Bidding Strategies in Facebook ads
These are the bidding strategies based upon which Facebook decides how much and how to bid for you in an auction where you compete with other advertisers if your bidding strategy is not meeting or according to your goals then you will not get the desired outcomes because the Facebook algorithm is a machine and it will give you output based upon the given input. The more accurate input you will feed to these algorithms the more accurate output you will get. Now, that was all about how important bidding strategies are in Facebook ads. As you will move future I will also share with you what these bidding strategies are, how they work, and when to use, these bidding strategies. Following are the bidding strategies that we use in Facebook ads.
Spending base bidding Strategies
Spending base bidding strategies that work on the total budget and try to give you as much as results by spending your all budget.
Highest Volume:
The highest volume bidding strategy tries to give you as many results as possible by spending your all budget. Previously it was known as the lowest cost, which means it gives you as many results as possible at the lowest cost possible within your budget. Now here is the question of when to use the highest volume bidding strategy. So, let's discuss it you can use this bidding strategy for lead generation, engagement, and awareness marketing objectives. If you are an e-commerce store then this bidding strategy is not for you.
Highest Value :
The highest Value bidding strategy tries to give you as many high-value results as possible, which means it gives you as many high-value results as possible within your budget. You can use the highest-value bidding strategy when you want to sell a product or service of high value. Now here is the question how Facebook will know which product is of high value and which is low? So, the answer to that question is that please refer to the meta pixel article where I have already discussed the importance of meta pixel, meta pixel event setup as well as how to give a value to these specific events. Let me guide you here a little bit about how meta knows which product has the highest value, facebook determines this by conversion tracking info which we provide to Facebook at the time of conversion setup. Actually, we tell Facebook that this particular event, conversion or you can say the product is of X amount of worth for us. The highest Value bidding strategy is usually used for e-commerce.
Goal base Bidding Strategies
Goal base bidding strategies work on achieving specific goals means you give them a target that these bidding strategies try to give you the desired results within a given target. Now you can see here I am talking about the target so this target can be to tell Facebook that I want this a lead, or sale within x amount, as well you can also tell Facebook I want X amount for every dollar which I will spend on Facebook. I hope you are understanding what I am trying to say. Let's dive into a little bit more details.
CPA
This bidding strategy tries to give an advertiser his/her desired result which may be a lead or sale within a fixed amount that he/she is willing to spend. For example, if you want a sale for $5 then you will use a CPA bidding strategy and your CPA amount will be $5. Now Facebook ad's machine learning algorithm will optimize itself for that particular bidding strategy and try to give desired results within that particular amount. You can use this bidding strategy for lead generation as well as e-commerce.
RAOS
In the RAOS bidding strategy Facebook ads algorithm tries to optimize itself in such a way that will give you a specific return on ad spend that you have specified. Let me make it simple for example you want to make 120 dollars for every 100 dollars spent, then you will choose 120% with ROAS. You can use this bidding strategy for an E-commerce business but keep in mind that you have to set up proper conversion tracking for e-commerce before using the RAOS bidding strategy. As we have discussed earlier the Facebook ads algorithm has words on data more accurate the data you feed to this machine the more accurate output you will get from these machines. Now how the Facebook machine algorithm will know how you will make per sale, definitely by setting up purchase value for products and services during conversion tracking. Here again, I want to mention that don’t forget to get to set up conversion tracking otherwise you will lose money. How you can get better results by feeding these machines wrong information. Again these machines work in data you feed them so always feed the with accurate data. So, am mentioning this again ad again because I want you to eat this information with your breakfast, lunch, and dinner so can remember this.
Bid Caping
Bid caping is a manual bidding strategy, other bidding strategies which we discussed above are automated bidding strategies, now if you don’t have any ideas about the difference between manual bidding strategy and automated bidding strategy then calm down we will discuss this at the end of this topic.
We were discussing bid capping, according to this bid strategy you specify a bid, now when your ad will go to auction it will compete with another advertiser on that specific bid that you have already set. Now if you have a good idea about how Facebook auction work, and what is average bid is in your market then you can go with that particular bidding strategy because in this case there will be a chance that you can win the bid and your ad will be shown to your target audience. However, if you are new and do not know how the action works and what can be the bid to win the auction, In short, you do not have any idea about your market. Then just do not use bid capping, this bidding strategy is for an advanced advertiser who has much data about their target market.
Now let's discuss manual bidding strategy and automated bidding strategy, so manual bidding strategy is a bidding strategy in which you specify the bid you want to pay to Facebook, however in automated bidding strategy, Facebook decides the most appropriate bid for your ad according to your budget, time duration, optimization goals, market competition, and all related information.
So, that was the difference between automated bidding strategy and manual bidding in Facebook ads.
In the end, I want to say that use a bidding strategy that meets your marketing goal. Generally either we do lead generation or E-commerce. So I would like to say go for the Highest Volume or CPA if you are using it for lead generation. Go for CPA, Highest Value, and ROAS if you are using it for e-commerce.
That was all from me and I am assuming that I have provided enough value to you from now there should be no doubt in choosing a bidding strategy.
If you still have any doubts then you can ask me anything related to that topic in a comment below or you can also DM me.
0 Comments