Do you know Ad bidding plays a huge role in a Facebook ad strategy? It's important to have a good ad bidding approach for a successful ad campaign. Without this strategy, you could lose your money even when the audience targeting and ad copy are on point.

You might also only pay a little for ads or conversions if you use the right bidding strategy. This happens because the ads don't get delivered due to the low bidding.

To ensure you don't face such situations, we have mentioned how to choose the correct bidding strategy for your Facebook Ads.

Let's get right into it!

Facebook Ad Bidding: How Does it Work?

The ad bidding system of Facebook is like an "auction". Here, all the advertisers place bids on their ads, which will get placed in different ad placement locations on the platform.

Normally, the highest bid always receives the most ad placements, but remember, the size of the bid is not just the only factor for the ad delivery.

This is exactly what makes Facebook's entire bidding system pretty different and unique compared to other auction advertising systems.

Facebook's auction system was created to balance the needs of users and advertisers by allowing advertisers to make money and deliver relevant content to all users.

Factors That Influence the Facebook Ad Delivery

You will be amazed to know that some important factors have a massive impact on Facebook ad delivery.

The Bid

This stands out as the amount that advertisers will pay to win the bid. The platform's system is created to enable advertisers like yourself to pay the lowest amount possible, which can still win you a bid. Here is a small example to have a proper understanding:

"When your competitor is the highest bidder and they have set the maximum bid to $1, you can set your bid to $1.5. You will just need $1.01 to win a bid and not the entire $1.5."

Estimated Action Rates

This is the "behind the scenes" factor of the platform's ad delivery system. When the system estimates that your Facebook ad will get more action, it will give your ad more priority than the other Facebook ads.

Relevance Score

The relevance score of a Facebook Ad is decided by taking into account the positive exchanges that the users have with the ad, like clicking, commenting and liking. To Facebook, an ad's relevance score is extremely important.

When your Facebook ad has a higher relevance score, it will allow users to spend more time on the platform.

Choosing the Best Facebook Bidding Strategy: Steps to Follow

When planning to use the bidding system on Facebook, you must find and use the correct approach. In this section, you will come across certain steps that will help you pick the correct ad bidding strategy on the platform:

Have a Good Understand the Goals

To find the perfect bidding strategy for your Facebook ads, you need to understand your goals. When you wish to increase brand awareness, you should consider the Cost Per Mille (CPM) bidding, where you will pay for every 1000 impressions.

If you want to drive in traffic for engagement or to your business's website, you can opt for Cost Per Click (CPC). Apart from that, if you want people to take certain actions, such as signing up or purchasing an item, you can use Cost Per Action or Optimized Cost Per Click bidding.

Know the Audience Well

You will find bidding strategies that work perfectly with certain audience sections. For instance: "When you're planning to target a much wider audience, you should use Optimized Cost Per Mille. But for a highly-targeted audience, Optimized Cost Per Click will be an excellent option for you".

Consider the Competition and Budget

You may have to use a much more aggressive bidding approach, such as CPA or CPM when the competition is high. This will ensure that all your Facebook ads are shown.

If you have a small budget, you can go for oCPC or CPC, as it will let you control the cost because you're just paying for the clicks instead of impressions.

Measure and Test

You can run the A/B tests for various ad bidding approaches to find out which strategy is performing well for your specific ad campaign.

It's also important to check all the metrics, such as "Cost Per Result", "Conversion Rate", and "Click Through Rate", to measure the performance perfectly.

The Various Types of Facebook Bidding Strategies

By now, you're well aware of what ad bidding strategies on Facebook are and how they work. Are there several kinds of bidding strategies available? Yes, you heard it right!

There are many types of bidding strategies that you can opt for, and we have mentioned some of the important ones in this section:

Bid Cap with a Low Cost

This bidding strategy will let you set up the bid cap and prevent Facebook from bidding an amount that is much higher than the amount you set as the bid cap.

Using this strategy will ensure that you're not bidding a higher amount than what you earn through each conversion.

But when you set a low bid cap, the platform will have issues spending your whole ad budget. It's suggested that you examine all your past ad campaigns and use the average CPR (Cost Per Result) as the bid cap. For the daily budget, Facebook's recommendations are set to be around 5 times higher than your bid cap.

Highest Volume

With a high-volume bidding strategy, the platform will try to achieve the best results, which your ad budget can easily afford. 

This is also known as the "default bidding strategy", and you can use it when your goal is engagement metrics, which are pretty inappropriate to your income.

High-volume strategy is also ideal for advertisers who do not have a specific "Cost Per Action" (CPA) goal. You can also use this strategy to use your full budget easily.

Target Cost

This bidding strategy will help you maintain the average CPC (Cost Per Conversion). When using the target cost approach, Facebook can bid below or above the amount you set up as the target cost.

But the platform will also try to keep the average cost around the amount of the target cost number. You can use this approach when you want to obtain plenty of conversions.

This strategy is also a great option for scaling the ad campaigns because it will let you limit the average CPC so that you can easily increase the ad campaign budget.

Summing Up

When you want to run successful ad campaigns on Facebook, you must have a good understanding of the platform's bidding system.

To choose the correct bidding strategy, you should understand your audience, check out the various types of bidding approaches, and test and measure them.

By following all these pointers, you will be guaranteed to find a bidding strategy that will help you get the best outcomes from your Facebook ad campaigns.