Facebook Ads Bidding Strategies: Lowest Cost vs Highest Cost vs Minimum ROAS vs Cost Cap vs Bid Cap

what's up marketers today i want to tackle a subject that i get a ton of questions about on this channel which is all about the different bidding strategies and which one you should use for your facebook ads now for brands that are just starting off or are pretty new to the facebook ads platform i'm gonna make this super simple for you guys just use the lowest cost bidding strategy and the reason why i recommend this is because nine out of ten times when your facebook ads aren't working it has absolutely nothing to do with your bidding strategy it has a lot more to do with your creative your landing page or even your product the other bidding strategies in my opinion are how you actually achieve better efficiency as you scale your bidding strategies are so seldom going to be the thing that help you gain traction on this platform your biggest levers are always going to be number one a product that people actually want two great creative that is going to attract those people and then number three actually pointing that great creative at the right people now next i want to give you a breakdown of what these other bidding strategy options are and what they do so when you are launching a new campaign on facebook ads you can use the following bidding strategies lowest cost highest value minimum row as bid cap and cost cap now the first one that i want to start with is lowest cost now this is the one that i most commonly use as long as the other media buyers most commonly use and it's definitely the one that you should start with if you're new to the platform now i use this about 65 to 75 of the time i always use this for testing new ads and i even sometimes use it for scaling and i almost always use it for retargeting and what's cool about this bidding strategy it's super low lift all you have to do is select this bidding strategy at the campaign level and then at the ad set level you have to choose conversions under optimization and you're good to go now the next bidding strategy i want to talk about is highest value and this is the second most common bidding strategy and likely if i'm not using lowest costs i'm probably using highest value and what highest value does is it actually tells the facebook algorithm hey i want you to go after the people who are more likely to spend more money on my website this is a little different to lois cost because the lowest cost is telling the algorithm hey i want to get purchases for the cheapest amount possible so it is a little different now highest value is something i really like to test for high aov products or even for stores that have multiple skus so i can tell the algorithm to go after people who are going to be more likely to spend more additionally if i'm doing a loyalty campaign or a retention campaign which means i'm going after past customers i will always be using a highest value bid strategy and the way that you can turn on the highest value bidding strategy is you actually have to turn on the ad set level and under optimizations you're just going to select value now next up is minimum row as and minimum row as is supposed to help you at least break even on your spend and even try to get you to achieve a certain return from that spend now the obvious question why doesn't everyone always use minimum row as will this bidding strategy always get me the minimum row as that i'm after and the answer is no the biggest caveat to this strategy is it's always going to prioritize your results over spend meaning if facebook doesn't actually think it can get you the results that you're after it's not even going to spend your money so if you're just starting off this strategy is not quite the silver bullet that you might think it's going to be additionally in a post ios 14 world you're going to need to make sure that you've enabled your pixel to pass back value via facebook's new event aggregated measurement now if you don't know what that means be sure to check out this video right here essentially in a post ios 14 world you're going to need to have already told your facebook pixel which events you're going to prioritize and you want it to actually track and if you haven't done this yet as of march 2021 you need to look into doing this as soon as possible now the big caveat here is that if you want to use minimum row as you're going to have to tell your facebook pixel to track purchase value and that's actually going to take up exactly four more spots out of the eight just to pass back that value data and i don't know why that is it's just how it is because facebook but again the big issue here with this bidding strategy is that if facebook can't actually get you those results it's not even going to spend which is why i often recommend for newbies to go ahead and just use lowest cost or highest value now with all of this said i have actually seen the minimum row as bidding strategy save accounts that suffered from super inconsistent results so if you're suffering from inconsistency and you've already done tons of testing on your audiences and you're creative and you already have some kind of idea and what is working on your facebook ads then i would give this one a try now the final two that i'm going to talk about are cost cap and bid cap and yes i am going to talk about these together because i often find that media buyers are using these bidding strategies for the same reason which is to control costs while scaling cost cap is meant to keep your cost per purchase at or below a certain amount now a reason why i generally don't recommend cost cap even though facebook tends to recommend cost caps over using bid caps is because i find that cost caps actually can tend to slow down your spend quite a bit and it takes quite a bit of testing to actually figure out what the optimal cost cap is going to be for you in fact when i do end up testing cost caps i actually create an entire separate campaign that is just for the sole purpose of testing out which cost cap is gonna be right for this product or brand now bid cap on the other hand actually controls the bid that you are placing in the facebook option and doesn't even consider your cost per purchase or cac in its optimization process now i actually find bid caps are a little bit easier to use because number one you don't have to go through as a robust of a testing process to figure out which bid cap is going to be right for you and it often more or less correlates to what you're willing to spend for that first customer bit caps are the most successful for clients who have access to internal ltv modeling where they can actually determine the most efficient cost to attain a first-time customer so this works really well for subscription-based businesses or businesses that have many skus and many repeat purchasers one of the downsides of big caps however is i do find that they need to be tweaked regularly so this does require quite a bit of maintenance on the media buyers part now with all of this said we are living in an ios 14 pending world this video was recorded in march 2021 and a lot of what i'm saying in this video might not be as relevant when apple finally rolls out as att prompt in fact some advertisers actually believe that bid caps are going to be the preferred method for buying media on facebook ads post ios 14. and while i do think that there is a ton of validity to that theory the truth is that none of us really knows what it's going to be like on facebook ads post ios 14 and the add prompt drop and that is it if you have any more questions about bid caps and which one your business should be using be sure to leave me a comment below and if you are a media buyer who has a favorite bidding strategy comment below with your fave alright thanks everyone see you next week bye

Channel: Dara Denney

Views: 5,305

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Id: Ef4mCWuCX68

Length: 7min 0sec (420 seconds)

Published: Sun Mar 21 2021