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by Harrison Cox on July 21, 2020 | Social Media Ads

Last Updated on

If you’re a social media manager or part of an in-house marketing team, you’ve probably been left wondering why some Facebook ads provide fantastic results & others fail dismally.

As a social media ads agency, we have to navigate through this day in and day out for our clients’ campaigns.

The secret is to first understand how Facebook chooses to deliver your ads to its users. This article will highlight the importance of optimising your ads across all areas of the Facebook auction, namely bidding, estimated action rates and ad relevance score.

 

How does Facebook deliver your ads?

It sometimes might feel like a magical wizard sends your ads out into the aether but there is a method to the Facebook delivery madness.

 Facebook attempts to create the best user experience across the platform & that includes advertising. It will maximise your results based on the initial campaign optimisation. These can include objectives such as awareness, traffic & conversions.

The first important step is to select the right campaign optimisation that is in-line with your business goals. There is no point spending money on a “reach” campaign when you actually need to optimise towards form-fills or leads on your website.

To achieve the best possible optimisation for the user, Facebook holds an auction whenever someone is eligible to see their ad. Unlike a traditional auction, the winner in a Facebook auction is the ad with the highest total value.

 

How does Facebook calculate total value of ads?

The equation for Facebook’s total value of your ad is the following:

The advertiser bid x estimated action rates + ad relevance & quality

Let’s take a look at how each of these parts of the equation work in the platform.

 

The advertiser bid:

Seems pretty obvious, but your bid & total budget will have a direct impact on campaign performance. An automatic bid is provided by Facebook as a default for each campaign type or you can set your own manually if you choose.

The key here is to find the “sweet spot” where you are not spending too much in order to outbid your competitors or too little to not show up in the auction.

When you see your CPC, CPM & CPA climbing with no significant increase in the number of leads or traffic to your site, it can often be a good indication you are spending more than you need to in order to achieve similar results in that campaign.

Similarly, if your targeting pool is large enough & your ad has all components properly put together & you aren’t seeing much ad delivery, it can be an indication that you need to increase your budget & bid.

 

Estimated action rates:

This is the measure of how likely someone is to take the desired action after being served your ad. In other words, it is the predicted click through rate or conversion rate your ad is likely to achieve.

This is the auction determinant that is most influenced by the early stages of Facebook campaign delivery, so it is crucial to ensure things like landing pages & user experience on your site are optimised before launching your ads. Receiving positive social comments & shares on your ad will also help improve this score.

Here’s an example of some ads that we created for PAX Australia, as their Facebook marketing agency. These ads were highly relevant and relatable to the audience and received a number of likes and shares that impacted the auction rates.

PAX Australia Facebook ads

Other factors that influence your estimated action rate are recent ad/page activity, the campaign history of the account & former breaches or spam links formerly advertised in the account. 

 

Ad quality & relevance score:

This last element of the auction represents how Facebook believes the person looking at your ad will interpret its quality.

Examples of how your ad can be negatively affected are hostile comments on the ad, many people hiding the ad on their feed, a high bounce rate once the user is directed to your site, or simply a boring ad creative that nobody wants on their feed.

This area of the auction is less of a science and definitely feels like the magical Facebook wizard making arbitrary decisions at times. It is important to not be too discouraged when seeing average or below average relevancy scores, since you might find your campaigns perform well due to excelling at the other areas of the auction.

Take an example from one of our marketing agency clients in the hotel/travel industry. They ran very simple creative in their Facebook ads promoting discounted hotel bookings & directed users to a booking engine with a discount code.

The ad relevancy score was deemed low by Facebook, due to the large budget of the campaign that drove thousands of clicks to the booking engine, only to result in a few hundred bookings. However, a few hundred bookings for this hotel client resulted in a massive ROI for the campaign.

The advertiser bid & estimated action rates helped this campaign soar to the top of the auction. At the end of the day, don’t be upset if you can’t hit the perfect relevancy score if you are hitting & exceeding your KPIs. Just use that as further fuel to improve your ad creative in the future without throwing your initial campaign on the scrapheap.

 

Winning the auction:

The ad with the highest total value from all three elements will be deemed the winner and served to the Facebook user. This means that ads with higher bids don’t always come out on top.

You’ll also notice that you may be charged a different amount to the bid you have set in the account if you are using manual bidding. This is because Facebook will try to even out higher and lower bids when serving ads to users to get as close as possible to your target bid.

You’ll also be charged the minimum amount you would have needed to win over the person advertising below you.

 

Facebook advertising best practices

At the end of the day – you as an advertiser need to create the best user experience for your target audience on Facebook.

The auction may feel like a mystical process at times, but nothing will perform better than a killer original campaign idea coupled with a well thought out targeting strategy.

If you feel like discovering how to turn your Facebook campaigns into star performers for your business – let’s chat!

I hope this article and marketing agency experience helped decode Facebook’s ad platform for you to make it feel a little less like a divination process and a little more manageable.

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