Solved: Should I Use Advantage Campaign Budget (CBO)?

Hi there,

Thanks for reaching out! Happy to give you some initial thoughts on your campaign setup. You've asked a really common question about Advantage Campaign Budget, but to be honest, getting your setup 'right' for the long term goes a bit deeper than just flicking a switch in the campaign settings. It's really about the entire structure and strategy behind what you're doing.

What you're running into is a classic crossroads: do you give Meta the keys and hope for the best, or do you take more control to make sure your budget is being spent intelligently? Let's break down why the second option is almost always the right answer, especially when you're starting out.

We'll need to look at that 'Advantage Campaign Budget' question...

Alright, so your main question is about Advantage Campaign Budget, or CBO as it used to be called. On the surface, it sounds great. You set one central campaign budget, and Meta's algorithm promises to automatically shift the money to whichever ad set is performing the best. Easy, right?

The problem is, Meta's definition of 'best' can be very misleading, especially in the early days of a campaign with a modest budget. The algorithm is designed to find the cheapest, fastest results to prove it's working. For a leads campaign, this often means it'll find people who are quick to click or fill out a form, but who might not be high-quality leads that actually turn into customers. It optimises for the action, not the business result.

Imagine you have your two ad sets:

• -> Ad Set A (Audience A, Product A): This might be a slightly more niche, higher-intent audience. They might cost a bit more to reach, and take a little longer to convert, but when they do, they're fantastic customers.
• -> Ad Set B (Audience B, Product B): This could be a much broader audience. It's cheaper to get clicks here, and you might get some quick, low-cost leads from people who are just curious.

If you turn on CBO with your $60/day budget, the algorithm might see a few cheap leads come from Ad Set B in the first 24 hours. It'll think "Aha! This is the winner!" and immediately start funnelling $50 of your daily budget there, leaving Ad Set A with just $10. Ad Set A never gets enough budget or time to find those higher-quality leads, so it looks like a failure. You then turn it off, convinced it doesn't work, when in reality it was never given a proper chance. You've let the algorithm make a strategic decision for you based on incomplete and often misleading early data.

This is a trap I see so many accounts fall into. CBO is a tool for scaling, not for testing. You use it when you already have a proven winning audience and ad creative, and you want to pour fuel on the fire. For testing two different audiences and products like you are, you absolutely must maintain control. That means using Ad Set Budget Optimisation (ABO), where you set the budget at the ad set level ($30/day for each). This guarantees that both audiences get a fair test with enough spend to show you their true potential. Only then can you make an informed decision about which one is actually better for your business.

Here’s a simple way to visualise the difference in how the budget gets allocated in testing:

I'd say you need to rethink the 'run forever' campaign...

The second part of your plan, running a single campaign 'forever', is another common pitfall. While the intention to have a consistent, long-term advertising presence is good, lumping everything into one campaign is strategically flawed. It's like having a single toolbox where all your tools—hammers, screwdrivers, wrenches—are thrown in together. It's messy, inefficient, and you can never find the right tool for the job.

Here’s why a single 'forever' campaign will hold you back:

1. Ad Fatigue: The same audience seeing the same ads over and over again will eventually tune them out. Performance will inevitably decline. You need a system for refreshing creative and testing new angles, which is messy in a single, monolithic campaign.
2. No Audience Segmentation: Your campaign is treating every single person the same. Someone who has never heard of you is completely different from someone who has visited your website five times and watched your product videos. They need to see different messages. A 'forever' campaign can't do this effectively.
3. Messy Reporting: How do you know what's really working? Is it your cold traffic ads that are bringing in new leads, or is it your retargeting efforts that are closing them? When it's all in one campaign, the data gets muddled and it's almost impossible to get a clear picture of your customer's journey.

The solution is to structure your account based on a marketing funnel. This isn't some complex marketing jargon; it's a simple, logical way of thinking about your customers. You group them based on how familiar they are with your business. For Meta ads, we typically break this into three stages:

• ToFu (Top of Funnel): These are your 'prospecting' or 'cold' audiences. They've never heard of you before. The goal here is to introduce your brand and the problem you solve. Your two current ad sets would fall into this category.
• MoFu (Middle of Funnel): These are 'warm' audiences. They've shown some interest. They've visited your website, watched one of your videos, or engaged with your Instagram page. They know who you are, but they haven't taken that final step. The goal here is to build trust and show them more about your solution.
• BoFu (Bottom of Funnel): These are your 'hot' audiences. They are very close to converting. They might have added a product to their cart, visited your pricing page, or started filling out your lead form but got distracted. The goal here is to give them that final nudge to convert, maybe with a testimonial or a reminder of your key benefit.

By creating separate campaigns for each stage of this funnel, you gain immense control and clarity. You can tailor your messaging, offers, and budgets specifically to where that person is in their journey. This is how you move from just 'getting leads' to building a predictable, scalable system for acquiring customers.

You probably should structure your account for scale...

So, what does this look like in practice? It's simpler than it sounds. Instead of one campaign, you'd start with two, and maybe add a third later on.

Campaign 1: TOFU - Prospecting (Testing)

• Budgeting: ABO (Ad Set Budget Optimisation). You control the spend.
• Ad Set 1: Your Audience A for Product A - $15/day
• Ad Set 2: Your Audience B for Product B - $15/day
• Ad Set 3: New Test Audience C (e.g., a different set of interests) - $15/day
• Ad Set 4: New Test Audience D (e.g., a lookalike of your best customers, once you have the data) - $15/day

The goal of this campaign is to constantly test new audiences and creatives to find what works. You run them with controlled ABO budgets, analyse the results after a few days, turn off the losers, and scale up the winners (either by increasing their ad set budget or moving them to a separate scaling campaign with CBO).

