first example, and Facebook will (in theory) serve it to the ad sets with the most potential, resulting in ad set spend levels of $7, $18, and $5 and a total of 15 conversions generated.

While this chart makes this seem like a no-brainer, this isn’t always the case. CBO is sensitive to audience size differences.

If you have three ad sets in a campaign, 2 with audiences of 100,000 users and a third with 32 million users, Facebook will almost certainly spend the majority of your campaign budget on the largest audience size as it has the most potential, regardless of the number of conversions or return the smaller ones are seeing.

There are some allowances for daily minimums and maximums with CBO, meaning you can tell Facebook that one ad set can only spend a certain amount while others have to spend at least this much every day.
These can help offset some of those service issues, but they’re not a silver bullet.

If you do plan on using ad set minimums and maximums, don’t use them to dictate the entirety of your campaign daily budget. This won’t allow Facebook to learn and optimize to the best performing audience and it would be the same as if you were using ad set level budgets.
Instead, dictate only about 50% of your budget across your ad sets and let Facebook do the rest of the work.