How do you work with bids in the Facebook Ad Auction?

How do you work with bids in the Facebook Ad Auction?

Hi everyone! We at Webvork are always thinking about our content and so today we decided to tell you about bidding strategies, what these are, and what algorithms they are driven by.

The word “optimization” comes up a lot in our sphere, we often see it in niche articles, interviews, or group chats. But nobody explains what this word means, everyone just tells you to optimize your work. And, a rather inexperienced publisher may wonder how they can optimize their campaigns, regarding that their Facebook accounts are constantly getting banned.

Why are we talking about this? You see, the article is going to be about Facebook ad bidding, and these strategies are best applied when you have at least some campaigns going. This way, if none of your accounts can live for longer than 24 hours then there’s nothing to optimize, there’s no point to play around with bids on there, it just won’t work.

Accounts are the main thing in affiliate marketing right now and if you buy yours for less than $0.5 (100 rubles in the Russian market) and cannot get any outcome from it, then you won’t ever see good results if you keep investing in such cheap accounts. Try to purchase a couple of decent, more expensive accounts and, after they pass advertising restrictions (if they even get those), you will be pleased to see just how long they can last and how much they can bring you.

And so, the bidding strategies.

Before you set up your ad campaign, Facebook places an auto bid for you and then you have to decide whether or not you want to change it. Also, please note that bidding options aren’t a regular feature, they’re hidden. If you’re not very experienced in this area, then such Facebook terms as “minimum value” or “bid cap” can be strange to you, these require some time to puzzle out. Today, we’re going to tell you which bids are best for a variety of your goals and what the difference between them is. But let’s start from the very beginning.


A little bit about the auction

There are many advertisers and many Facebook users, so how can Facebook arrange its ads? Many years ago, wise people came up with auctions: those that can offer the most will receive the most. For a person to see your ad campaign, it needs to win an auction for a certain audience pool, so only then those people will get to see your ad. Facebook’s auction differs a lot from a regular auction but their core principles are the same.

The bid you place is the price you’ll pay to show your ad to one user (Facebook has its own algorithm). If you choose the automated bidding option, Facebook will manage your budget by itself, increasing or decreasing your bid depending on an audience pool, a day of the auction, or an auction itself.

For example, let’s say, there are 100 people that want to lose weight. And, there’s you and there’s another publisher, both of you launch weight loss offer campaigns and you place the highest cost per lead at $3, while your opponent bids $5. Out of those 100, 40 people want to get slimmer using weight loss supplements, and the other 60 are in search of a gym or a personal trainer and they don’t believe that supplements can work wonders. If all the leads were spread evenly among you two, you wouldn’t get the same audiences. We’ll get back to this example later when we talk about bidding strategies directly.

There are perfectly reasonable prices for each of these measures: CPM, CPL, CPC. In the month of December, these measures may increase in their price a lot because large companies tend to increase ad budgets to bring all their yearly budget plans to action. This is the time when Facebook ads cost more than usual.

You have to understand that however cruel Facebook is to your accounts and however often it bans them, it still wants to make money on you and wants you to spend yours for it. Just be aware that out of 10-20 accounts with active ads, 1 can be spending $2-3k, you just need to find it.

“If Facebook can do everything on its own, then why do we need other bidding strategies?”, you might ask. The thing is, you need to decide on your strategy according to your perspectives. To pick a strategy, you have to know what strategies there even are in the first place.

Your strategy often depends on the goals you set. You can drive traffic for clicks, redirections, traffic, and many other options. Please note that picking a bidding strategy doesn’t always depend on the supposed campaign goal. Affiliate experts need bidding strategies for the times when their CPA or CPL grows and so that they can implement a bid to later lower their CPA or CPL costs. Ok, and now, let’s move on to the bidding strategies.


