Going once. . .going twice. . .sold!
Imagine an auction like this happening, but all behind the scenes of your computer and at lightning speed.
Facebook ad bidding isn’t quite like that, but it does still function in a fundamentally similar way.
When it comes to Facebook ads, you have the option of selecting either lowest cost bid strategy or target cost bid strategy.
It’s easy enough for Facebook advertisers to select one of these, then sit back and let Facebook do the work.
However, we’re here to provide tips and tricks for making the most of your Facebook ads bidding strategy.
Yes, it does require you to do some work.
But, the rewards of hacking Facebook bidding are too great to overlook for the sake of easy living.
The right bidding strategy can drastically reduce your CPA, boost your campaign efficiency, and improve cost stability so you can scale appropriately.
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It’s time to step up and investigate the right way to advertise on this platform.
We’re explaining what your options for Facebook ads bidding are and how to set up a campaign for each.
We’re also exploring how to choose between these types and tips for optimizing your strategy.
What are Your Options for Facebook Bidding?
The goal of Facebook ads bidding is to get the cost per action (whatever action that may be) as low as possible.
In order to help you achieve the lowest CPA, the platform is designed to have you pay the lowest amount possible to win the bid and display your ad.
And it’s not just your bid that determines if you win the auction.
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Other factors include:
- “Estimated action rate” as determined by Facebook’s algorithm
- The ad’s relevance score
Your campaign starts with selecting which bidding strategy to pursue.
As mentioned earlier, your two options are lowest cost vs. target cost.
Lowest Cost Facebook Bidding Strategy
As the name suggests, a lowest cost Facebook strategy for bidding is intended to save money by getting you as many placements as possible at the least cost to you.
The main benefit of this approach is efficiency.
All you do is leave it to Facebook to get placements and use your budget to its max.
For companies with tight budgets, lowest cost Facebook bidding is especially attractive in the short term.
However, lowest cost is also relatively unstable.
As your spend rises, or competition increases, your performance may suffer.
This option also comes with the ability to set a “bid cap”
A bid cap refers to the maximum amount you want Facebook to spend on a specific placement.
Don’t just set your bid cap arbitrarily, though, or at the lowest number possible.
Instead, refer to average CPA from a previous Facebook campaign, then set your bid cap as 25-30% higher.
For example, if your average CPA from Facebook is $25, set your bid cap at $30-$35.
Make sure to leave this as your bid cap for the ad’s “learning phase” that lasts the duration of your conversion window.
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During this period, too, it’s important that your daily budget is set at least 5X your bid cap in order to meet the 50 conversions needed.
With this Facebook ads bidding strategy, you set the amount that is your goal for the average cost of an event.
Instead of bidding in the cost per actual event, the key word here is average cost.
Facebook may exceed or go below your target cost bid amount.
But, over the course of the conversion window, the average cost will come as close to your bid as possible without exceeding it.
Here’s an example of this Facebook strategy in action:
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If you set your target cost at $10 and a total budget of $50, Facebook may get you six ad placements.
These six placements total $48 for an average of $8 per placement.
Target cost Facebook bidding is great for businesses looking for stability as they plan to scale.
Though you’ll likely have to spend more, you’ll likely achieve stable performance for a longer period of time than a lowest cost bidding strategy.
However, initially the cost to you will be greater as the learning phase takes place.
Also, even if there are lower cost placements available, Facebook will always stick to your target cost bid.
This could mean wasted opportunities and money if you don’t carefully set and track your bid.
How to Set Up Ads Bidding for Your Facebook Campaign
As you launch your Facebook ads and set your bid, there are a few options you need to set besides the bid strategy itself.
- Choosing your optimization for ad delivery
- Setting the conversion window
- Picking a delivery type
Ad Delivery Optimization
With ad delivery optimization, you are deciding which type of people most want to see your ad.
What we mean by this is that if you optimize for conversions, you’re deciding that people who are most likely to convert will be shown your ad.
If you optimize for Post Engagement, however, you’re choosing to be shown to people who have a history of liking, commenting, and sharing ads.
This decision regarding your Facebook ads bidding strategy also determines how you’ll be charged.
Optimize for awareness, you pay for impressions.
Optimize for clicks, you pay per click.
Depending on your campaign objective, your ad delivery options for Facebook bidding will vary.
Keep in mind, too, that how you optimize can affect the cost of your campaign.
Different audience types take different actions.
This can therefore affect your relevance score and action rate, both factors of Facebook bidding mentioned earlier.
The conversion window means a lot like it sounds: the time it took from when someone saw your ad to when they converted.
For example, let’s say you set a conversion window of 1 day click.
A user sees your ad, clicks into it, then leaves the site before they buy anything.
They return 3 days later to complete their purchase.
However, because this falls outside your conversion window, it’s not attributed to your ad.
Facebook’s attribution model will show you that they clicked but did not convert.
If you had instead set the conversion window for 7 day click, your ad would get the credit.
With the conversion window option for your Facebook bidding, you can set it to either just clicks or clicks and views.
Including those that just viewed your ad is especially helpful for retargeting campaigns.
In these instances, a user has already clicked your ad in the past and still has the URL in their cache.
They just need to see the ad to remember they want to buy!
Though more focused on scheduling, delivery type is a consideration to keep in mind for your Facebook bidding.
In general, it’s best to stick to the default: standard delivery.
With this option, Facebook determines the smoothest pacing to reach your goals even through market fluctuations.
Accelerated delivery, on the other hand, is for when you need to push out a campaign quickly.
This may be the case during high-volume periods like Thanksgiving or Christmas when you’re looking to get your ads in as many places as possible in as little time as possible.
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Keep in mind, you can only opt for accelerated delivery if you chose a lowest cost bidding strategy.
Choosing the Right Facebook Ads Bidding Strategy and A Tip for Success
Here’s the bad news first: there is no right strategy across the board for Facebook bidding.
It’s going to depend on your specific industry and brand, and adjusting based on how your campaign is performing.
In general, a lowest cost bid strategy is good for spending the full budget and maximizing profit.
Meanwhile, target cost is best for getting as many conversions as possible and scaling, even if it costs more.
Despite there not being a perfect answer, there is one important tip that you can keep in mind that helps a Facebook bid strategy perform better.
Start With a High Bid
Whether you opt for a lowest cost or target cost bidding strategy, it helps to have a higher bid right from the start.
Image source: https://www.adweek.com/
A higher bid is the best chance for your ad to be shown to people likely to convert.
And this is the key to a higher ROI.
Also, if your ad performs poorly even with a higher Facebook bidding strategy, it indicates something is wrong with the ad itself.
When performance is poor using a low bid, it’s unclear whether it is the bid or the ad that is the cause of the problem.
Another benefit is that you’ll have the upper hand on competitors.
You’ll expand your reach while they deal with either a rise in ad spend or a loss of their own reach depending on the bidding strategy.
Once you achieve consistent results, you can begin tweaking the campaign and reducing your bid.
Having an effective Facebook ads bidding strategy is the key to a successful campaign.
Understanding what Facebook bidding and how to set it up is the start of maximizing performance.
Keep the above tips and information in mind as you set up, adjust, and optimize your ads.