How To Skyrocket Returns On Your Facebook Ads — The 3 Bid Strategies You Need To Know
Bid strategy, bid caps and delivery type. All you need to know to make the right choice.
When given the choice, you’d probably choose to automate your processes. Most of us will. But less work doesn’t always mean “better.” Sometimes you want more control — in which case keeping it manual is best. And that’s the case with the Facebook Ads bidding system.
Quick Facts About Facebook Ads Bidding
- Bid higher. Outbid your competitors and your ads will be seen more — all else being equal. Bidding higher usually get you more views — and you’ll always pay just a penny more than your competitor. So if their bid is $0.50, you’ll pay $0.51; even if your bid is $1.00.
- Estimated action rates. This is how likely the person seeing your ad will take the action you want them to. Facebook tries to show your ads to those most likely to bite. So if you’re advertising for sign ups, they’ll try to show your ads to people who have signed up for similar things in the past.
- User value. This is how valuable your ad is to readers. It’s calculated mostly through your relevance score. For example, how much engagement is your ad getting? How many clicks and likes? How many saves and hides? — All these things are taken into account when calculating your user value.
In essence, you’re bidding against everyone who wants to market something to your audiences. So to get out on top, you have to know what you’re doing. So…
What is Manual Bidding?
You can go with Facebook’s automatic settings, or you can take over control. There are a few options you can use to optimize your ads. Like bid strategy, bid caps and delivery type. These options, pictured below, are how you set up your manual bidding strategy.
Manual bidding isn’t necessary. But it gives you more control over what you’re willing to spend — and on what. It allows you to be more strategic, and better control your costs.
Manual bidding lets you customize the following:
- How much you want to spend
- What results you want to pay for
- Whether or not you want to set a bid cap
However, it’s not advised to use manual bidding if you aren’t super comfortable with Facebook ads. You’ve got to know what the different options mean — and their implications — before you dive in.
How to Place Manual Bids on Facebook
You can adjust your bid and your bidding strategy in the “Budget and Scheduling” section in the ad set creation of Facebook Ads. Keep in mind your bidding options may be restricted by the type of campaign you’re running. You can’t, for example, optimize for conversions when you’re running a Traffic campaign. Since this limits options otherwise available to you.
Most of the time you’ll choose between clicks and impressions. Here you’re charged for every click, or every 1000 views of your ad.
Both the lower cost bid strategy and the target cost bid strategy automatically use standard delivery (shown below), but they have slightly different pacing.
The lower cost bid strategy option uses “discount” pacing. Which means your budget will be spent to get the most results for the lowest price possible. And it will do so as evenly throughout the ad’s lifetime as possible. So your bid may be lowered slightly to keep ad spend in check. So you may lose out on some placements because of the lowered bid.
In other words, you’ll sacrifice some speed of delivery for cost efficiency.
The target cost strategy uses “probabilistic” pacing. Meaning it will distribute your ad spend on stable cost-per-result opportunities. So if you increase or decrease your budget — or ad spend — the cost-per-result should largely remain the same. If you’re looking to scale your campaigns quickly, this could be a good option for you.
The lower cost with bid cap strategy is the only one of the three that uses accelerated delivery.
Manual Bid Strategies
Lowest cost
Without adding a bid cap, the lowest cost strategy (which is typically Facebook’s default choice) is basically automatic bidding. It’s a good way to ensure that your full budget is spent, but it sacrifices your control. If you don’t know how much to bid, this is the option to choose. Facebook can tackle that for you.
Target cost
This option does not minimize your cost-per-click (CPC), which can make your campaigns cost more than they need to. This is for you if you know what you can afford to spend and want to keep it at a very specific cost. Most of the time, this will let you know what to expect when you decide to scale your campaigns. The target cost bidding strategy may not use your full budget, but it can be more expensive per click or per 1000 views than other options.
Lowest cost with bid cap
This option gives you the most control, and helps you to keep your costs as low as possible. It allows you to set a bid cap, which is the maximum amount you’ll pay for a single result.
How to Use Manual Bidding to Stay Ahead of the Competition
When used correctly, manual bidding helps you to stay ahead of the competition, beating them out and winning over the customers before they can. Here’s how…
Use Manual Bidding to Keep Adspend Optimized
Manual bidding gives you full cost control over your ads. So you’re distributing your ad spend as efficiently as possible. Your likelihood of profiting increases significantly as a result of this. If you’re able to get more bang for your buck, you’ll have more ad spend to go around. And that’ll get you more results in the long run for your budget. So you’ll have a powerful advantage over your competitors who are not using this option.