Campaign 2: MOFU/BOFU - Retargeting

• Budgeting: ABO. You only need a small budget here, maybe $10-$15/day to start.
• Ad Set 1 (MoFu): Target people who visited your website in the last 30 days but didn't become a lead. Show them an ad with a customer testimonial or a case study.
• Ad Set 2 (BoFu): Target people who visited your specific lead form page in the last 7 days but didn't submit. The ad could be a simple reminder, "Still thinking it over? Let's talk about how we can help with [problem]."
• Ad Set 3 (MoFu): Target people who have watched 50% of one of your video ads in the last 90 days. They're clearly interested, so show them another ad that goes into more detail.

This retargeting campaign is your money-maker. It's often the most profitable part of any ad account because you're talking to people who are already warm. By not having this, you're essentially letting interested prospects walk away without trying to bring them back. I remember one B2B software client we worked with; we generated 4,622 registrations for them at just $2.38 each, and a massive part of that success was a robust retargeting structure that converted visitors who were on the fence.

When you're thinking about which audiences to build, especialy lookalikes and retargeting, there's a clear priority. You always want to build audiences based on people who are as close to your desired outcome as possible. Here's how I'd usually prioretise them:

You'll need to think about your customer, not just your audiences...

Having the right technical setup is one half of the battle. The other half, and tbh the more important one, is the message itself. You've mentioned you're targeting "different audiences with different products." This is a good start, but we need to go deeper.

The biggest mistake I see businesses make is defining their audience with vague demographic data. "We target marketing managers aged 30-50 in the UK." That tells you almost nothing useful. It leads to generic, boring ads that get ignored because they don't speak to anyone's real problems.

You need to stop thinking about demographics and start thinking about nightmares. What is the specific, urgent, expensive problem that keeps your ideal customer awake at night? Your Ideal Customer Profile (ICP) isn't a person; it's a problem state.

Let's say one of your products is a project management tool. Don't target "small business owners." Instead, target the nightmare: "The small agency owner who's terrified of losing their biggest client because projects are constantly late and over budget, and they have zero visibility on who's doing what."

Once you define that nightmare, everything else becomes clear. Your ad copy isn't about features ("Our tool has Gantt charts!"); it's about solving the pain. You use a framework like Problem-Agitate-Solve:

See the difference? That ad speaks directly to the agency owner's fear and frustration. It's not about the software; it's about the feeling of relief the software provides. This is what stops the scroll and gets a quality lead, not just a curious clicker. When you nail this messaging, you'll find your lead quality goes through the roof, because you're pre-qualifying people based on the exact problem you solve.

And you must understand the numbers behind the leads...

Finally, let's talk about your budget and what makes a lead 'good'. You're planning to spend $3,000 a month. That's a serious investment. How will you know if it's working? Getting a low Cost Per Lead (CPL) is meaningless if none of those leads ever become paying customers.

The real question isn't "How low can my CPL go?" but "How high a CPL can I afford to acquire a great customer?" The answer to that lies in calculating your Customer Lifetime Value (LTV). This single metric is the most important number in your entire business. It tells you what a customer is actually worth to you over time.

The calculation is pretty straightforward. You just need three numbers:

1. Average Revenue Per Account (ARPA): How much does a typical customer pay you each month?
2. Gross Margin %: What's your profit margin on that revenue? (If you don't know, use a conservative estimate like 70-80%).
3. Monthly Churn Rate: What percentage of customers do you lose each month? (If you have 100 customers and lose 5 this month, your churn rate is 5%).

The formula is: LTV = (ARPA * Gross Margin %) / Monthly Churn Rate

Once you know your LTV, you can work backwards to figure out what a good CPL is. A healthy business model often aims for a 3:1 LTV to Customer Acquisition Cost (CAC) ratio. So, if your LTV is $9,000, you can afford to spend up to $3,000 to acquire a new customer. If you know that your sales team converts 1 in every 10 qualified leads, then your target CPL is $300 ($3,000 / 10). Suddenly, a $50 lead from Meta doesn't seem expensive; it seems like an incredible bargain.

This is the math that allows businesses to scale agressively and intelligently. I've built a simple calculator for you below so you can play with your own numbers and see what your target CPL should be.

This is the main advice I have for you:

To pull this all together, moving from a single, simple campaign to a more robust structure is the single biggest leap you can make in your advertising maturity. It's the difference between just spending money and actually investing it in a predictable system for growth. Here's a summary of my main recommendations for you to get started.

I know this is a lot to take in, and it might seem more complicated than your original plan. But this structure is what separates the advertisers who struggle month after month from those who build truly scalable, profitable customer acquisition engines. It requires a bit more thought upfront, but it pays off massively in the long run.

Managing this kind of multi-campaign structure, constantly testing new creative, analysing the data, and optimising based on your LTV goals can be a full-time job in itself. This is where expert help can make a significant difference, not just in saving you time, but in accelerating your results and avoiding costly mistakes along the way.

If you'd like to go over this in more detail, I'd be happy to offer you a free 20-minute strategy session. We could have a look at your account together on a call, and I can give you some more specific, actionable advice tailored to your exact products and audiences. There's absolutely no obligation, of course. Just a chance to get a second pair of expert eyes on your strategy.

Regards,

Team @ Lukas Holschuh