What is Facebook's advertising bidding mechanism?

To understand the bidding mechanism first need to understand the total value of the ad 


01.Facebook Ad Auction Mechanism

 

Total ad value

Optimal advertising refers to theThe user experience of Facebook's social platform is the most valuable ad to an ad audience. The value of advertising to the audience needs to be measured from several angles, and Facebook's ad bidding system has introduced the concept of total ad value in the process of ad auction.

Ad bids, projected action rates, ad quality and relevanceit is the three main factors that affect the total value of advertising.

 

 

Ads with high ad quality and relevance can be shown at a lower price. Therefore, to improve the quality of advertising, looking for a highly relevant audience can reduce the unit price of advertising, thereby saving a lot of advertising costs.

- Ad optimization direction

As can be seen from the algorithm of total advertising value, the two main directions of advertising optimization are: to optimize the advertising experience to the maximum extent, and to maximize the search for high-value users.

Among the three factors that affect the total value of ad, ad bid, expected action rate representGet the most out of your high-value audience,Ad quality and relevance are representedOptimize your audience experience.

 

 

Facebook's ad bidding system is divided into three main sections:

1. How to bid

2. Bid amount

3. Charges

Every aspect of the bidding system will affect the final unit price and effect of the advertisement, and it is important to choose the right bid method, bid amount and charge method.

 

 

02.Facebook Ad Bid

 

Facebook supports both automatic and manual bids, including the highest and average bids. Advertisers can choose the right bid based on budget requirements and delivery expectations.

Highest bid

The highest bid method refers to the advertiser setting the maximum unit price of an ad.Facebook keeps ad bids below the set maximum unit price.

 

 

The case shows that automatic bidding can get more advertising results, and the highest bid method can make the ad unit price more controllable.

 

 

The highest bid way allows the system to bid no more than you set during the bidding process, making it easy for advertisers to control their advertising budgets. However, it may lose most of the high-value users, affecting the ultimate benefit of the ad, so not recommended in special cases.

Note: Special circumstances refer to the ad only pursue clicks or downloads, there is no need for subsequent conversions

- Average out

The average bid method is when advertisers set an average unit price for an ad.The Facebook system keeps ad bids around the set average unit price.

 

 

Compare with the highest bid:

Compared to the highest bid method,Facebook's bidding system doesn't have a clear price limit in the bidding process for your ad.

At average bids, the ad bid sits on the auction system may be higher thanOrBelow the unit price set by the advertiser, the average remains near the advertiser's set value.At the highest bid, the ad bid for the auction system will not be higher than the advertiser's set value.

Comparatively, it can be seen that the average bid does not cause the ad unit price is too high, nor will it lose a large number of high-value users because of the bid amount set by the advertiser.

So relatively speaking,When you want to control the unit price of your ad, we recommend that you choose the average bid method

 

 

 

03.Facebook Ad Charge Model

 

Facebook has developed a variety of advertising charges for different advertising goals, and advertisers can choose the right way to charge according to their needs to maximize the effectiveness of their ads.

1. Impression(CPM)

Charge by ad impressions

2. Link Click(CPC)

Charge-per-click

3. App Install(CPI)

Charges per installation volume

4. Action(CPA)

Charges per user behavior

  

The options available for different advertising targets vary.

Note: Not all accounts have all charges

 

 

04. How to flexibly play facebook ad bidding system

 Before your ad starts, you need to test your product with automatic bidding.There is some understanding of the effects of the launch on the Facebook platform.

Pre-ad delivery suggests using automatic bidding to run volumes, allowing ad groups to get through the learning phase quickly, and automatic bidding to quickly reach users with low unit prices.

 The unit price of an automated bid in the medium term starts to increase, exceeding expectations, and we recommend using average bids when you want some control over your ad unit price.

Bid amount do not take for granted, it is best to be lower than the previous automatic bid results80%。

For buy-to-let products, if there is no high requirement for late conversion of ads, you can try to use the highest bid, the ad unit price of a more stringent limit.

Advertising charges are generally recommended to choose to pay by display, so that their ads can be fully displayed.

 

When the audience targeting is very specific, such as remarketing of old customers, you can try to use click-to-charge ring per user behavior charge.

Accelerated delivery is not recommended in the absence of an urgent need for the number of ad results.

Automatic bidding can be used in the case of new games, short-term promotions, etc.The accelerated delivery feature allows ads to start quickly.