Most Meta advertisers know that an auctionFacebook uses an ad auction to determine the best ad to show to a person at a given point in time. The winner of the auction is the ad with the highest total value, based on bid, estimated action rates, and ad quality. More drives ad delivery, but do you know how this works? While a typical auction rewards the highest bidder, the Meta ad auction is slightly different.
Bids still contribute, but Meta is also trying to show ads to users who are likely to perform your goal action. Relevance and user experience are part of the equation. If only bids mattered, the ads users see would be far less relevant.
There are three important factors.
1. The Bid
Yes, the bid still matters. This is how much the advertiser is willing to pay to get their desired action or impression.
Bids are usually set automatically by Meta in the background. By default, Meta is bidding what it takes to get you the highest volume of goal actions within your budgetA budget is an amount you're willing to spend on your Facebook campaigns or ad sets on a daily or lifetime basis. More. But bids can be controlled manually, too.
2. Estimated Action Rates
This is the estimate of the probability that a person will engage with your ad. This projection is based on the types of content someone has engaged with before, from whom, in what format, in what location, and more.
This is one of those formulas that is likely more complicated than we could ever imagine, based on mounds of data.
3. Ad Quality
This may sound like it’s similar to the factor above, but it’s different. This isn’t about whether the person is likely to engage with an ad. In this case, it’s in response to feedback from others with the ad so far.
Ad quality is based on signals and behavior associated with the ad itself. Are people responding positively to it? Is it getting reported for violating rules? Are people clicking the ad and performing the goal action, or do they immediately abandon? Ad quality is based on factors like engagement bait, click bait, dwell time, and more.
High quality ads that are getting lots of engagement and generating your goal action have a huge advantage. Otherwise, you’ll need to pay more to win the auctions.
Make sense?
