Facebook Ad Bidding 101

Facebook ad bidding can be a tricky thing. If you bid too low, you may not get the reach you want and if you bid too high, you could be spending more per engagement or action than you would like. The secret is to look at all the aspects of Facebook bidding, and then optimize your campaign bids to your specific business goals.

Here is a brief breakdown of the bid options you have for each Facebook campaign objective:

1. Video Views: You can choose between 10-Second Video View and Impressions
2. Conversations: You can bid on Link Clicks (CPC), Impressions and Conversions
3. Traffic: You can bid on Link Clicks and Impressions
4. App Installs: You can bid on App Installs, Link Clicks and Impressions

Essentially you are bidding on the action Facebook users take: viewing, clicking through and buying on your store. You can view and customize your bidding options by going to Facebook Campaign > Ad Set Edit > and scrolling down to ‘Optimization and delivery’.

Now, let’s dig in.

Facebook Bidding Options

CPM Facebook Bidding

With CPM you are bidding for the amount of impressions your ad gets within your target audience, regardless of the objective you have set. This is one of the most unpredictable types of bidding methods and is therefore better suited for bigger brands with bigger audiences, looking to deliver a lot of impressions – or get big reach.

CPC Facebook Bidding

The most utilized of the Facebook bidding options is CPC, or cost per click. Like all types of PPC advertising, you only pay and bid on the amount of clicks you get. Unlike other PPC campaigns, Facebook counts a lot more than a click-through as a ‘click; any reaction to the post counts: comments, shares, reactions, click to website, clicks to view videos, clicks on buttons, etc. What you aim for is the highest CTR possible, as this will ensure your CPC is as low as possible. This is because Facebook is in it to make money, so if your ad is not getting the clicks, it will be flagged as low relevancy and won’t deliver it.

Facebook Conversions Bidding

Setting your ad set’s objective to conversions means you are bidding on reaching people who are more likely to fulfill the ad objective you have set. For instance, if you have set your ad objective as web clicks, then you are bidding on people who actually click. Or if you choose ‘Page Likes’ then you are bidding on new leads, or conversions.

Optimized for Objectives (or oCPM)

This is the cost per 1,000 impressions and this ‘bid’ is something that happens automatically when you have selected your campaign objective. Facebook will allow you to optimize your bids on a bunch of things – from clicks to websites to event responses – showing your ad to your targeted audience as many times as possible. For this option, you are not specifically setting your bid, you’re leaving it up to Facebook to bid whatever it feels is needed to reach the people who are more likely to do the action (for example click through to your site) you are optimizing for. You are paying for this reach.

The downside of this selection is that you need a highly-refined, smaller audience for it to perform well and it is best suited for brand awareness and trust-building.

Optimized for Clicks ( or oCPC)

Working similarly to oCPM, except Facebook will display your ad to people within your target audience who are more likely to click, which means instead of paying for impressions, you are paying per click.

Now, optimization for clicks  doesn’t necessary mean clicks to your website. As mentioned, this includes all actions to the post and ideally for those eCommerce stores wanting a combination of awareness and post engagement.

Optimized for Daily Reach

Almost the same as CPM bidding mentioned above, this Facebook bidding type will show your ad to as many people in your target audience as possible. The difference comes in that it won’t show it more than once per day. With this bid type, you are letting Facebook know what you are willing to spend per 1,000 people reached. For this bidding type, you will want to use a small, tight target who will be more likely to engage when seeing your ad.

The next thing you will need to consider, regardless of the bidding type you will choose, is whether to go manual or automatic.

The next thing you will need to consider, regardless of the bidding type you will choose, is whether to go manual or automatic.

Manual Vs. Automatic Bidding

Facebook experts like Ben Malol will recommend manual bidding. You will see depending on the type of campaign you’re running, an average or maximum.

By selecting ‘Average’ manual bid, you are essentially telling Facebook the average amount you’re willing to spend per conversion, to which Facebook will do their bit to stay within that budget limit while delivering the best results. ‘Maximum’ tells them the highest price you’re willing to pay.

Facebook Bid Factors

There are three things which Facebook looks at when choosing whether ads are shown. These are:

Your Bid

Bidding is essentially an auction, meaning if there are three businesses with the same target audience, niche and relevancy, the bid amount will be the deciding factor.

Your Action Rates

Estimated action rates are what Facebook algorithms will be the number of actions taken on your ad. When choosing between two bids, Facebook will prioritize the ad (and bid) it feels will get the highest amount of actions because it means more income for them.  

Main Takeaway

Whichever bidding (or objective) type you choose, test, test, test! You will want to find the best bidding approach for your goals for your business and your budget. A/B testing will allow you to find the perfect set for your audience and ad budget, ensuring good ROIs.

Have something to add? Get in touch in the comments below.

 

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