As we all know that Facebook becomes one of the biggest platforms for advertisement of any business. There are 1.15 billions of active users of Facebook. Which is make it a unique and relevant platform for your business advertisement. But getting your business ads in the feed of your target users need a cunning strategy.
Through this article, I will let you know how Facebook algorithm work for your business ads? And put your ads on your targeted users feed.
Facebook Ad Auction Basics
I will let you understand this whole context with an example. Continue reading….
Prativa is a 23 years old girl who lives in Bhilai. The first things she does in the morning is open her Facebook account.
Thousands of advertisement are waiting to pop up in the feed of people like Prativa at the moment she starts looking her news feed- ads that are targeted to people who are female, 23, who lives in Bhilai, and so on.
Facebook holds auctions that consider each of these promoters’ offers for a chance to serve an advertisement impression to somebody like Prativa. They additionally consider how intriguing and applicable we think Prativa will discover each of these sponsors’ promotions, and how likely she would make a move, for example, clicking or making a buy in the wake of seeing the advertisement.
Based on all of these considerations, Facebook determines which advertiser will win this auction.
Finally, Facebook shows Prativa the winning ad in her News Feed.
The similar cycle happens each time when people open their Facebook feeds and sees an ad.
Facebook Ad Auction vs. Other Auctions
Today, advertisers can utilize their bid to disclose to us exactly the amount they esteem a particular result. The sale then uses their bid to upgrade the ad for that particular result. The bid is generally the greatest sum they wind up paying for that result — and some of the time, advertisers really pay not as much as the sum they bid!
Facebook ad auction works along these lines since we’ve organized it in view of the Vickrey-Clarke-Groves (VCG) show. It is a motivating force perfect auction, implying that if advertisers bid their actual incentive for the activity that the ad is being streamlined for, this can help augment their ROI.
How Your Bid Is Calculated
At the point when your ad enters the Facebook ad auction, it rivals different ads in the auction went for individuals in your intended interest group. Similarly, as with all substance on Facebook, Instagram, and Audience Network, Facebook needs to ensure they are demonstrating the correct substance to the opportune individual at the perfect time. Facebook likewise intend to upgrade the client encounter by restricting the quantity of ads individuals find in their Feed, so you’re fighting for a set number of spaces.
- Your started bid
- According to people reaction after watching your advertisement on their feed
- How relevant we predict people in your target audience will find your ad
How total bid is calculated for different objectives:
If you’re optimizing for impressions or reach and paying for impressions (CPM) …
Total Bid = [ CPM bid ] + [ ad relevance and quality factors ] If you’re optimizing and paying for clicks (CPC) …
Total Bid = [(CPC bid) x (expected click-through rate or eCTR) *1000] + [ad relevance and quality factors] If you’re optimizing for actions and you’re paying for actions* (CPA) or impressions (oCPM) …
Total Bid = [(CPA or oCPM bid) x (click-through rate, or eCTR) x (conversion probability, or eCVR) * 1000] + ad relevance and quality factors]
Pricing for Your Ads
After an ad wins an auction, the cost paid for the winning ad depends on the esteem lost by the greater part of the advertisers whose ads did not get demonstrated – not only the bid of the second place advertiser. Facebook decide this lost esteem in view of those advertisers’ bids. Since your cost depends on the esteem lost by the greater part of the advertisers you’ve uprooted, and not only one bidder, this limits the capacity for individuals to “amusement” the auction by attempting to undermine any single bidder.
The Facebook algorithm designed for auction is based on promoting truthful bidding. If advertisers bid the true value of their outcome from the ads. They will like to get best ROI.