How to Set Facebook Ad Bids Most Effectively in 2024

Facebook decides whose ads get shown through bidding, so you need to know how to set your Facebook ad bid as cost-effectively as possible. This article will walk you through how to set Facebook bids effectively. Let’s dive in!

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What Is a Facebook Ad Bid?

A Facebook ad bid, also known as the bid price, is the maximum amount an advertiser is willing to pay for the engagements, impressions or conversions generated by their ads on this platform.

When you set a Facebook ad bid at a certain amount, it means Facebook will never charge you more than the bid you set. If competition is low, the amount Facebook actually charges for your ads may not reach the bid you placed.

Facebook generally gives priority to advertisers who bid higher. So if you set your Facebook ad bid too low, your ads may not be shown at all. The opportunity goes to those willing to accept a higher bid.

That said, there is no need to set your Facebook ad bid too high either. Facebook’s system will rely on your bid to deliver ads more aggressively, but this will keep you from optimizing your ad costs. Set your Facebook ad bid at a reasonable level: not too high, and not too low.

How to Set Facebook Ad Bids Effectively

By Conversions

The first effective way to set Facebook bids is to optimize your bid for conversions. This is also one of the strategies Facebook itself recommends.

The reason is that this method helps your ads appear more easily in the feeds of the customers most likely to convert. Beyond that advantage, this strategy also keeps the ad price you pay optimized at the lowest possible level.

Link Clicks

When customers click on an ad, the conversion rate is not necessarily high. But if they click on a link that leads to your landing page, the conversion rate increases significantly. That is why this is also considered an effective, cost-optimized way to set Facebook bids.

By Impressions

If your advertising goal is brand growth rather than sales and revenue, then setting your Facebook ad bid by impressions is the most viable strategy. It also helps you optimize ad costs effectively when you need to run a remarketing strategy on Facebook.

Frequency of 1 Impression per Person per Day

When you only want your ad to be shown once a day to a Facebook user, you can use this Facebook bidding option. With it, your ads will no longer be shown repeatedly and continuously to users who are not your potential customers.

By Engagement

Bidding by engagement is currently the most widely used method on this platform. Use this way of setting Facebook bids when your goal is orders at the lowest possible advertising cost. Engagement will be the most suitable choice for you.

By Brand Awareness

To help users recognize your brand, Facebook ads are shown to users who are already paying attention to your brand. Facebook can test different audiences, and from there find the potential customers who are most interested in your brand.

By Lead Audience

If your goal is to collect and build a base of potential customers on Facebook, this way of setting Facebook ad bids is by far the most effective. Ads will be shown to a group of users who like to share information on Facebook. And of course, this effective way to set Facebook bids is also carried out at the most optimized price for advertisers.

Effective Facebook Ad Bidding Strategies for 2024

Lowest Cost

With the Lowest Cost bidding strategy, Facebook does everything it can to get your ad delivered as well as possible at the lowest possible cost.

Example: You set a Facebook ad bid of 200,000 VND for 1,500 ad impressions. With the Lowest Cost strategy, Facebook will try to show your ad 1,500 times at the lowest cost possible. And the cost will certainly come in lower than the 200,000 VND you set.

Lowest Cost with a Bid Cap

Unlike the Lowest Cost strategy, here Facebook still tries to achieve the goal you set, but the cost stays within the range you allow. When setting a Facebook ad bid, you don’t need to worry too much about setting the bid too high.

That’s because Facebook always tries to save you as much money as possible. And if you want to save as much as you possibly can, you can use the Lowest Cost strategy. With this strategy, take care not to set your Facebook ad bid too low. Your competitors may bid higher and win a better audience than you.

Target Cost

As the name suggests, the Target Cost strategy means you accept that Facebook may spend more than the bid you set. For example, if your bid is 60,000 VND per order, with this strategy Facebook has the right to spend more than 60,000 VND per order.

If your advertising goal isn’t too concerned with saving costs, choose this way of setting Facebook bids. It can be a good fit for your advertising goal.

Does Your Bid Decide Whether Your Facebook Ads Get Shown?

It is easy to understand why Facebook gives priority to ads with higher bids. Simply put, it wants to earn more money from its advertising service.

But if you believe the bid determines 100% of whether your ad appears on Facebook, that is not accurate at all! Facebook also relies on an extremely important factor, the user: the quality of ads on Facebook is judged by users’ interest, engagement and other reports.

When you set a reasonable Facebook ad bid, or one higher than other advertisers, and combine it with a high ad quality score, Facebook will evaluate your ad positively and prioritize its delivery.

From this, we can see that in the bidding battle, having money doesn’t necessarily mean winning. What Facebook cares about is not only money, but also the user experience on its social media platform.

