PMG Digital Made for Humans

Making the Case For Manual Bidding

4 MINUTE READ | September 13, 2017

Making the Case For Manual Bidding

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Jamie Reinhard

Jamie Reinhard has written this article. More details coming soon.

Detailed targeting + effective placements + great copy + engaging creative = the perfect social campaign. By working closely with our client’s social teams, PMG effectively manages all of these. But there’s one invisible variable in this equation that is often forgotten: bidding. Budgets are easy to change and understand, but bidding can be much scarier, and it’s one thing that can strongly impact the effectiveness of your campaigns.

Before you go crazy and change all your bids, it’s important to understand how the Facebook Ad Auction works. Facebook’s goal is to match the right ad to the right person to keep both Facebook users and advertisers happy. For an ad to win the auction, Facebook considers three things: ad set bid, estimations of user engagement, and the quality/relevance of your ad. By knowing your audience, correctly targeting them, and creating imagery and copy that speaks to them, you can increase the relevance of your ads and also increase the likelihood that they will engage. The bid is or should be, the true value of a conversion, but you’ll never actually pay what you bid. Facebook only charges you the minimum that you would have needed to set your bid at to win the auction. So there’s no benefit in underbidding; paying the true value (or a little higher) is a much better strategy.

When you bid poorly, you can end up a) paying more for a result or conversion than it is actually worth to your business (example: paying $1 for a click to site when it’s really only worth 40¢) or b) setting a bid so low your campaign never gets delivered to the consumers who will actively engage and purchase. Based on these problems, we can often be shy or wary of editing and setting our own bids, and rely on either Facebook’s automatic bidding capabilities or Facebook suggested bids. Facebook automatic bidding is a great tool, but it’s a bit of a black box. You don’t get as much insight into exactly what you are bidding as you would if you were manually changing your own bids. We had begun to notice that CPCs in our retail clients DPA campaigns were shifting drastically day to day, and some campaigns were underperforming in terms of ROI.

Keeping all of this in mind, we began testing manual bidding on one of our retail client’s Facebook DPAs (dynamic product ads). With DPAs, they can typically be a gamble. WIth broader targeting and larger audiences, gauging performance can be difficult. A campaign could go an entire week without a conversion, and then suddenly convert five people. With automatic bidding, we were maxing out budgets on all campaigns, but in some cases, paying more for an impression or view than it was worth. With manual bidding, we hoped to be more efficient with our spend on low performers, improve ROI, and shift extraneous budget to higher converters and better performers.

By looking at past performance (CTR, AOV, ROI, etc.) and implementing a search-like bidding strategy and formula, we ranked the campaigns and selected five poor performers to test manual bidding.

We tested manual bids for two weeks, and the results we saw were, in a word, amazing. On DPAs which received manual bids, some as low as 40¢, we were able to decrease CPLC by over 34%.

Not only did CPLC and CPM decrease (decreasing overall cost for each campaign), thus freeing up more budget for campaigns with higher conversions, ROI increased by 220%. Campaigns that were considered bottom performers were matching, dollar for dollar, ROI for campaigns with historically better performance.

With these results in mind, we’ve moved forward with applying this new bidding strategy to other DPA campaigns for this particular retail client as well as other clients managed by PMG. A little extra effort on our part, but major rewards make this new tactic worth the effort. We’ve moved to automating this process by leveraging the bulk upload capabilities of Power Editor, reducing friction for PMG teams, and improving performance for our clients.

This is not to say we are against Automated Bidding. It is a great tool and an effective way of managing bids. Facebook knows and understands the Ad Auction like the back of its metaphorical hand. But bringing the logic and data back into your control, in some cases, can make all the difference. Just goes to show that thinking outside the “

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