Bids are one of the most important variables when it comes to optimizing budgets, setting target values, and getting the most value of your Facebook campaigns.
Automatic bidding strategy (known as Lowest cost) implies that Facebook algorithms will manage the bids for you and determine which auctions to get in and try to maximize the results for your budget while with Cost and Bid control strategies you can take much more control over your costs and overall efficiency of your campaigns.
And although it's great to have the option to control the bidding, it's not always necessary and won't guarantee better ads performance in some of the cases. As Facebook says, the more control you have, the more constraints you place on Facebook to find lower-cost opportunities for your desired outcomes. So choose wisely 😉
There are 3 types of Bidding strategies on Facebook allowing to control bids and costs per optimization events. What is the difference and how each one works?
Target cost. After creating an ad and entering the auction you define the average cost you're ready to pay per optimization event and you always stay within a tight window of your average cost (the cost may be 10% higher or lower than your average cost), but you never go into auctions with the cost outside of this window.
Note, not all optimization goals are available for target cost.
Bid cap. In this case, you set the hard cap on the cost per optimization event and your ad won't enter any auction which costs more than X per purchase. With a bid cap, Facebook starts from the lowest price auctions and goes up when low price auctions are depleted, but it will not go for any purchase with the price higher than your determined cost.
Note, you may not spend your entire budget once you hit the cap, as others would be winning the auctions while your bid is too low.
Cost cap. This bidding strategy allows setting your desired cost per auction with no hard caps on bids. Similar to a bid cap, Facebook also starts seeking low-cost conversions and keeps increasing bids when there are no auctions at low prices available, but unlike the bid cap strategy, it will go over your bid cap when Facebook thinks there is a good likelihood of conversions. So this strategy is supposed to keep your average cost within a specific threshold to bring the most efficient results.
Example: If you set a cost cap of $5 and an optimization event becomes available for a $5.30 bid, Facebook will likely go after this conversion. But first, it's going to pick up anything that is much cheaper, cost-wise. If there are enough optimization events at, say, $2 cost, that's where the bid would stay until all the cheap options are depleted.
Revealbot allows setting up and changing Bidding strategies using automated rules for Facebook campaigns. So if you don't utilize your campaigns budgets to the full or keep getting too few conversions - you can try changing bid strategies and the bid thresholds to figure out what bidding strategy brings you more profitable results.