These days, if you want to beat your competitors in the social media ads race, you have to put out more than just an eye-popping ad design and a catchy tagline. Now, it’s all about optimizing your Facebook ad bidding strategies and knowing how to target the right audience on the platform.
In the past, advertisers often criticized ad cost stability and their inability to scale. But, that’s where Facebook ad bid strategies come into play. For those not getting the cost per event that they’d like, or who are having trouble maintaining a stable cost within their budget, having a strong bid strategy can improve overall results. So, let’s take a closer look at what these are, how they work within the social media platform and how you can start using them to get your message out there.
What Are Facebook Ad Bidding Strategies?
Facebook ads distribute in an auction format. This means that the amount of money you spend to reach your audience is dependent upon (in part) the bid that you make on your ad. Facebook’s default option is to automate bids, but advertisers can still choose to manually bid. This is done so that you can better control your own costs and advertising budget. The goal of manual bidding is simply to keep the cost per desired action low.
Advertisers can achieve lower and more stable costs through the two bid strategies that Facebook offers: “Lowest Cost,” which is the default setting, and “Target Cost.” Each of these two strategies performs very differently.
The lowest cost bid strategy is designed to maximize your budget by getting you the lowest possible cost per optimized event. The advantage of choosing this option is that it’s efficient in the short-term, as it works to get you the lowest cost per event. However, this also means that those low costs may be short-lived, and therefore results may be unstable when you go to up your spending or find yourself facing tougher competition. This strategy also allows you to set up a bid cap to control how much Facebook spends on an event. This is a great way to prevent an ad set from overspending on a single event.
Then, there’s the target cost bid strategy. The goal of using this strategy is to help you achieve more stable results as you increase ad spending. Of course, this strategy is only available for app installs, lead generation, conversions and catalog sales. In theory, this bid strategy is recommended for when you plan to raise your budget to help scale costs.
When using target cost bidding, you will set a target cost based on your chosen conversion window, whether that may be 7-day click or 1-day view by default. The primary benefit of this strategy is that it gives you cost per event stability. The downside, however is that you may see higher fluctuations in cost until the learning phase is complete. You might also find that your overall cost per event is actually higher to that of what you spent using the lowest cost strategy. Another drawback is that Facebook will always try to get you a cost per event that’s around your target cost, even when there’s the possibility of finding you lower costs, which can obviously result in a significant waste of resources if you’re not careful.
Which Strategy Should You Use?
The answer to this question will always depend on your situation and the goal of each event. Most advertisers will stick with the default “lowest cost” without a bid cap. But, it’s also recommended that you consider applying a bid cap to prevent Facebook from spending more than necessary. Target cost strategies may be better reserved for those advertisers who are planning to run a long-term campaign or are dealing with higher budgets.
Though the bidding system has changed over the past few years, the basic idea of Facebook’s ad auction has remained the same. Advertisers bid on having an engaged audience see (and act upon seeing) their ads. While there are a number of factors that contribute to whether or not your bid will “win” over those views and conversions, approaching each strategy with a better understanding of all of the potential factors at play and how the process works can ultimately help you get the results you’re looking for, keeping your brand at the forefront of users’ minds.