The Simple Guide to Facebook Advertising Bidding

Consider Facebook advertising purchasing like a silent auction: you're looking to purchase an object (advertising space) by bidding against others seeking similar real estate. Bid too little, and Facebook will run an ad from someone else who has put in a more competitive bid. How do you bid the right amount?

Facebook doesn't just use your bid to determine who wins the auction; they also use the performance of your ad and the historical performance of your advertising account. If you have a track record of displaying highly engaging ads toward your target audience, the auction model will favor your ad. You should use this opportunity to make your ad content as relevant as possible to the audience segment you target to ensure maximum performance and a cheaper auction.

Facebook Advertising Bidding Modes

The first thing you will need to determine is how you would like to bid within the auction. There are a number of different techniques available to test and explore.

CPC (Cost Per Click). If your ads are bidding on a CPC basis, you will be charged when users click on your ads. If clicks are most important to you and you know how much you are prepared to pay for a click, then CPC is a good option.

CPM (the cost of 1,000 impressions, or the cost of 1,000 people seeing your ad). If your ads are bidding on a CPM basis, you will be charged when users view your ads, regardless of whether or not they click on them.

Optimized-CPM allows advertisers to define and prioritize their marketing goals when creating campaigns so Facebook can automatically deliver ads impressions against those goals in the most effective and efficient way possible. This powerful bidding mode allows Facebook to optimize your campaign's impressions towards users who are most likely to perform your specified action.

CPA bidding allows you to specify an action that is most important to them, then set a guaranteed maximum price that they’re willing to spend on that action. This bidding mode provides greater control over the price they pay for an action that is beyond a click. Current available actions for CPA bids include Page Likes, Offers received, and Link Clicks.

Determining Your Bid

When bidding, know how much you can afford to pay per click or for 1,000 impressions.  Of course, it may not always be possible to have this knowledge, especially if you are new to Facebook. Fortunately, Facebook doesn't make you bid blindly. You’ll be provided with a suggested minimum, maximum and median bid.

The main thing to remember: you are setting a maximum bid, or a “ceiling price.” This means that while you are unlikely to pay this much for clicks or impressions, you could pay up to it. On average, you will pay a discounted value of whatever is necessary to win the auction, based on what the marketplace is suggesting.

Optimizing Your Bid

Facebook will optimize your ads to help you pay the least amount of money per thousand impressions or per click while moving toward your campaign goal. However, there are actions you can take to ensure you’re spending your money wisely. If you see your costs rising over the course of a campaign, your targeting or ad creative may need tweaking. Look at the images, copy and target groups that are most receptive to your ads and hone in on them to lower costs. Testing is an easy way to see what's working and what's real time. Tour.png
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