Hi there,
Thanks for reaching out! I had a look at the situation you described with your Facebook Ads campaign. It’s a classic, and frustrating, problem to have. You've found a winning ad that prospects well, but now it's cannibalising your budget and preventing you from building a proper retargeting system. It's a sign that your campaign is working, but the structure is holding you back from scaling and improving efficiency.
I’m happy to give you some initial thoughts and a bit of guidance on how I’d approach this. The short answer to your question is yes, you absolutely need to launch a separate campaign for retargeting. Trying to fix this by just cranking up the budget on your current CBO will be like pouring water into a leaky bucket – you’ll just spend more money to get more of the same problem. Let's break down why this is happening and build a structure that gives you control and allows you to scale properly.
TLDR;
- Your core problem is campaign structure. You're mixing cold prospecting (ToFu) and warm retargeting (MoFu/BoFu) in the same CBO campaign, and the algorithm will always favour the cheapest, broadest option.
- The solution is to separate your funnel stages into distinct campaigns. Create one campaign for prospecting (broad audiences) and a completely separate campaign for retargeting (custom audiences).
- Prioritise your retargeting audiences based on intent. Start with your highest-intent users (Added to Cart, Initiated Checkout) before moving to lower-intent groups (Video Viewers, Page Visitors).
- You must tailor your ad creative to the funnel stage. Your winning prospecting ad is great for cold audiences, but your retargeting ads need different messaging (UGC, reviews, urgency, offer-focused).
- This letter includes a detailed campaign structure flowchart to visualise the setup and an interactive LTV calculator to help you understand how much you can truly afford to spend to acquire a customer.
We'll need to look at why your CBO is starving your retargeting ads...
First, let's get one thing straight. The Facebook algorithm, especially within a Campaign Budget Optimization (CBO) setup, is ruthlessly efficient at one thing: finding the cheapest possible outcomes based on the objective you've set. In your case, that's likely 'Purchases'. You've given it a big pool of people in your broad adsets and a mix of creatives. The algorithm has tested them and found that one particular creative is exceptionally good at converting cold traffic at a profitable CPA. So, it does exactly what you've told it to do – it pours almost the entire €100 daily budget into that single creative/audience combination because it's the path of least resistance to a conversion.
Your retargeting ads, even with their higher frequency, are being ignored for a simple reason: they are inherently more expensive to serve on a per-impression basis. Your custom audiences (ATC, VV, etc.) are tiny compared to the broad audience. It costs Meta more to find and serve an ad to one of those few thousand specific people than it does to serve it to one of the millions in your broad pool. Even if those retargeting audiences have a higher conversion rate, the algorithm, at your current budget, sees the immediate low CPA of the broad ad and decides it's the 'best' use of funds.
This is a common misconception about CBO. It’s not a magic box where you can dump all your audiences and creatives and expect a perfectly balanced outcome. It's a tool for efficiently scaling your top-performing combinations. When you mix different funnel stages—cold prospecting (Top of Funnel - ToFu) and warm retargeting (Middle/Bottom of Funnel - MoFu/BoFu)—you create a conflict. You're asking the algorithm to choose between a cheap, plentiful resource (cold traffic) and an expensive, scarce resource (warm traffic). It will almost always choose the former.
I’ve seen this countless times in accounts I've audited. People hear "just use CBO" and think it absolves them of the need for strategic structure. The reality is the opposite. To use CBO effectively, you need an even more disciplined structure. You are essentially paying Facebook to find you the cheapest conversions, and if you're not careful, it finds users who are cheap but not necessarily your best customers. This is why just increasing the budget won't work. You might see a little more spend trickle to the retargeting ads, but the fundamental imbalance remains. The prospecting ad will still get the lion's share, maybe 90% instead of 95%. You need to take back control.
I'd say you need to separate your funnel stages...
The only robust, scalable solution is to restructure your account to reflect the customer journey. This means creating separate, dedicated campaigns for each major stage of your funnel. This gives you ultimate control over budget allocation and allows you to speak to each audience with the right message.
Here’s the structure I would implement immediately:
Campaign 1: Prospecting (ToFu - Top of Funnel)
- Objective: Conversions (Purchases)
- Budgeting: CBO is perfectly fine here. You can keep your €100/day budget (or more) dedicated to this campaign.
- Audiences: This is where your broad adsets live. You can continue with your control vs. test setup. You can also test interest-based audiences or Lookalike audiences once you have enough data.
- Exclusions: This is absolutely critical. You must exclude all your custom audiences from this campaign. Exclude people who have visited your website in the last 30-60 days, engaged with your page, and most importantly, anyone who has purchased in the last 180 days. This ensures your prospecting budget is only being spent on finding genuinely new customers.
- Creatives: Use your proven "clear winner" creative here, along with other similar ads designed to capture the attention of a cold audience who has never heard of you before.