Bidding strategies

Let’s start with bid caps, the highest bids. It’s the maximum price you can pay for your desired results. If you have a strict budget that you must follow, then this is the strategy for you. However, you might lose a lot of potential leads under very pleasant conditions this way.

Here’s an example: you have made your bid cap $2 and you see that your ad campaign is doing great. But, it could also be the other way around. Say, you’ve also placed your cap at $2 but then you only get 1 lead a day. There are simply no leads in the range of your budget, but there are plenty of them starting from $2.3. These leads would have made up for your spending but you just can’t get to them. This is how this strategy can be ineffective. So, if you aren’t getting results in 2-3 hours, you can increase your bid to 20-50 cents and wait for 2 more hours, after which you will start getting leads.

If you continue working with that $2 bid cap hoping that the auction refreshes tomorrow and you’ll get those leads that day, then just know that it’s not going to happen. This strategy can bring you traffic and conversions, but just make sure to track your campaign’s statistics.

And now, let’s talk about the lowest cost. Here, you’re setting the lowest cost for a target action. This strategy is super dynamic, it can both grow and go down. When choosing this strategy, Facebook will always be looking for a new audience for you, even after it’s already shown your ad to your target audience. It will look for another audience of lower quality even though it still meets your set conditions.

Remember that story about 100 people that want to lose weight? Divide these 100 people into 2 categories.

1st category – 40 people that believe in miracles and are interested in weight loss supplements;

2nd category – 60 people that don’t believe in miracles and prefer sports activities to supplements.

There are 2 publishers that work under this bidding strategy, one of them bids $3 and the second one - $5. You start working with the 1st category of your audience. Facebook can only give you 10 leads from this pool of people (after that audience will just be worn off). The publisher that can pay $5 will get 30 people from the 1st category, this is how Facebook will treat you two. And then, you’ll both be shown to the 2nd audience category but you’ll get to those people earlier. This way, you’ll get the lower quality audience before the other publisher and you’ll pay $3.

As a result, you (the $3 publisher) will get to show to 10 people from the 1st category and 40 from the second. And, the $5 publisher will get 30 people from the first category and 20 from the second. That publisher will get a higher approval rate and a higher CR, their ad campaign will bring them more income.

You need to understand that this strategy is only good for when you have close to no competitors in your area. And, if you work with a popular affiliate vertical, you won’t get the profit and your leads will get trashed.

And, the third bidding strategy, the cost cap.

It’s pretty simple. You just set a cost you’re most comfortable with, the most reasonable amount you can estimate for that campaign. Facebook will look for leads according to your set cost. But, if it can’t find them, it will automatically increase your cost until it finds your audience. However, it can only increase it by 10%. Facebook can also decrease your cost if your set cost is higher than the auction cost, it can decrease it to any degree.

This is one of the best strategies, since a 10% addition is alright, it’s bearable, but a cost decrease to any degree is very useful and it can even provide you a 400% ROI.

There used to be another strategy called target cost, it allowed Facebook to either increase or decrease your cost by 10%. They gave this one up because Facebook found it ineffective.


Manual vs automated bidding

After you determine which strategy you want to use, you also need to learn how to pick your bidding costs.

If you don’t have too much experience, you better trust Facebook to pick your bids and just track if those are alright with you. To place bids on your own, you have to have some experience because without it you can’t know what CPM or CPL rates are even acceptable for your offer.

As soon as you gain enough experience, you can play around with your bids as you like. Manual bidding can bring you very respectable leads under great costs or it can spend your whole budget. You need to understand that the more often you change your strategy and your bid costs, the harder it is for Facebook to understand what you want and the longer you will remain lead-less.



Now you know everything about Facebook’s bidding strategies, how their auction works and can apply this knowledge to practice. And remember, in order not to get confused by affiliate marketing before you even start (because of the fact that accounts get banned right and left), make sure you use trustworthy accounts, they will help you get practice out of your theoretical knowledge. Drive traffic from Europe and do so with Webvork, good luck everyone!


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