How to Choose the Right Facebook Ads Bidding Strategy?

Facebook ads bidding strategy entails predefined goals and parameters to help marketers get the best value for the money. As a marketer, here's what you need to to, if it's your first time on Facebook.

Facebook has driven advertisers to adopt the best Facebook ads bidding strategy. The modus operandi is to boost sales and maintain contact with potential customers in the age of social media.

As a seller who’s ahead of their competitors in the e-commerce market there’s always a sense of dependency on paid vs free Facebook ads. That takes us to experiment with Facebook ads bidding strategies and all there is to it.

To that effect, Facebook ads bidding is all about an auction where marketers bid for their ads to be placed in Facebook’s ads placement locations. The highest bidder gets the most ads placements.

Without the proper bidding, you lose not only money but also a farewell to your audience, even though the ads campaign was spot-on.

Terry Goodman once said, “Knowledge is a weapon. I intend to be formidably armed”.

Today, we will equip ourselves with the awareness of the Facebook ads bidding strategy that puts us in front of our competitors.

Facebook Ads Auction & Bidding System

Why all the sweat? As explained in the beginning, Facebook’s ad bidding strategy works around an auction system. Every advertiser, known as a bidder is in hopes of winning the auction with the highest bid. So, their ads can be placed the most in Facebook’s ads locations.

The auction system works by balancing the needs of advertisers with users’. As a result, this phenomenon enables advertisers to make money and serve relevant content to users.

Be mindful of the following factors:

The Bid

This is the amount an advertiser pays to potentially win a bid. The nutty engineers have designed the whole bidding system so that you only have to pay the least possible amount to win.

For example, if the highest bidder sets the amount to $1 and bids $1.5, you only have to pay $1.01 to become the lucky winner, not the whole $1.5.

Score Relevancy

A high ad relevance score means an ad helps users spend more time on Facebook. It matters! It is determined by people’s interaction with your ad such as liking, commenting, sharing, and clicking versus negative ones, such as hiding the ad or ignoring it. For sure, haters have boarded the social media platform as well.

Action Rates Evaluation

Under the table, it’s Facebook’s ad delivery algorithm. If the algorithm estimates an ad’s high number of actions, as stated above, more priority will be given to that ad over others.

The 'Delivery Vs Choice' Factor In Facebook Ads Bidding Strategy

Let’s clear the brain fog regarding Ads Delivery.

Basically, it means your ads have been shown to the target audience. To achieve optimum results, pacing, in other words, budget is configured accordingly. Pacing spreads ads delivery throughout the day or time frame of a campaign. Without it, ads are shown as soon as a campaign is launched.

More details regarding how pacing affects the budget can be found here.

The figure above depicts:

  • Aggressive budgeting (Grayline)
  • Ideal budgeting (Blue line)
  • Preserved budgeting (Redline)

Facebook has two delivery options on-hand: standard (the default) and accelerated.

Standard Delivery

Ensuring that the ads are evenly distributed throughout the campaign. This is the default delivery option. For example, if your budget is $60 for a 6-day campaign, Facebook will automatically distribute it to around $10 each day.

Accelerated Delivery

The accelerated delivery option is recommended if you’re cut short on time and want to set sail straight away. As soon as the campaign is launched, ads are shown frequently and quickly.

Here are a few points to be aware of before opting in for this option:

1. Budget is spent quickly.

2. Speed is prioritized over efficiency.

3. Option to determine how often an ad will be shown of course budget is used accordingly.

4. Accelerated delivery can turn out to be expensive compared to the Default option.

5. Advertiser has to manually set bidding cost.

6. Recommended by Facebook, run your ads for at least 2 hours.

Delivery option can be selected in the Ad set section of each campaign, as shown in the image below.

Everything You Need To Know About The Optimal Ad Delivery Experience

Facebook gives multiple options to advertisers for ad delivery optimization. The currently available options are:

  • Conversions

The default option. When using this option, Facebook tries to deliver ads to users who are likely to convert.

  • Link Clicks

This option optimizes ads to get as many clicks as possible from users.

  • Impressions

When used, Facebook shows ads to as many people as possible.

  • Daily Reach

If your goal is to reach an audience with a limited-time offer, this is an option. Its objective is to reach your audience at least once per day.

  • Brand Awareness

This option is designed to deliver ads to people who are sure to pay attention to them.

  • Leads

This option enables an advertiser to get users’ personal information, e.g., email addresses. It shows ads to people who indeed give away their information.

Landing Page Views

It shows ads to people who are likely to view a marketer’s landing page.

Competitors, advertisers, and marketers all use bidding strategies to control how Facebook spends its budget in the ad auction. When used correctly, it can lead to more profitable ads.

Many advertisers I’ve come across aren’t educated with the bid strategies, a problematic situation. Therefore, we will be taking a brief glimpse at each Facebook ad bidding strategy.

Lowest Cost

The default strategy and this one does not involve any effort at all. When setting up an ad campaign, you’ll come across Cost Control Field within the Optimization and Delivery section.

We’re not concerned about the goal related to Cost Per Action or ROAS (Return on Advertising Spend). Facebook will aim to get the most out of your budget when left blank. If a lowest cost is set, Facebook will suck the budget and the ad will reach to maximum users.

The best scenario to prefer Lowest Cost is:

  • You are spending your entire budget.
  • You’re not worried about Cost Per Action

Cost Cap

When cost control is used, Facebook automatically uses Cost Cap.

In some cases, Facebook gives the option to select Bid Cap or Cost Cap

If we set the option to Cost Cap, Facebook keeps the Cost Per Action at or below the set Cost Control.

Assuming we have a newbie and the budget is $10 for conversions. When Cost Cap is selected, Facebook will keep the Cost Per Conversion to or below $10. Facebook does recommend to prefer Cost Cap be in control.

Bid Cap

This option is available for most optimization options.

With the Bid Cap option, you can define maximum bid across auctions instead of allowing Facebook to bid dynamically based on your goals. This is best for those who have done their homework on conversion rates and can estimate the right bid.

Target Cost

If your goal is to maintain an average cost per conversion, go for this Facebook ad bidding strategy as an advertiser. Facebook keeps the overall cost at a set target amount with this objective. When maximum conversions are your sole goal, then use this strategy.

Summing It All Up

You may be thinking, why not set the bid to the lowest possible and get like 100 sales, right?

Doesn’t work that way. The result will be either you won’t reach the users you want, OR you won’t reach the expected audience outreach cluster.

The takeaway: use bid strategies to manage costs but don’t use them just because you think you’re a genius and can manipulate the system.

For most advertisers in the e-commerce world, the default bid strategy is acceptable. No complexities involved, nada, and still get decent sales.

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