The code to Facebook ads has been cracked.
The Bidding System
When you create a campaign on Facebook, you set a bid (the amount you’re willing to pay per engagement) and join an auction with competitors. You can either set a manual bid or choose Facebook’s default auto bid that’s backed by an algorithm. The biggest risk is bidding too low and not getting enough ad exposure, so it’s best to bid high at the beginning to win the auction.
Similar to Facebook, you can either set a manual bid or chose an auto bid on Google. Auto bids on Google are also based off an algorithm that uses your objectives: maximize clicks, conversions, target CPA, and so forth. Autobidding on Google will require trial and error along with adjustments to your objectives in order to maximize your campaign.
Ad Quality Measures
Facebook provides a 1 to 10 ad relevance score. The relevance score is determined by how much positive and negative feedback an ad is expected to receive from Facebook users. An ad’s score is important because when it is high, the cost to reach your target audience becomes lower. Conversational, positive and engaging text tends to bring higher feedback.
Quality on Google is also rated on a on ten-point scale as well. Google determines an ad’s quality score based on how many users are clicking on your ad when it appears in searches and how relevant it is to a search. If you want to increase your quality score, you should create a few different ads with varying keywords. After a trial run, go with the ad that gets the best score.
Tracking Ad Engagement
If you’re running ads on Facebook, the objective you choose is crucial. Based on that, Facebook comes out with the estimated action rate. This measurement is the percentage at which someone will act on your ad. Actions include clicks, video views, app installs, and so forth. One of the biggest mistake advertisers make is to rely on just boosting posts. If a campaign is stagnant, try optimizing for views instead of clicks, or ad-to-cart instead of sales.
Google tracks conversions which can help you optimize your ad campaign. You can set up conversion tracking on AdWords to monitor customer activity (purchases, sign-ups, etc.). A good tip is to use Google Analytics to find keywords that are driving traffic to your site and then bid higher on these keywords.
The life cycle of ad campaigns on Google and Facebook are somewhat similar, but some campaigns are better on one versus the other due to their distinct natures. Before running a campaign on either of the two sites, you must spend time calculating a bid price that makes financial sense for you based on your customer lifetime value.