Campaign 2: Retargeting (MoFu/BoFu - Middle/Bottom of Funnel)
- Objective: Conversions (Purchases)
- Budgeting: I'd actually recommend starting with Ad Set Budget Optimization (ABO) here. Your retargeting audiences will be of varying sizes and "temperatures." ABO gives you the control to assign specific budgets to specific audiences. For example, your 'Added to Cart (7 days)' audience is much more valuable than your '95% Video Viewers (30 days)' audience, and you'll want to ensure it gets a dedicated slice of the budget. Once you see which retargeting audiences perform best, you could consolidate them into a new retargeting CBO, but start with ABO for control. Start with a smaller budget, maybe €20-€30/day, and scale as you see results.
- Audiences: This campaign will contain multiple ad sets, each targeting a specific custom audience. We'll get into the prioritisation of these in the next section.
- Exclusions: Again, exclusions are vital. In every ad set, you must exclude people who have purchased recently (e.g., last 180 days). You also need to create a funnel within your retargeting. For example, in your 'Page View' ad set, you should exclude the 'Add to Cart' and 'Initiated Checkout' audiences. This ensures people see the most relevant ad for how far down the funnel they've gone.
- Creatives: This is where your UGC, reviews, and urgency-focused static images belong. These ads are for people who already know who you are. You don't need to introduce the brand; you need to overcome their objections and push them to complete the purchase.
By implementing this two-campaign structure, you solve the core problem. You are no longer asking CBO to make an impossible choice. You are telling Facebook exactly how much you want to spend on finding new customers and exactly how much you want to spend on bringing back warm prospects. This clarity is the foundation of every successful, scalable ad account I've ever worked on, including eCommerce campaigns where we've driven over 600% ROAS for clients in niches from apparel to cleaning products.
You probably should rethink your audience prioritisation...
Now that we've decided to create a dedicated retargeting campaign, the next question is: who do we target, and in what order? Just lumping all your custom audiences together is a mistake. You need to prioritise them based on user intent. Someone who abandoned their shopping cart yesterday is a much hotter prospect than someone who watched a video two weeks ago.
I structure this by thinking in terms of ToFu, MoFu, and BoFu audiences. Your prospecting campaign handles ToFu. Your retargeting campaign will handle MoFu and BoFu. Here's how I would prioritise the audiences you mentioned inside your new ABO retargeting campaign:
BoFu (Bottom of Funnel - Highest Intent) Ad Sets:
These are your hottest leads. They were on the verge of buying. Your goal here is to close the deal.
- ATC / IC (Last 7-14 Days): Target people who have Added to Cart (ATC) or Initiated Checkout (IC) but did not purchase. This is your most valuable audience. Show them ads with strong social proof (reviews), handle common objections, and maybe introduce a time-sensitive offer or reminder about what they left behind.
- VC (Last 7-14 Days): Target people who Viewed Content (VC) or specific product pages but didn't add to cart. They showed interest in a specific item. Dynamic Product Ads (DPA) work wonders here, showing them the exact products they viewed.
MoFu (Middle of Funnel - Medium Intent) Ad Sets:
These people are aware of you and have shown some interest but are less committed than the BoFu group. Your goal is to build more trust and desire.
- PV (Last 30 Days): Target all other Page Viewers/Website Visitors. This is a broader audience. Show them ads that reinforce your brand's unique value proposition, showcase best-selling products, or highlight positive press/reviews.
- 95% & 75% VV (Last 30 Days): Target people who have watched most of your videos. They are clearly engaged with your content. Show them ads that move them from passive viewer to active shopper, perhaps with a compelling story or a direct call-to-action to explore a product featured in the video.
If your budget is small to start, you can combine some of these. For example, you could have one BoFu ad set combining ATC, IC, and VC for the last 14 days. And one MoFu ad set combining all website visitors and high-percentage video viewers for the last 30 days. As your budget and audience sizes grow, you can separate them out for more granular control and messaging.
This tiered structure is visualised in the flowchart below. It shows how a user flows from a complete stranger into a customer through separate, targeted campaigns.
Ad Set 1: Broad
- Target: Broad Audience
- Creative: Your "Clear Winner" Ad
- Excludes: All Custom Audiences, Purchasers
Ad Set 2: Interests
- Target: Interest Group A
- Creative: Test Ad 1
- Excludes: All Custom Audiences, Purchasers
Ad Set 3: Lookalikes
- Target: 1% LAL of Purchasers
- Creative: Test Ad 2
- Excludes: All Custom Audiences, Purchasers
Ad Set 1: BoFu
- Budget: €15/day
- Target: ATC/IC (14 days)
- Creative: Urgency, DPA, Offer
- Excludes: Purchasers
Ad Set 2: MoFu
- Budget: €10/day
- Target: Page View (30 days)
- Creative: Social Proof, UGC
- Excludes: BoFu Audiences, Purchasers
Ad Set 3: MoFu
- Budget: €5/day
- Target: 75% VV (30 days)
- Creative: Reinforce Value Prop
- Excludes: BoFu Audiences, Purchasers
You'll need to tailor your creative to the audience...
