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Harnessing The Power of Facebook Ads – Part Three: Understanding the Basics Conclusion

1 week ago

Advertising

Hopefully you will have been following Part one and Part two of the three-part Harnessing The Power of Facebook Ads series. If not, it is recommended that you have a read through to catch up. For a quick reminder, we’ve covered the basic structure of Facebook ad campaigns, building your audience, schedules and ad placement. In this concluding piece of the introductory series, we’ll be looking at bids. From experience, auctions & bidding are often misunderstood concepts which lead to advertisers and sometimes their competition paying a lot more in per-click ads than they need to.

This article will aim to provide a basic overview of how the auction and bidding procedure works. It is important to note that Facebook makes regular tweaks to the algorithms so it’s a good idea to regularly check the relative support sites once in a while. A positive element to understanding the basics of bidding is that platforms like Facebook, Google and Bing have similar methods of auctioning so your knowledge can be transferred with a little reading up.

Achieving the Happy-Medium

As an advertiser, your purpose is to reach your target-audience and Facebook has to support you in your objective. Facebook must make it valuable for your business, otherwise chances are you won’t return. They do this by helping you reach your target audience. On the other hand, Facebook also has a responsibility towards its users and needs to ensure a safe, and unobtrusive ads policy.

To enable the platform to keep both parties happy, Facebook uses an auction system. Traditionally auctions are won by the highest bidder, and this is where the confusion often lies. People will put their bids as high as possible to ‘out-bid’ the competition, not realising that bids on Facebook and other platforms are won on ‘value’.

What Helps to Win the Auction?

(a) Advertiser Bid

As mentioned previously, Automatic and Manual bids are the two types of bids you can choose when creating an ad. For the first element, Facebook checks which type of bid you have. In most cases this will be automatic, so it then calculates based on your budget and schedule to help you get the most out of the result.

With Manual bids a similar process is deployed, but this time as you are setting your bid yourself, it takes in to account the max amount you are prepared to spend. As a note of caution, if you are looking to put a manual bid in, please ensure it is at least the minimum amount Facebook has suggested otherwise you risk your ads not running or having a very low reach.

(b) Ad Quality & Relevance

Facebook works on perception and assumption. They have to assume the user will find your ad relevant which is based on the quality of your ad. Facebook will also look at if you have any negative reviews alongside your relevance score for the ad. Your chances improve vastly if you have a high relevance score so focusing on this is key.

Some ways to ensure a high relevance are:

– Ensure your targeting is specific as discussed under ‘Target Audience’ in part one
– Think about the message and image you are posting and how this will be interpreted by your target audience
– Update your ad from time-to-time
– Try a few different ads and see what works
– Do not use misleading info, it will only encourage clicks which cost you but you will end up losing a potential customer!

(c) Estimated Action Rates (EAR)

Hopefully by now, you will have seen how each element comes together and is inter-linked with everything else on Facebook ads. By ensuring each step is followed according to the best-practices, you enable a solid foundation for your campaign. If you recall at the very beginning, when setting up an ad, we covered the objective of the ad. EAR measures how likely a person is to take the actions required to get you to the objective you have set.

Lets take an example where you are running a campaign to sell shirts. Liking shirts or following trends doesn’t equate to someone willing to buy. In EAR, Facebook identifies those customers who are more likely to complete a purchase of a shirt. When the auction is run, Facebook increases the value of the shirt ads that are looking for conversions. If another advertiser was looking for likes on their page, your ad would have a better value and EAR. Ultimately, if you are selling a shirt and Facebook believes someone is buying, their job is to link you to the user. Please note, estimates are based on previous user habits and your ad’s performance, so a good all-round ad is always the best way to go.

Conclusion

We hope you’ve enjoyed our introductory series on harnessing the power of Facebook Ads and it brings value to your business. Hopefully it will be enough for you to go and start testing your skills and audience. Keep an eye out for further series/posts similar to this one.

The author is a UK based LLB Graduate. Currently running a Web development agency, has a keen interest in Web Technologies, business models and politics. Waqar can be reached on twitter handle @waqardm

PakWired.com is all about business, technology, and the startup culture in Pakistan. If you have an interest in e-commerce, telecommunications, or general business and technological advancements, you’ll love PakWired.

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