Factors That Determine Your Facebook Ad Bid

You may not know this, but when you advertise on Facebook, ad placements are limited. Delivering every ad related to a user would seriously harm their experience on Facebook.

When ad placements are limited, Facebook has to run an auction to decide which ad to show first. By joining this competition, you are competing with many other advertisers to win quality customers from Facebook.

The Bid You Set

As mentioned above, the bid you set for your ad campaigns is what Facebook treats as the amount you are willing to pay to have your ad shown.

Example: You set a bid of 3,000 VND for each user engagement with your ad, and Facebook understands that you are willing to pay 3,000 VND. If a competitor joins in, Facebook quickly opens an auction. Once you beat all your competitors, your ad is shown.

The actual price is usually lower than the bid you set, unless you cut it too fine and set your bid too close to what Facebook charges for one engagement.

For example, say there are only 3 ad placements but 4 competing advertisers: A, B, C and D. A sets a Facebook ad bid that is too low and is likely to be eliminated early, leaving the 3 placements to B, C and D. But if A wants its ad shown more often at that price, A needs a high ad quality score and a high estimated action rate as well.

Ad Quality Score

The ad quality score is determined by user engagement. There are usually two kinds of engagement:

• Positive engagement: Comments, shares, likes,…
• Negative engagement: Reporting violations, hiding posts….

The more positive engagement you get, the more Facebook’s algorithm understands that your ad is relevant and useful to users. As a result, your ad quality score goes up. This is an extremely important metric if you care about how to set Facebook bids effectively.

Estimated Action Rate

The estimated action rate is not clearly disclosed. We can only guess that Facebook bases its ratings on the engagement rates of earlier ads in each industry. For example, ads for fashion and household products tend to have a higher engagement rate than ads for cars, apartments and real estate.

Facebook Ad Auction Methods

CPC Bidding

CPC (Cost Per Click) is a bidding method based on each engagement from a Facebook user. You choose the maximum amount you are willing to pay for each ad engagement on Facebook.

CPM Bidding

CPM bidding is ad bidding based on 1,000 impressions. You set the Facebook ad bid you are willing to pay this social network for every 1,000 impressions of your ad, within your means.

CPA Bidding

With conversion-based bidding, a conversion can be defined as a click through to the homepage, a phone call, an add-to-cart action, or an online payment.

These conversions give you more useful information. For that reason, bids under this method will be higher than under the other methods above.

Where to View and Adjust Your Ad Bid

To review your Facebook ad bid settings, go to the Budget and Schedule section. There you will also find the 3 bidding strategies we covered above (Lowest Cost, Bid Cap and Target Cost) to choose from.

You can also review the bids set for previous campaigns or adjust the bid you set for this ad campaign.

Why Is Your Ad Bid So High?

If you find that Facebook ad bids are high for the products and services you are advertising, find out the cause and fix it right away to avoid wasting budget.

Some reasons that can push your ad bids up include:

• Unappealing ad content: This leads to a low click-through rate (CTR), which raises your cost or your bid per click.
• A large, unlimited ad budget: Facebook understands that you want to advertise to the maximum, which pushes bids up.
• Ads at the wrong time: This draws little attention and raises bids.
• Reported ads: Complaints about an ad reduce its delivery and raise bids.
• Violating ad image policy: Text on an image exceeds 20% of the image’s total area.
• Targeting the wrong audience: This draws little attention, lowers CTR and raises bids.
• Advertising on Pages and ad accounts that have been penalized, such as spammy Pages, fake likes, unpaid ad bills…

What Is the Facebook Bid Trap?

The bid trap is the feeling many Facebook advertisers have that bids haven’t risen significantly, when in reality ad prices have increased 10 or even 20 times compared with about 4 years ago.

In 2013 and 2014, when Facebook advertising was just becoming popular in Vietnam, the price per engagement was only about 100 to 200 VND. Today, you can see that prices have risen considerably, to 1,000, 1,500, 2,000 or even 2,500 VND.

Why Does Engagement Rise While Engagement Quality Falls?

Experienced Facebook advertisers often notice that although they can raise their bids to increase user engagement with their ads, the quality of that engagement drops significantly.

Comparing the quality of Facebook ad engagement between 2014 and 2018, or between 2016 and 2018, shows a big gap in quality. This raises a question: why did Facebook ads work before, bringing in orders, but not now?

The answer: Facebook may have gotten “old.” Most Facebook users are between 25 and 34, an age group with far less online buying power than younger people. In addition, the rise of TikTok Shop and e-commerce platforms such as Shopee and Lazada is also part of the reason Facebook engagement is no longer as high in quality as it used to be.

Through this article from The7, you can see that the most effective way to set Facebook bids is to choose a price that fits your goals, neither too high nor too low compared with your competitors. In addition, high-quality ad content is another way to get your ads shown more often on Facebook.

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