A new structure is useless without the right messaging. The reason your "aggressive static images" didn't work in your old setup was partly because they weren't getting spend, but it's also possible they weren't the right message for the cold audience that was seeing them. Now, with your dedicated retargeting campaign, those ads have a proper home and a much better chance to succeed.
Think of it like dating. Your prospecting ad is your opening line at a party—it needs to be interesting, grab attention, and pique curiosity among strangers. Your retargeting ad is the conversation you have after you've already been introduced—it can be more direct, reference your past interaction, and ask them out. You wouldn't use the same line for both situations.
Here’s a simple breakdown of how to approach creative for each stage:
| Funnel Stage | Audience Mindset | Creative Goal | Example Ad Types |
|---|---|---|---|
| ToFu (Prospecting) | "I have a problem, but I don't know who you are." | Stop the scroll, educate, build intrigue. |
|
| MoFu (Mid-Funnel) | "I recognise you. Why should I trust you over others?" | Build trust, showcase social proof, reinforce value. |
|
| BoFu (Bottom-Funnel) | "I'm close to buying. I just need a final push." | Overcome final objections, create urgency, close the sale. |
|
So, those UGC, review, and urgency ads you've created are not failures; they were just homeless. In your new retargeting campaign, they will be your star players. For your BoFu ad set targeting cart abandoners, an ad that says something like, "Still thinking it over? Here's what 500+ five-star reviewers had to say..." can be incredibly powerful. Or, "Did you forget something? Your items are waiting. Complete your order now for free shipping." This kind of direct, context-aware messaging is impossible to achieve effectively in a mixed-funnel CBO.
You should understand your numbers to scale profitably...
Finally, as you separate your campaigns, your metrics will change. Don't be alarmed if the CPA in your retargeting campaign is higher than the CPA in your prospecting campaign. This is not only normal, it's expected. You are paying a premium to reach a smaller, more qualified audience.
The real question isn't "what is my CPA?" but "how much can I afford to pay to acquire a customer?" The answer to that lies in your Customer Lifetime Value (LTV). Once you know what a customer is worth to you over their entire relationship with your business, you can make much smarter decisions about your ad spend. Chasing a rock-bottom CPA can sometimes mean you're only acquiring discount-shoppers with a low LTV, while a higher CPA might bring in a loyal customer who buys from you again and again.
A healthy business model often aims for a 3:1 ratio of LTV to Customer Acquisition Cost (CAC). So, if your LTV is £300, you can comfortably spend up to £100 to acquire that customer. This insight frees you from the tyranny of judging every ad set by its immediate CPA. A retargeting ad set with a €40 CPA might seem expensive compared to your prospecting ad set at €25, but if those €40 customers have a higher LTV, it's a fantastic investment.
Calculating your LTV can seem complex, but you can start with a basic formula. I've included a simple, interactive calculator below to help you get a ballpark figure. Play around with the numbers to see how changes in revenue, margin, and churn can dramatically impact the value of each customer.
Estimated Customer Lifetime Value (LTV)
I know this is a lot to take in, but restructuring is the most powerful lever you can pull right now to not only fix your immediate problem but also set yourself up for long-term, profitable growth. I've detailed my main recommendations for you in a summary table below to serve as a checklist.
This is the main advice I have for you:
| Action Item | Campaign 1: Prospecting (ToFu) | Campaign 2: Retargeting (MoFu/BoFu) |
|---|---|---|
| Objective | Conversions (Purchases) | Conversions (Purchases) |
| Budgeting Strategy | CBO (Campaign Budget Optimization) | ABO (Ad Set Budget Optimization) to start |
| Primary Targeting | Broad audiences, Interests, Lookalikes (1-5%) | Custom Audiences (ATC, IC, VC, PV, VV) |
| Critical Exclusions | Exclude ALL Custom Audiences (Website Visitors, Engagers) and recent Purchasers. | Exclude recent Purchasers in all ad sets. Use funnel exclusions (e.g., exclude ATC from PV ad set). |
| Creative Focus | Problem/Solution focused, educational, attention-grabbing for a cold audience. | Social proof (UGC, Reviews), urgency, offer-focused, Dynamic Product Ads. |
| Key Metric to Watch | Cost Per Acquisition (CPA), Return on Ad Spend (ROAS) | ROAS, Frequency. (Expect a higher CPA than prospecting). |
Implementing a structure like this takes discipline, but it moves you from being reactive to proactive. You’re no longer at the mercy of the algorithm’s whims; you’re guiding it with a clear strategy. This is how you stop just being profitable "on the higher side" and start building a truly efficient, scalable advertising machine.
Navigating this can be tricky, and small mistakes in setup (like incorrect exclusions) can be costly. If you'd like to go through your account setup together and map out a specific action plan, we offer a free, no-obligation initial consultation. We could dive into your exact audiences and creatives and make sure the transition to this new structure is seamless.
Hope this helps!
Regards,
Team @ Lukas Holschuh