Episode 22: Facebook Ad Bidding Strategy
A good Facebook ad bidding strategy can be the difference between success and failure when advertising at scale. Learn how to tweak your bids the right way.
00:01 Stewart Anderson: Welcome back to this Spend 10K a Day podcast. I am Stewart Anderson, with me, my friend and colleague, Steve Weiss. Today, we are talking about bidding on Facebook ads, specifically when you should be using manual bidding, when you should be using automatic bidding. So Steve, this is one of the more technical subjects when it comes to running Facebook ads, as far as operating and managing ad campaigns.
00:28 Steve Weiss: Yeah. So people like getting really pretty with the... As I call, with the bidding strategies. I think bidding has evolved over the years before optimized for whatever you want came out, you would always... There'd be a suggested bid price for a click, and then you would set the suggested bid price, yet your PPC would actually come out above what you actually bidded, which was really interesting. So I always thought that the actual manual bidding on Facebook never actually worked unlike on search. I felt like the manual bidding was something that one of the engineers at Facebook's like, "Alright, we should put that in there just in case." But Facebook doesn't want you to do manual bidding. Sometimes it works better than optimized bidding, especially when you wanna just really reach an audience and you're willing to pay as much money as possible to reach that audience, but in most cases I've only had success with optimized for whatever conversion.
01:25 SW: 'Cause in Facebook, Facebook will set your parameters and go into the auction with something that it thinks will win the auction for a specific segment of users. Also, you have the option of setting a CPA target, which I would actually recommend if you... Well, I don't know if I'd recommend it because now you have automated rules, so you can actually set an automated rule around you hitting a CPA goal. But something to start thinking about from a technical perspective is if you set a CPA goal and you have an automated rule going, it's not reached over a specific amount on a CPA, then you're actually going into the auction to lose. There's redundancy there.
02:07 SW: But as far as when to actually have... When to do manual bidding, when to do automated, I'd say if you have a much smaller audience of people that you know are gonna buy, maybe a website custom audience or a remarketing audience, then I would say let's do manual bidding for those people. You wanna spend the top dollar to reach as many of those people as possible, so doing manual bidding might ensure you of that. As far as when not to do manual bidding, it's when you have open, look-alike audiences of people who've never engaged with you. That is like you're shooting from the hip. You don't know if the bid you're gonna place is actually gonna be enough to get you into the auction. So one, you risk not getting enough ad impressions, and two, you risk paying too much for those ad impressions.
02:51 SA: Yeah. It's funny, sometimes when I, in the past, before my time at MuteSix, when you have somebody who is a client, and they just know enough to be dangerous, as I like to say, and they go in... Obviously if you're paying somebody money to run ad campaigns for you, they go in, they wanna look and ask a bunch of questions about why you're doing things a certain way. And they see things like automatic bidding set up, and they're just like, "Well, if I'm paying somebody why am I paying you to just set something up and go on automatic bidding?" And topically that kind of makes sense before you really understand what the automatic bidding is. Smart people, the smarter people aren't trying to manually take care of everything. They're optimizing. They're spending their time configuring the things that really you want to be very manual and specific about, and they're letting Facebook do it's thing for the stuff that you should automate.
03:46 SW: I always make the argument that there's not much of a difference between automated bidding and manual bidding.
03:52 SA: Exactly.
03:53 SW: There's literally like, you're going into the same algorithm. You're just letting Facebook set your initial bid. The only thing you risk with manual bidding, the biggest thing you risk, you're just not getting any impressions.
04:05 SA: Yeah. That's the thing is... Especially when you're launching a new campaign, it's the most important thing is to actually get impressions, to get stuff out there and learn something. Ideally you wanna make sales, you wanna get clicks and everything like that, but you have to get impressions before you get anything else. And Facebook is gonna allow you, through automatic bidding, to really understand where the sweet spots might be and what you might need to do to optimize based on a variety of different factors.
