With annual revenues in excess of $8 billion (Nasdaq, 2018), clearly more and more marketers are choosing to invest their budgets in Facebook advertising. The setup of your Facebook campaign is crucially important to delivering the best ROAS possible. One major consideration of a Facebook campaign setup is the bid model you choose. These bidding models are discretely hidden away but they can have a real impact on your campaign! Facebook doesn’t really provide any guidance on these options so here are my thoughts on the subject.
First of all, let me explain what a bid model is. Facebook’s advertising platform is based on an auction model where advertisers bid what they are willing to pay for their ads to be shown to their target audience. An advertiser’s bid and a metric called “relevancy score” (how relevant Facebook deems your ad to be to a user – if you want to read more Facebook explain exactly what this is here) is then used to decide which advertiser’s ad will be shown to a user. A bid model is how advertisers choose to bid and determines when they pay for their ad being displayed.
So now we have defined what a bid model is, let’s review the options Facebook offers us. I’ve created the below guide which outlines the various options available:
To complicate things further you can choose what the Facebook Pixel optimises towards, e.g. the “bid strategy”. I will write a separate guide on this in the future as there are even more options you can choose which will have a huge impact on your campaign’s results!
To recap there are 4 bid model options to choose from. The model you choose will entirely depend on your campaign’s goals. You should try each model and test for which one delivers the best results for your campaign.
Hopefully this article has been of use to you and thanks for reading it! If you’d like to discuss anything to do with Facebook advertising and how to get the most out of it, then please feel free to get in touch.