Bidding guide for running ads on Facebook – Social advertising is now a popular marketing area for most businesses. When it comes to Facebook and lots of other social media platforms, the actual advertising cost is determined by the bid. In other words, it's an auction for the entire advertiser. The number of advertisers who want a Y ad for their businesses and the amount of Z ads that will display (determined by Facebook).
Facebook will then adopt a fairly advanced algorithm on their side to calculate who will show the ad and at what price. There are many different factors that help Facebook calculate the exact rankings from ads on their side.
What will determine who is the winning bidder?
Your bid is a combination of target and ad copy as well as an estimated action rate from Google.
So what does this mean for you and your business side that you are entitled to ask. We will mention this below.
The 3 most important aspects for your side ad to be displayed
- Bid from you.
The higher the bid you make (if you choose manual), the more changes you make to your ad being displayed, but the lower the advertiser the more likely it is to show. than you, because ads from him / her are more popular for the audience they target.
Most people and businesses are using automatic bidding, which is perfectly fine. We use automatic bidding for 90% of our Facebook campaigns and the performance is good. When using automatic bidding, Facebook will automatically identify bids from you and then set bids that match your campaign goals, ad sets, ad copy and your budget (lifetime or row. day ). This means that Facebook is trying to allocate the lowest bid possible, but also high enough for you to be truly impressed and reach the target you want.
- Relevant points (and related data)
Relevant point is that the KPI is weighed by the overall positive response to ads from you (click, like, share, comment, etc.) minus all negative related reactions (not participating, leaving Negative comments, don't click, use as few ads as this one). Relevance is an overall score of 1-10 when Facebook combines the metrics you see above.
The reason why one should care about the relevance score is because this reflects the ad quality if you have done good targeting and ad copy. If not, you'll get a low score and the targeted audience you want will be less likely to convert or engage with your business and ads.
The other very important reason is that it will increase your CPM, so you will receive less reach and more expensive clicks. This is why you want to drop ads with low relevance scores, usually 1-4. But, a low relevance score doesn't mean it's a bad ad. Sometimes we have ads with a score of 7, which converts better than 9 or 10, which means a higher ROAS for a 7-point ad. Be sure to check this out for your own business.
- Estimated action rate
The higher the action rate (click, convert, etc.) for the desired campaign goal on your side, the better. This is calculated using several different factors, but if the algorithm believes that your ad will get a high action rate, this will help reduce the CPM, thus also getting a higher relevance score and winning the bid. .
This is not a metric you see for yourself and are only evaluated by Facebook with optimization. So it's not something we can adjust, but we still have an impact on this ad targeting us.
How does Facebook advertising bidding work?
Facebook advertising costs pay by CPM or click on the link. You will pay with impressions most of the time depending on the goal you choose. Sometimes, you get to choose different optimizations for ad delivery, with link clicks, for example most of the time it will pay for the impressions you receive. However, the Facebook algorithm will only optimize for the most “link clicks”. good Whatever you choose, with the desired amount displayed.
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CPM with CPC Bidding
Facebook is primarily used as a CPM bid at the time of this writing, but they also offer several CPC bidding variations, such as traffic targeting campaigns. Here, you will be selected to pay by the click of the link only, as shown above or you have left this as the default for ‘Impressions’.
Paying for impressions means you pay when ads show up, it doesn't matter if someone actually joins it, watching videos you own, clicking on videos or whatever you want to optimize. for (CPM bidding). On the other hand, if you choose to click the link, you'll only pay for the number of link clicks (CPC bidding) you get.
CPM bidding is very popular with this type of platform for social media, where Instagram, Snapchat, Twitter, etc. offer CPM bidding, compared to search engines like Google and Bing. Here, they only provide CPC bids in which you can only choose to pay per click and even pay per conversion.
CPC bidding and payment on Facebook
When you choose to pay for each click on a Facebook link, you'll actually pay for some click-related actions.
Links related to clicking on ads on your side are as follows:
- Click to access another website
- Clicks to call to action to another website (for example, Shop now or learn more directly)
- Click to install the application
- Click the canvas app on Facebook
- Click to watch the video on another website
Manual bidding compared to automatic
Manual and automatic bidding is best to use for ad sizes. Manual bidding options have changed over the years from maximum, average and minimum bids to provide the lowest cost. By default, every campaign will run with automatic bidding as described earlier, which will be automatic, appropriate for your audience, competitors, and ad copy. This means you'll get the number of impressions right there because Facebook will only raise or lower your bid.
When choosing manual bidding, you'll have more control over what bids you have and know how much you've spent. However, you will face 2 problems if you have not set the right bid.
- You bid too low, so you don't spend your budget
- The bid you made is too high, so the campaign is not profitable for you
However, the good thing about manual bidding compared to automatic bidding is that if you check this right, you will have a good chance to expand your ads a lot, because maintaining a good ROAS is easier. . There are no true / false depending on the business and target audience on your side, but we recommend experimenting with manual bidding, for ad sets over USD 150 per day or 50 conversions / week. Check out both the lowest prices with bid limits and target costs, to see which works best for you.
