What You’ll Learn:
- Identify the working components of the ad auction and delivery process.
- State how the ad auction works to creative professionals.
- Integrate Facebook’s creative best practices to optimize assets.
Introduction to the Facebook Ad Auction
Imagine you have an approved ad ready to be displayed to users. Before it is delivered to anyone, the ad needs to compete for a placement on an individual user’s screen.
To do this, Facebook has an ad auction to determine which ad should be displayed to the user. For every instance when an ad is eligible to be displayed, an auction takes place to determine which ad wins the coveted spot. The winning ad maximizes the value for both people and businesses.
Maximizing Total Value
The winner of this auction is not simply the advertiser that pays the most. To ensure that the ad maximizes value for both users and businesses, the winner of the auction is the ad with the highest “total value”. This value is measured by the following three metrics:
- Advertiser Bid
Your bid for the event you selected as your optimization goal.
- Estimated Action Rates
Likelihood that impression shown to this person will lead to your desired result.
- Ad Quality
A measure of the creative quality of an ad as determined from many sources including feedback. This includes people viewing or hiding the ad and assessments of low-quality attributes in the ad, such as withholding information, sensationalized language, and engagement bait.
Creative Is Critical to Campaign Performance
Having good creative is extremely important for having a highly performing ad on Facebook. Good creative increases the total value of an ad, while poor creative decreases it.
The Role of Ad Delivery System
Facebook’s delivery system determines when, where and who the ad is shown to. For every opportunity to show an ad, Facebook holds an auction (e.g. between ads #1, #2, #3, #4 in the picture below) to determine which gets shown.
The winner isn’t the highest bidder but the ad that creates the most value for the user and businesses.
Ways to Improve Creative to Increase Total Value
You can increase the total value of your ad by:
- Designing for mobile first
- Incorporating Facebook’s creative best practices for mobile
How to Make Sure Your Creative Is Effective?
We recommend using different iterations of creative in a single campaign and letting the ad delivery system figure out which ones are performing the best.
More creative assets in each campaign let our machine learning algorithm identify and capture the creative that resonates best with your audience. This allows us to display the most valuable ad to each user that aligns with your goal.
Together, estimated action rates and ad quality measure an ad’s relevance.
In fact, Facebook subsidizes relevant ads in auctions, so more relevant ads can cost less. In other words, an ad that’s relevant to a person could win an auction against ads with higher bids.
It’s the Combination of Budget, Targeting and Great Creative That Wins
Ad auctions ensure that the right ads are being shown to the right people. Winning an auction takes more than money and targeting, it takes great, engaging creative executions.