Bidding for Facebook ad space is fairly baffling because of its simplicity. Essentially, the highest bidder gets the ad space and the most impressions while lower bids either get fewer impressions or none at all if there isn’t space for their ads. Additionally, you only pay the lowest amount required to beat the next highest bid. Compare this to explaining AdWords bidding, which involves charts, math and coffee to stay awake during the lengthy explanation.
However, because nothing can be totally straightforward and simple in online advertising, there are several ways that you can bid depending on what your goals are.
Impression bidding is great if you’re really only interested in increasing awareness of your brand or a new product. However, just because you get lots of your ads to show up, it doesn’t mean that you’re going to get anything out of it. This type of bidding makes it very difficult to measure success, so unless you’ve got money to burn, I’d consider another advertising method.
This is the type of bidding that people are probably most comfortable with, and it used to be Facebook’s most popular type of bid. However, the downside of click based bidding is that any click – a like, a share or whatever – will end up costing you. You could get tons of clicks while still having few people visit the page you were advertising in the first place. Likes, reposts and visits to your profile page can all be beneficial, just keep in mind that they all count when determining your bids.
This is currently the most popular type of Facebook advertising, and I’m a bit surprised, although this is probably because I’m an untrusting curmudgeon. Essentially, you tell Facebook what you want people to do and pay per thousand impressions for them to do so. Click a link, like your post, visit your profile or whatever. Then Facebook uses algorithms (and magic, if you ask me) to figure out how and when to show your ads so that your goals are most likely to be met.
The combination of the incredibly high spend (AdEspresso recommends your daily budget be 5x your maximum bid) and the fact that you’re relying on an algorithm and Facebook to have your best interests at heart… I mean, you’re not only expecting to get particular activity, but activity from your target demographic. You can adjust your campaign accordingly for some of that, but it seems a stretch to me personally. However, it’s supposed to be very successful, so I could be a Doubting Thomas.
This type of bidding is essentially a different flavor of oCPM bidding. Instead of bidding per thousand impressions, you’re bidding based on how much you’re willing to pay for a certain action. The downside of this type of bidding is that it’s limited to the following actions: Mobile App installs, Page Likes, offer claims and link clicks.
For more information about Facebook bidding, check out this article from Ad Espresso.