Facebook’s bidding strategies are a race against competing advertisers and it’s a common thing in our industry. The struggle here runs for attention to the ad and, as a result, for the target action. And those who were able to get the highest bids, go forward. Even when the bid is double that of the rival firm, Facebook will only accept the funds it needs to win. Let’s say you’re competing with others for a click, and your bid is $10, while your opponent has $3. Since your bid was much higher, you will win, but you will only have to pay $3.01, the smallest amount you need to win.

Facebook bids aren’t about betting or trading, but it’s worth talking about them in detail. So, let’s go!

Manual bids vs Auto bids

There are two main types of Facebook bidding strategies: automatic, which is controlled by Facebook, and manual, which is controlled by the advertiser. The first one has 2 more varieties.

1. Spend bids will focus you on spending your entire advertising budget for optimal results. This includes bidding with minimal costs and maximum value.

2. Bids on goals are needed for certain goals at the cost you fixed. This group can include bidding strategies with cost limits and minimal ROAS.

Facebook’s manual bidding is needed for optimal control over the bid, where a hard limit is set and Facebook no longer decides how much the bid costs.

The bidding strategy with minimum price and maximum quantity – lowest cost bidding

A fairly simple strategy that gives the greatest volume of conversions at a minimum cost. When you create ads, FB chooses this strategy randomly. It is certainly suitable for obvious noobs and just publishers looking for an easy setup of their campaign.

When you choose the lowest cost bidding strategy, Facebook will improve your campaign for the most conversions and will not consider the lowest cost. As a result, conversions can drop significantly in quality and CPA will increase. Facebook’s lowest-cost bidding strategy is a field where quantity prevails over quality. For affiliates with significant experience behind them, it is better to choose a different strategy.

Target cost

When you choose a bidding strategy where the cost is highest, the goal in this case will be to complete more bids in order to get the most value from conversions. For these purposes, FB uses AI training – it will make it clear in advance how much ROAS from the target audience the user will receive, using saved purchase records and engagement information. Further, the algorithm raises the bid specifically for those users who will provide a high cost per conversion.

The obvious disadvantage that this type of Facebook bidding strategy has is that it requires you to install a Facebook Pixel first. You must also have campaigns with conversion registration that differ in value. Facebook will use these indicators in combination with data about your target audience to understand what and how much to bet on.

What is the maximum bid on Facebook?

In a cost-per-result strategy, you can set a desired CPA that you would like to keep alive longer. Your spending limit is not a guarantee, but a goal. During the training phase, Facebook will try to optimize the campaign to get the best performance. This happens with CPA fluctuations as Facebook’s algorithm tries to find the best way to generate conversions at the optimal bid. If you want a campaign to run smoothly, Facebook’s bid cap needs to be realistic. Analyze your previous average CPAs across campaign objectives and set a modest CPA limit.

Such a bidding strategy gives results due to optimization for a regular target audience, it will gradually use itself up and further conversions at the previous price will not be possible, since there is a finite number of users to whom an advertisement can be shown. During that period, you will need to either set a higher limit, or update the audience and creatives in order to increase conversions.

Bid cap strategy

If you take a bid cap into your arsenal, know that it sets the maximum amount that you expect to pay for each trade, without exceeding this amount. This strategy will depend on what goal is actually achievable. If you set the limit too low, then your ad will have fewer impressions than it could have in the future, or even not be shown at all.

Facebook’s bid cap vs. cost cap

The strategies are similar, so it’s not always easy to tell them apart. In the case of the bid cap, you set a hard barrier. For example, if you set a bid cap in the region of $3, and the cost of winning a certain auction is $3.50, so you will certainly lose that auction.

The cost cap is inherently freer and suitable for someone who has fairly flexible CPA requirements. The bid takes into account the big picture, and not any one number in particular. A certain cost per individual conversion may be higher or lower than the set one, but the average CPA will be in the pool of average measurements.

ROAS goal  bid strategy

The minimum return on ad spend is used to determine the minimum return on your total budget. Let’s say your budget is $100 and you need to be sure that at least $150 will come back. After doing the calculations, we will see that the return should be 150%, which is equivalent to a ROAS ratio of 1.50. This strategy is similar to the cost cap bidding strategy.

With a minimum ROAS, you need to give specific instructions that you need at least a certain amount within the budget of your advertising campaign. The disadvantages of having a minimum ROAS are related to having more control over your bidding strategy. And so, if your goal turns out to be difficult to achieve, your ads in this case will receive fewer impressions or not receive them at all. The ROAS goal strategy is best suited for websites that have goals based on revenue, and if they have Pixel data and CPA targets in addition to that.

We asked an experienced affiliate to comment on the topic:

1) Ivan Merkulov, owner of the Carbon affiliate team

In the team, we use 2 strategies mixed up: auto-bid for the maximum number of leads and the cost cap.

On new offers for which we’ve found a great creative, you can set the cost cap just above the target CPA and get good numbers. Also, most often, such a strategy will save you from draining the budget, because Facebook will stop the promotion if it is not possible to receive leads at the specified price.

In cases when we have verified data on CTR, CR and approval, we often use automated bids.

In any case, you should not forget about automated rules.

Conclusion

Impressive creatives, a relevant target audience, and a smartly set budget are the first things to get hold of, but the bidding strategy on Facebook is an important and large piece of the puzzle that must be considered in order to achieve success.

Facebook is an almost bottomless well for heated debates and experiments, and therefore it can’t hurt to both look for the latest working strategies and repeat what has already been done.

And we wish you all great ad campaigns, fire creatives, and the best working bidding strategies!