Facebook Bidding Strategies for Beginners

Facebook Ad Spend KPIs

Amount Spent: The estimated total amount of money you've spent on your campaign, ad set, or ad during its schedule.

Budget: The maximum amount you're willing to spend on your ad sets or campaigns, on average each day or over the lifetime of your scheduled ad sets or campaigns.

Buying Type: The method by which you pay for and target ads in your campaigns: through dynamic auction bidding, fixed-price bidding, or reach and frequency buying. This field is currently only visible at the campaign level.

Campaign Spending Limit: The spending limit used to stop an ad campaign from going over the set limit.

Cost Per Add to Cart: The average cost of each add-to-cart.

Cost Per Checkout Initiated: The average cost of each checkout initiated.

Cost Per Click (CPC): The average cost for each link click.

Cost Per Content View: The average cost of each content view.

Cost Per Registration Completed: The average cost of each registration completed.

Cost Per Result: The average cost per result from your ads.

Cost Per Thousand Impressions (CPM): The average cost for 1,000 impressions.

Cost Per Thousand People Reached: The average cost to reach 1,000 people.

Cost Per Unique Click: The average cost for each unique click.

For more Facebook terms and definitions, check out this article!

Facebook Bidding Strategies

The Lowest Cost (Auto-Bid)

This strategy allows bidding to be fully managed by Facebook. It’s widely used by beginners because there isn’t much need to fully understand the intricacies of the bidding systems and options. This bidding strategy will use your entire budget and will focus on achieving the lowest cost opportunities. Unless you have super specific budget goals in mind, this is your best bet for a Facebook bidding strategy!

Compatible with the following campaign objectives: Brand awareness, reach, traffic, engagement (post engagement, page likes, event response), app installs, video views, lead generation, messages (excludes sponsored messages), conversions, and catalog sales.

Bid Cap

Bid cap bidding strategies require a more hands-on approach than auto-bid strategies because they are managed by the advertiser, not by Facebook. This strategy requires that you set a specific bid you want to target and it will fire your ads accordingly to maximize the volume at that specific bid. Essentially, you are controlling your bid in each individual auction. It can help you be competitive against other advertisers targeting the same audience, but it can be a very tedious process that requires a lot of manual data reporting since your actual costs may differ from your target bid.

Compatible with the following campaign objectives: Reach, traffic, engagement (post engagement, page likes, event response), app installs (installs, events, link clicks, video views), video views, lead generation, messages, conversions, and catalog sales.

Cost Cap

This is another Facebook managed bidding strategy. It allows you to keep your overall costs within a specified limit. Rather than having to manually adjust your bids (as with the bid cap strategy), Facebook will automatically do this for you to maximize the volume within your target CPA or CPI.

Compatible with the following campaign objectives: Traffic, app installs, event responses, lead generation, offsite conversions, and catalog sales with the following ad delivery optimizations: landing page views, link clicks, page likes, post engagement, replies, video views, and catalog sales with link click offsite conversions.

Target Cost

Though you may set a specific bid, your actual costs will fluctuate. Using target cost Facebook bidding strategies can help mitigate that by focusing on the actual target cost you want to achieve. There’s more cost predictability with this bidding strategy as it will optimize your ad delivery to target the most possible conversions at the specified cost.

Compatible with the following campaign objectives: Traffic, app installs (installs, app events, video views), lead gen, conversions, and catalog sales.

Value Optimization with Minimum ROAS

This bidding strategy requires reliable communication between Facebook and your website or other platforms regarding conversion values. The value optimization strategy is used when your conversion values are clear and your highest priority is achieving a return on ad spend. Of course, many advertisers will have lofty goals for their ROAS, but if you set your target too high, you’ll end up seeing under-delivery while using this bidding strategy.

Compatible with the following campaign objectives: App installs, conversions, and catalog sales.

Highest Value

Similar to value optimization, the highest value bidding strategy is meant to drive the maximum return on ad spend. This can be used if you’re not sure of your minimum ROAS or bid amount. This bidding strategy is Facebook managed for a more hands-off approach and will almost certainly spend your full budget. Again, this bidding strategy can only be effective if there are clear and accurate conversion values set. 

Compatible with the following campaign objectives: App installs, conversions, and catalog sales.

Optimization for Ad Delivery

The optimization & spending controls section of your Facebook ads set-up process allows you to confirm exactly what results you’re trying to drive and what your limit is in terms of spend. The options available here will be dependent on which campaign objectives and Facebook bidding strategies you’ve selected.

Your selection for optimization for ad delivery affects who Facebook shows your ads to. Based on your other selections, Facebook will automatically recommend the ad delivery strategy that will help you best reach your goals.

For example, If you select optimize for link clicks, your ads will be shown to the people who are most likely to click the link. If you optimize for impressions, your ads will be shown to people as many times as possible. Whichever option you choose, Facebook will optimize ad delivery to maximize your results within your given budget.