Control your budget carefully and you’ll be able to push more ad spend to your best performing or most important campaigns. Long-term, this will help you get the results you want.
Use It Strategically to Scale Ad Campaigns
Most businesses want to scale their ad campaigns over time. Just as they’d like to scale the business itself. Ideally, scaling would mean more ad distributions at a consistent rate of conversions — and a stable CPC. But this can be difficult to achieve in reality. If you scale your ads too quickly and without focusing on cost-control, your costs can skyrocket and you’ll lose your return on investment (ROI) in no time.
But if you use manual bids with either the target cost strategy or by setting a bid cap, you’ll be able to prevent this from happening. At the same time, you’ll allow your ads to scale more efficiently.
Be Willing to Outbid During Peak Seasons
The bidding system, true to its nature, fluctuates. When more advertisers enter the market or start increasing their total ad spend, bid prices go up. There’s only so many spaces in users’ feeds to fill, after all.
If you want to get some of those crucial Black Friday, holiday, and Valentine’s Day clicks, for example, you have to outbid the competition. Calculate what you can afford and ramp up your bids and your ad spend just before the peak seasons set in.
- When should I use lowest cost, and when should I set a bid cap?
If your goal is to maximize profit and get leads at a low cost, choose the lowest cost strategy.
- When should I use the target cost strategy?
If you want to maximize delivery and get as many conversions as possible, target cost is the way to go. Just keep in mind that these conversions may cost a little more.
How do I Set a Bid Cap Correctly?
It’s recommended (by Facebook) that you use an average cost per result from past campaigns as a starting point. Also think about the maximum that you can pay for an item while still making a profit.
It’s also recommended to set a daily budget that’s five times higher than your bid cap or more. This is because Facebook needs at least 50 events (the learning phase) within a week to properly optimize.
After completing the learning phase, you may decide to raise the bid cap if you’re having a difficult time getting the distribution that you want.
Whether you set a bid cap depends mostly on the results you’re seeing. Facebook doesn’t know the value of an event to your business. If you need to prevent Facebook from overspending for an event, this gives you control. At the same time, you may want to set a higher bid cap to increase distribution on a high-value event.
Automate your “Lowest cost with bid cap” strategy with the right tools
They say a poor craftsman blames his tools. But the fact is, the right tools make your life so much easier. You wouldn’t cut steel wire with a pair of paper scissors, right?
There are so many tools out there that help you automate large parts of your Facebook strategy. But there’s one tool that stands out — for reasons we’ll cover below.
Leadza
When you start working with Leadza, it’s clear to see they want to make the manual process more accessible to a wider market. You can get up and running in three minutes. And they call their platform a ‘1-click’ solution. Cutting out the steep learning curve that comes with a lot of other softwares out there.
Leadza automatically grades all of your ad sets and identifies statistically significant performance options for each one. While knowing which ad sets have enough analytics available to be tested accurately. Ad sets marked with the highest grades are copied to 10 new ad sets with different manual bid levels which are tested over 10–14 days. Using data science, the max bids are soon found — that cut your cost per action and boost Return on ad spend (ROAS). All the ad sets inside your bid tests compete with each other. During these tests Leadza kills the losers and scales the winners. The system then finds a winning bid and lets your top performing ad sets take center stage.
Unlike other bid testing tools, you do not need to mark ad sets manually in your Ads Manager or deal with complicated dashboards. All you need is to open your Facebook Messenger and apply the 1-click bid testing suggestions.
If you have at least $3K monthly ad spend, Leadza Automated Bid testing is the right investment and an incredible opportunity to scale campaign performance with 1-click implementable suggestions.
A few quick benefits of Leadza are:
- You save time on any manual work with Ads Manager/ 3rd party dashboard
- You can run bid tests/allocate budgets in seconds by applying 1-click automated suggestions
- They’re very affordable
- You take full control of your ads. You’re notified when something needs attention.
Features In Comparison
Bid Testing Done Right Can Rake In The $ For You
With everything said and done, your Facebook strategy can make the difference between $1000 a month in profits, and $10 000. $100 000 and $1m. Facebook is a powerful advertising platform with arguably the widest reach of all online platforms (around 2 billion users). But like any other method of advertising, you need to know what you’re doing.
And the right tools can emulate this knowledge for you. And get you those returns without having to spend thousands of $ on courses and failed tests.
That’s why we’re drawn to Leadza. It’s simple, efficient and affordable. And it does the job of optimizing your bidding strategy, so you can focus on the more important tasks.
