There is more to Facebook advertising than you probably know.
While having a great design and the right target group is extremely important, keeping a track of the numbers that your ads receive is just as important. Numbers, like Facebook Relevance Score and Facebook bidding (CPA, the amount of the bid, etc.) can improve your ads for the future.
Today, we are talking about the mystery behind Facebook Bidding!
What is Facebook bidding?
If we imagine that the Business Facebook is an auction house, the participants will be us, the advertisers and users of the business side of Facebook. Each of us will fall into a section, full of competitors, wanting to win the bid for the specific industry. But what is the bid and what are we winning?
A bid is a number representing how much you value showing your ad in the slot available in an auction. If your bid wins, your ad has been delivered to many people compared to your competition.
What affects Facebook bidding?
Before I dive into details, let me say that Facebook will always make you pay the lowest amount to have your ads displayed to as many people as it can. Facebook wants to satisfy the needs of every advertiser, even if their number is over 1 billion people because, in the end, the online platform is the real winner, collecting the profit.
Here are some factors, that can and will affect your bid:
The very first thing you do, when creating a new campaign is to choose the Campaign (Marketing) objective that you want to achieve. And this is the first factor that matters for your bid.
This is the goal you want to achieve with your ad – are you looking for traffic, page likes, conversions (leads, purchases etc.). There are three main categories of Campaign Objectives:
Awareness. These are the objectives that generate interest in your product/services. When selecting Awareness, you will be able to choose between Brand Awareness and Reach.
Consideration. Choosing one of these objectives will help you to get people to start thinking about your business and desiring to know more about it. Traffic, Engagement, Lead generation, Video Views, App Installs, etc. are some of the examples you can choose from in this category.
Conversions. The last type of objective you can select is the one that encourages people interested in your business to take serious actions like purchase or use your products/services.
Conversions, promoting your shop catalog, and getting more store visits are among the choices you can pick here.
Choosing the right objective is crucial, as if you set the campaign objective as Reach, you won’t be able to bid on conversions as there is nothing to convert.
Another very important factor that affects your bidding is choosing the right optimization. It is up to you to choose how you want your ads to be delivered. Optimization is all about finding the most efficient way to get as many results as you can. There are four different ad optimization options:
Link Clicks. Choosing this will deliver your ad to the right people to help you get the most click links at the lowest cost.
Impressions. Impressions are all about reaching many people so every “auction” you win, your ads will deliver.
Landing Page Views. The title says it all, this optimization will get your website traffic at the lowest cost possible. (You will need to have Pixel installed to track views).
Daily Unique Reach. This is all about how many people see your ads ONCE per day.
Not long ago, you had the opportunity to choose between an Automatic bid, where Facebook decides how much you pay for bidding, and a Manual bid, where you had the control to choose how much you were willing to pay.
But to be more accurate on how the strategies work and their benefits, Facebook changed the name to Lowest Cost Bid (formerly Automatic bid), added a checkbox named Set a bid cap (formerly Manual Bid) and added a bid that works only for conversions – the Target cost.
They still work the same way, so let me explain each one of them!
Lowest Cost bid
This is the best way to start as a beginner. Choosing this option will get you the most, based on your optimization for ad delivery (the 4 options mentioned above) for your budget. This strategy is great for spending your budget as efficiently as possible.
However, if you want to make sure that Facebook is not rising above the amount you want, setting a bid cap might be just for you. The bid cap is good ONLY if you:
- Know how much the result of your ad set is worth to you
- Know how much you can afford
- Want to have control and specify the maximum cost per given result
- Have enough time to change, if the current cap is not working for you.
Remember, the bid and the cost of a result are related, but they are NOT the same thing. Succeeding with a bid cap is less about finding the perfect amount, but for monitoring and adjusting the response to your results.
Target Cost bid
The Target Cost bid is good for conversions such as App Installs, Leads, Catalog Sales and Store Visits. With this bid, you are the one telling Facebook how much a conversion is worth to you and they try to meet your goal.
If you use Target Cost Bid, make sure that amount of bidding is 2x than the actual target cost. If Facebook doesn’t think it can meet your target cost per conversion, they won’t deliver your ads.
Sometimes, website conversions take longer than just arriving on a website and completing an auction. That’s where the Conversion Window appears. You have the chance to choose between 1 day and 7 days. It all depends on when will the people convert, whether it is the same day or it takes longer for them to take action.
To sum up, if you want to get the most out of your budget, the Lowest Cost Bid is for you. If you are looking for a stable average cost per optimization event, Target Cost Bid is the one for you.
How to win “the auction”?
If you fail to place the right bid for your ads, there will be consequences. You will either have to pay too much for your ad results or your ad will never get delivered due to low bids. This can be very bad for your business and your pocket, so let’s talk about how to avoid situations like these.
The key to success in Facebook Marketing is trial and experimentation. You know that you are doing something the right way if you keep a track of the numbers that your ads receive once the ad is over.
Always look at results such as the CPA (Cost Per Action) and your Ads’ Relevance score. The Cost Per Auction is something that you can’t ignore. It shows the way you get charged, but only the people, who took action because they saw your ad.
The Relevance Score will directly affect the cost of your ad and how Facebook prioritizes the delivery. Learn more about Facebook Relevance Score.
The last number that you need to check is your bidding amount (if set the bid on your own). Don’t set it too low! Facebook always charges the lowest amount possible to get your ads delivered.
Facebook bidding is all about knowing your previous ads and keeping track of their past performances. There is no right bidding strategy to use. If you want to master it you might need to step out of your comfort zone. Experiment and learn to look at the numbers.