Facebook ads Bidding Strategies include predefined goals and parameters that help marketers get the most value for their money. If it is your first time on Facebook, here are the steps you should take as a marketer.
Advertisers have adopted the best Facebook bid strategy due to Facebook. The social media era calls for boosting sales and maintaining contact with potential customers.
For e-commerce sellers ahead of their competition, paid Facebook ads always have the advantage over free ones. In that case, we can experiment with Facebook ad bidding strategies.
The Facebook ad bidding process consists of an auction in which marketers bid to have their ads displayed on Facebook. The highest bidder determines ad placements.
Even if the ad campaign was spot-on, if you do not use the right bidding, you will lose money and lose your audience.
Bidding on Facebook ads – how does it work?
Advertisers bid for their ads to be placed within Facebook’s various ad placement locations through Facebook’s ad bidding system. The highest bid will likely get you the most ad placements, but it isn’t the only factor determining ad placement. Facebook’s bidding system makes it different from other auction advertising models. Balancing the needs of advertisers and users makes money for advertisers while serving relevant content to users
Three main factors influence ad delivery:
If you win the bid, this is the amount that you will potentially pay. The Facebook system allows you to pay the smallest amount possible while winning the bid. Consider this example: If you set your maximum bid to $1.01 while your competitor set theirs to $1.5, you’ll only need to pay $1.01 instead of $1.5 to win the bid.
Relevance score – You get a relevance score for your ad by considering all the positive activities like liking, commenting, and clicking versus all the negative activities like hiding or ignoring it. Facebook values your ad’s relevance score highly. Your ad will boost Facebook time spent if you have a high relevance score.
The estimated action rate is a part of Facebook’s ad delivery algorithm. Your ad will be given priority if the algorithm estimates that it will get a lot of clicks.
Strategies for bidding
You can use three types of bidding strategies: lowest cost, lowest cost with a bid cap, and target cost.
1. Lowest cost
In the lowest-cost strategy, your ad is placed as many places as possible at the lowest possible cost.
You don’t have control over actual ad costs when using this method.
2. Lowest cost with a bid cap
A bid cap is set similarly to the lowest-cost strategy, so Facebook cannot bid higher than the amount you set for your bid cap. Using this strategy, you can ensure that you won’t be bidding higher than what each conversion will earn you.
You may have problems spending your entire ad budget if you set the bid cap too low. Start with the average cost per result from your previous campaigns. According to Facebook, your daily budget should be at least five times your bid cap.
3. Target cost
An average cost per conversion is the goal of the target cost strategy. If you use this strategy, Facebook will be able to bid above and below the amount you set as your target cost but will try to keep the overall average cost around that amount. Using this strategy will increase your conversion rate. The target cost strategy allows you to increase your campaign budget safely by limiting your average conversion cost. Here are some examples such as conversions, app Installs, catalog sales, and lead generation.