Remember, the more control you have, the easier it will be for you to optimize your campaign. However, getting good results with manual bidding requires more experience, more skills with Facebook ads and can cost more because you need to test more.
Also remember that no ad set or ad copy can maintain high performance forever. Eventually it will no longer fit or need adjustments. Although you have a really good week with your set of conversion ads or traffic, that doesn't mean the next week will be good. Your competitors adapt over time, your audience will be saturated, your audience will begin to dislike advertising from you if you continue to show it to them (frequency is too high). Be sure to always update and change this to maintain good results.
The bidding strategy has also changed over the years, and now you have the following option to choose from.
- Lowest cost
- Lowest cost with bid limit (manual)
- Target cost (manual)
The lowest cost currently is the automatic bidding option. This is the default option to the entire campaign and is set by Facebook.
Lowest cost with bid limit is the first manual bidding option. As shown below, this bid strategy should be selected when you don't want to bid more than a certain amount. This was formerly known as maximum and good bid to spend your budget effectively. This bid strategy will pay for the entire maximum bid you have chosen and can sometimes get a higher ROAS because it will prioritize action with the lowest cost. For example, this will result in getting a lot of low-cost conversions (if you choose a conversion campaign) because bidding on your side will try and optimize for the lowest cost for each action first.
Target cost is the second bidding strategy option and is usually better for larger budgets (however it doesn't always mean you need to double check) and try to maintain your average cost. Stabilization instead of maintaining the lowest cost.
We have tried to illustrate our point of view below with a small chart. The yellow line is the average cost of action.
When using the lowest cost bid with a bid limit of US $ 9, you will receive conversions that cost under US $ 9 in this 3 conversion example.
When using the target cost bid with example 9 USD, in this case you will get 6 conversions, because the average cost of all 6 conversions is USD 8. In this case, you will have an additional 100% of revenue with target cost, while only raising your bid a little. However, your average CPA (cost per action) or cost per conversion will be much higher.
Lowest cost with average conversion cost of bid limit ((7 + 5 + 2) / 3) = 4.67 USD
Average cost of conversion of target bid ((7 + 5 + 10 + 11 + 2 + 13) / 6) = 8 USD
In other words, your target cost bid from you will try to maintain a more stable conversion cost, even if you pay for a more expensive conversion. However, using this bid strategy will usually help you get more conversions, which in turn leads to a higher total revenue. So if you can afford to spend a little more or run a campaign with a slightly lower ROAS, you'll get more revenue by choosing target costs.
This bidding strategy will lead to very good results with a larger budget. Remember this is always compared to the ad placement level and does not take into account ad or campaign copy levels. If you choose to optimize for conversions, give it a try and get the most out of getting 50 conversions per week for your creative set. This will sometimes be a lot, but then we recommend staying with automated bidding.
Types of ad delivery
When choosing an ad serving type, you can choose between the two options below:
Standard is the most common, and also the default. This just means that Facebook will try and spend your budget to allocate the budget for the amount of time you want your advertising to work. Facebook won't rush any bid, if they think it will get cheaper / better then. If you have chosen an ad schedule, it will only be selected within the scheduled time range from you.
Accelerated delivery is when you want your ad to be served the fastest. As shown below, it will help you get the fastest results. This means that if you choose daily budget and expedited delivery, ads from you have spent your daily budget at 2pm, then pause until the next day and try again.
The downside to choosing accelerated delivery is that it is usually more expensive, because it only wants to give you an impression as soon as possible and is not interested in choosing the right bid.
5 quick tips to improve ad performance and reduce advertising costs
- Allow creative set to spend some time and money to pass the learning phase (shown below the ad group name)
- Only evaluate ad performance based on the goals you want and then filter out the appropriate numbers. If you want to convert, don't look at CPC, if you want to join, don't look at link click.
- After the learning phase, create new ad copy and creative sets to separate performance tests. Remove the worst performing ad.
- Split test winning ads with manual bidding
- Tell a good story with your ad, to make it look more engaging and authentic to your audience.
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Facebook advertising and marketing is an auction, with limited advertising space. There are several reasons why you won or lost your bids correctly and you have chosen both an automatic and manual bidding strategy as we mentioned above. Facebook is a great way to market to a variety of businesses, but remember to try Instagram, LinkedIn, Snapchat and Pinterest (depending on your interests and target audience) that can sometimes surprise you. fruit.
As mentioned, Facebook is always changing and updating algorithms, but for now try and test some of the strategies and variants mentioned above. Remember that there is no gold target, position, … for the entire business. Everyone has different situations and therefore we always recommend doing a lot of split testing.
However, if you already have a lot of data, make sure to use the best possible way to maximize specific information about your target customers. If you don't have the time or skills, try hiring freelance or good companies to help you.
Either way, make sure to stay updated on our social media marketing page here, for the latest news!