new bidding on Facebook

Facebook Introduces Average Bidding

Advertising through the social networking medium of Facebook can be a great way to reach your target audience. You want to ensure, however, that your advertising is optimised for conversions, and that you get the best results for your desired spend rate.

Facebook offer a few different ways of setting up your ad set, depending on what your desired outcomes are. As shown in the attachment, you can choose an automatic bid amount or a manual target bid.

An automatic bid amount allows Facebook to set the bid, helping to give you the most results for the best price. You can simply choose ‘automatic’, and leave Facebook to do the rest.

However, if you’d prefer to manually set your target cost, you can choose further between average cost bidding and maximum cost bidding, allowing you to tailor the advertising specifically to your desired budget.

Let’s take a quick look at both these options to better understand what’s involved.

average bidding facebook

Average Cost Bidding – this means that you get to choose an average cost per bid say, $10.00, with an overall budget of say, $50.00. Facebook will then try to achieve as many results as possible for the overall average cost per result. Some may be lower than your set bid cost, some may be higher.  As you accumulate more results, the average cost should even out, and may actually end up coming in at less than your set bid cost.

This type of bid cost setting allows Facebook a little moving room in terms of ad placement, nabbing results which might otherwise have been excluded due to being higher than the set bid rate. In this scenario, you may receive six results for a total cost of $48.00, making the average bid rate being around $8.00 per bid (you’ll notice it comes in below your set bid rate of $10.00 per bid)

Your total budget is kept in mind, as well as your desired average cost.

Maximum Cost Bidding – this means you set the maximum cost for each individual bid. Facebook consequently has less room for movement as it is bound by the fixed cost per bid. Bids that are even just slightly over will be excluded – only those that are equal or lesser than your set bid cost will be shown. Facebook will still try and get you as many results as possible at your set bid cost, but for a similar budget, say again, $50.00, with a maximum bid amount of $10.00 per bid, you are likely to receive less results over the same time period.

Using the same scenario, you may receive four results, differing in individual cost (but no higher than your set bid rate of $10.00), for a total of say, $24.00, or an average of $6.00 each.

Setting maximum cost bids means the ad will need to run over long period to achieve the same results as the average cost bid results. You may find, however, that using maximum cost bids gives you a better average bid cost in the end.

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