04:28 SW: And if you... A lot of people used to tell me their strategy was to start off on automated bidding, and then move it over to manual bidding. That kinda works, but if you're gonna turn... Optimize a campaign that's already working and turn on manual bidding, you're really risking disrupting your place in the market, in an auction, and so I always say that's kinda risky. I think there's a lot of strategies of scaling around manual bidding that I've tried over the years. For instance, there's an audience of people that I know are really interested in my product already, I might start manual bidding on them, manual bidding for impressions, manual bidding for clicks. You could also manually bid for impressions which is also really interesting. You could manually bid for nearly anything. So there is an argument to test that when you have a segment of people who you know already like you, but mainly, like I always say, let Facebook do it's course. They know more about their... They're gonna put you in a place where you could spend money, and I always say the safest thing to do is just start off on automated for conversion or optimize for conversions.
05:41 SA: Yeah. So, I think the other thing I would probably say is a lot of people, especially if you're not spending as much time deep in the weeds in Facebook as we are and some of our campaign managers are, it's also one thing where, you don't wanna overload yourself. If you have a bunch of campaigns running and you start sending things to manual bid, it's a lot to manage, monitor, take care of, whereas unless you're doing something, as you said before, a specific, small, limited audience where you need to do manual bidding, or you're reaching such scale where going into manual bidding can really make the difference from a performance standpoint. For me, what I tell a lot of people is is you can actually start losing money switching to manual bidding just because it's so hard to keep track of when you have a lot of campaigns.
06:31 SW: Especially if you have a ton of ad sets, you have a ton of audiences. Going into manual bidding and continuously optimizing all those on a daily basis. There's tools out there like Espresso which do some of it and there's some automated rules, but automated rules weren't really set up to go to deal directly with manual bidding. So I find it difficult to really scale manual bidding as a whole on an account. But I feel like it's always gonna be there because advertisers wanna have a perception that they're in some form of control, when the reality is even on manual bidding, you have no control. You tell Facebook you wanna spend a dollar a click. How are they billing you $1.50 a click? They could do that, they're Facebook. They're still gonna bill you. And I'm sure you've seen that before, where you put in a bid and somehow the price you're paying actually comes up higher than the bid price.
07:23 SA: Yeah, absolutely. I think if I could give one piece of advice to people running ads on Facebook, it's take advantage of every possible way that you can automate your processes 'cause Facebook wants you... Even think about just like, as you mentioned, Facebook being pretty much in total control of everything. Facebook still wants you to make money and have profitable campaigns because if you don't have profitable campaigns, you're not gonna spend any more money on your platform, so they have every incentive to make you successful. So use automatic bidding until you're super savvy and you have a very specific reason. Steve, can you think of any other pointers that you have about manual versus automatic bidding?
08:05 SW: We still playing around with manual bidding on DPA ad campaigns. So for instance, people who just were in our shopping cart a day ago, we might run manual bidding and bid up is high as possible to get those accretions just 'cause we wanna be shown in front of those people. Sometimes we'll do manual bidding on video where we initially launch, converge the objective video views, and we set the manual bid for a video view. That's another time we do it, but that's it. We don't do a ton of manual bidding. I know some people do a lot of it. It's just not something we see that can scale.
08:41 SA: Yeah. And a lot of... When it comes to actually what's driving a lot of the performance, it's a lot of the other factors involved besides bidding. Bidding can make a difference but at the end of the day, you really want to be precise with your audience targeting. You want good, creative... You wanna be using good effective headlines, copy, sort of a lot of things that go into a successful ad.
09:02 SW: Yup, totally agree. So in essence, big picture summary, test that manual bidding for smaller audiences that you know are most likely to make a conversion action. Don't pay Facebook to optimize for conversions of small audiences. If you have larger audiences that have never shown intent and never shown purchase intent, you're trying to optimize for conversion. Very top funnel, always use optimize for conversion. Don't go into the marketplace trying to be smarter than everyone by doing manual bidding.
09:32 SA: Absolutely. Well, I think this has been a very impactful 10 minutes that we've provided right here. This is pretty getting deep in the weeds on Facebook for all of you aspiring Facebook media buyers. We're gonna be doing more episodes coming up on some super tactical stuff with Facebook ads, but as always, I'm Stewart Anderson, this is Steve Weiss, my colleague who's dropping knowledge here. This has been another episode of the Spend 10K a Day Podcast and we will see you next time.