Your Cobalt Digital Marketing Guide to Facebook Ad Bidding Strategies
August 10th, 2021
The strategies you use for your Facebook ad bidding can make or break your campaigns. That’s why it’s essential to ensure your strategy is strong and effective, as you could end up losing money, paying too much, or completely failing to have your ads delivered if you aren’t taking the right steps.
Today, your digital marketers in McAllen at Cobalt Digital Marketing want to discuss how Facebook ad bidding works and share a few best practices to use.
A Quick Overview of Facebook Ad Bidding
The Facebook ad bidding system functions as an auction intended to provide optimal value to both advertisers and users. The system is meant to improve user experience, matching users with the ads most relevant for them.
Ad bidding is one of the most important factors in determining how your campaign will perform.
However, while a higher bid will increase the potential of having an ad placed, it isn’t the only determining factor in ad delivery. The most critical factors that affect ad delivery include:
- The bid – This is the amount you are paying to potentially win a bid. The bidding system allows you to pay the lowest possible amount but still win the bid. For instance, if your competitor sets their max bid to $5, you’ll only need to pay $5.01 to win the bid.
- Relevance score – The relevance score takes into account all the positive and negative interactions users have with your ad. Your ad’s relevance score is a very critical factor that Facebook takes into consideration.
- Action rates – Facebook’s ad delivery algorithm will estimate whether ads will receive a high number of (positive) actions, and if so, will give it priority over other ads.
While a bid is the amount you’re willing to pay to achieve a desired outcome, it is not the actual cost of your chosen optimization event. If you want to manually control the cost of an outcome, you’ll want to use cost cap.
It’s also important to note that control maintained over bids can affect the system’s ability to help you reach your desired outcomes.
Standard & Accelerated Delivery Options
When it comes to ad delivery options, you have two choices: standard and accelerated.
Standard delivery means that your budget will be spent evenly throughout the duration of a given campaign. So for instance, if you set a $100 budget for a 10-day campaign, Facebook will try to ensure that around $10 is spent every day. This is the default delivery option.
Accelerated delivery means that Facebook will spend your budget as quickly as possible to help you get the best results as fast as possible. Accelerated delivery is helpful during major sales events or during the holiday season.
Why an Effective Facebook Ad Bidding Strategy is Important
Your ad bidding strategy is tied to business outcomes such as sales, client growth, and brand reach. Depending on what you want out of your campaign, you can use a bid strategy that best matches your expectations and how you want to measure success.
The right bidding strategy will help to improve your campaign’s quality and effectiveness, while also improving your return-on-investment and profitability. In order to identify the best strategy to use, you’ll want to first determine what your overall goals are and your primary key performance indicators (KPI).
Facebook Recommends the Following Strategies for Ads Bidding
Performance goal: Optimizing results for your budget
Available bid strategies: Automated bidding
Best used for: Spending a full budget, branding, getting most volume results possible
What to keep an eye out for: Higher cost per action (CPA) than you might want
Performance goal: Maximize conversion value
Available bid strategies: Highest value through automated bidding
Best used for: Spending full budget & focusing on higher value purchases
What to keep an eye out for: Requires pixel to pass back purchase values
Performance goal: Control costs
Available bid strategies: Cost cap
Best used for: Keeping cost per action (CPA) at or below certain cost
What to keep an eye out for: Slower spend, costs may exceed cap, bigger fluctuations in spending and cost per action (CPA)
Performance goal: Control return on ad spend (ROAS)
Available bid strategies: Minimize ROAS
Best used for: Balancing ad spend and return
What to keep an eye out for: Delivery may stop, requires pixel to pass back purchase values, requires calculating bids based on projected conversion rates and marginal costs
Performance goal: Manually cap Facebook bids in auctions
Available bid strategies: Bid cap
Best used for: Advertisers using internal bidding or lifetime value (LTV) models
What to keep an eye out for: Requires frequent bid changes, does not control for cost per action, requires calculation bids based on projected conversion rates and marginal costs
Cobalt Digital Marketing: Your Facebook Digital Ads Specialists in McAllen
The world is on social media, so you need to make sure you’re getting in front of all these potential customers. Through our social media digital ad services, we can help you generate thousands of views, improve engagement, increase traffic, and boost sales – all at the click of a button.
Our digital marketing agency knows Facebook digital ads, just one of the many services included in our Cobalt Formulaᵀᴹ that helps your business succeed.
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