It’s no surprise that Facebook advertising has become a trusted marketing channel for businesses across the globe. If you’re not advertising on Facebook, you’re literally missing out on the golden opportunity to grow your business and boost overall revenue. The data shows that around 2.7 billion people use Facebook each month to reach out to their friends and discover things, making Facebook an excellent platform to drive more customers and build lasting relationships.
Now, the question is how to use Facebook for your business marketing? It’s Simple. Invest in Facebook ads.
Facebook ads are designed to engage more and more people and encourage them to act. Basically, Facebook ads offer flexibility, work across different devices, and help investors meet their business goals. So, how to get started? Well, no worries!
This post covers a few essential points you need to know about Facebook advertising, such as Facebook advertising cost, Facebook ads budget, and Facebook bidding strategies, to make a compelling Facebook advertising campaign. Let’s take a closer look to dive into the details.
Facebook Advertising Basics
Facebook advertising is a platform that enables advertisers like you to reach out to potential customers with relevant ads. But the challenge is that creating an effective Facebook marketing strategy isn’t a cakewalk. You need to consider several aspects, like your target audience, Facebook ads budget, Facebook ads cost, Cost Per Click (CPC), Cost Per 1,000 Impressions (CPM), and more, to establish a compelling marketing ad strategy.
What is the Average Conversion Rate for Facebook Ads?
The average conversion rate for Facebook ads varies depending on several factors, such as your industry type and campaign goals. According to Instapage, the average conversion rate for Facebook ads lies between 9% to 10%.
Why Facebook Advertising Bid Strategy?
As you may know, the advertising delivery system of Facebook depends on bids. Businesses or advertisers compete to display their ads to the target audience by specifying a maximum bidding amount to get that space. The more they pay, the more likely they will outcompete everyone else in the competition and get their ads in front of the audience. But spending money on Facebook ads without having an appropriate ad strategy is a complete waste.
To create a compelling ad campaign for your company and make the most of your money and time, you first need to know about the Facebook ads bidding strategies.
Types of Facebook Ads Bidding Strategies
Your Facebook ad bidding strategy tells you how to bid for your business in ad auctions. An appropriate bid strategy provides measurable results, including increased customers, brand reach, and sales rate. Here are the top bidding strategies you can consider following depending on your business type and goals. Let’s take a look:
- The Lowest Cost (Auto Bid)
The Lowest Cost strategy enables bidding to be managed by Facebook. Since the method is relatively user-friendly with simple bidding options and systems, this strategy is widely used by beginners. The lowest cost strategy uses the entire budget of advertisers and focuses on achieving the lowest cost opportunities.
Overall, the lowest cost is an attractive Facebook bidding strategy if you are looking to scale your business and prioritise growth over acquisition costs.
- The Lowest Cost with Bid Cap (Manual)
The bid cap strategy requires a more hands-on approach than the lowest cost strategy as it is managed by businesses or advertisers themselves, not Facebook. Under this method, you need to set a fixed bidding amount that you want to target, and it will display your ads wisely to increase the volume at that particular bid.
Most importantly, you get access to control your bids in every individual auction. But at the same time, the process is quite tedious as it requires a lot of manual data reporting since the actual Facebook ads cost may differ from the target bid.
- Target Cost
The target cost bidding strategy is probably the most sophisticated among other Facebook ads strategies. At least, it requires you to be clear about your business objectives. The first step in this bidding method is to pick an action or event that Facebook can measure, for example, leads, catalogue sales, or website conversions. Then, you (advertisers) need to set the average cost per result (this is different from setting a cap) you are willing to pay for that specific event.
Instead of not being allowed to exceed the bid than the cap, having a fixed average cost per result enables Facebook to deliver more on advertisers’ behalf. It clearly shows that the goal of the target cost ad strategy is to provide users with more control on how to spend their marketing capital. But you also need to have a proper understanding of bidding situations to make the most. For instance, what you’re aiming to accomplish, the worth of each result, etc.
One significant perk of the target cost strategy is that when you increase your Facebook ads budget, it will aim to maintain your specific bid accordingly. However, in the long run, you may find it difficult to spend your whole budget so you should pick this bidding strategy if you prioritise maintaining acquisition costs within a specific limit over generating a high number of results (or conversions).
The learning phase is a process through which the delivery systems learn about your ads and find the best place and people to promote your ads to, that benefits your business.
The performance during this period is not up to the mark and the average cost per action tends to be high or unstable. This phase continues until performance stabilises which usually happens after 50 optimization events per week.
There are several practises to ensure ad sets exit the learning phase as quickly as possible:
- Avoid making unnecessary edits to your ad sets. It will result in a reset of learning and delay the delivery system’s ability to optimise. Edits should be made only if doing so will improve performance.
- A complex account structure with multiple campaigns, ad sets and ads can compromise the learning phase as well as reduce ad delivery. A simpler account structure ensures better performance overall.
- Setting appropriate bids and budget is important. Make sure you have enough budget available to drive a minimum of 50 optimization events per week. A small budget will interfere with the process and make it difficult to exit the learning phase within a reasonable time.
Choose the Right Facebook ads Bid Strategy for Your Business
As mentioned, each Facebook ad strategy is different and comes with its own pros and cons. The right Facebook ads bid strategy for your business depends on your Facebook ads budget, campaign objectives, timeframe, and how you measure performance and success. However, you must consider using different bidding methods for different Facebook campaigns.
It’s a good idea to get to know simple strategies first, like Lowest Cost, before experimenting with advanced ones in order to familiarise with the Facebook Ads platform and create successful ad campaigns in the future.
Got any questions about Facebook advertising? Feel free to get in touch with us below to discuss your needs.