Bidding and Pricing
Distribution of ads on Facebook is determined by a number of factors including bid, marketplace competition, target audience, and ad performance history.
Optimizing Your Ad
Your ad will be automatically optimized to reach the audience you chose in the previous step. This section shows a summary of how your ad will be optimized. If you want more advanced control over pricing and your objective, click Switch to Advanced Pricing under Pricing.
CPM stands for cost per 1,000 impressions. This means you’ll pay when people see your ad.
CPC stands for cost per click. If you're paying for clicks, you’ll be charged each time someone clicks on your ad or sponsored story.
Unless you choose See Advanced Options, you’ll pay for impressions (CPM) on your ad. This means you’ll pay every time someone sees your ad, instead of for clicks.
When you pay for impressions, your ad will be optimized to show to the people who are most likely to take the actions that will help you meet your objective within your target audience. Because of this, each impression your ad receives is likely to add value to your campaign.
The minimum cost for a click is $0.01. Though this is technically the smallest bid you can enter, in most cases this bid will not be high enough for your ad or sponsored story to be shown. You’re most likely to receive impressions and clicks if your bid is in the suggested bid range that's provided in the pricing section when you’re setting up your ad. You can also monitor the suggested bid amount in the Ads Manager.
Your maximum bid for a click must be less than your daily budget. If you want to place a higher bid, you need to raise your daily budget.
Your daily budget has to be at least two times the amount of your bid. For example, if you bid $2.00 for a click, your daily budget needs to be at least $4.00.
All ads and sponsored stories compete with each other equally regardless of whether they’re paying for clicks or impressions. For any available ad inventory, the best ad is selected to run based on the budget, quality and ad performance.
If you pay for clicks, the maximum bid amount you set in the pricing section when you’re setting up your ad will determine how often your ad shows. If you are paying for impressions, your ad will be optimized to show to the people most likely to help you meet your goal, based on the daily and lifetime budget you’ve set.
You will never pay more than the daily or lifetime budget that you set in the pricing section when you’re setting up your ad. Your ad or sponsored story will be paced based on the budget you enter, the goal you set and the period of time you specify.
If you’re advertising a Page, app or event, the only way to pay for clicks is to select See Advanced Options in the goal section. This setting for experienced advertisers lets you configure your ad and sponsored stories, including setting a maximum bid per click. When you pay for clicks, people may click on your ad but they may be less likely to take other actions.
When you pay for clicks, people may click on your ad and go to your Page, app or event, but because the ad delivery isn’t optimized to show to the people most likely to help you achieve your goal, you may pay for clicks that don’t turn into actions such as likes, Page post engagement, app installs, app uses, or event joins.
You can estimate the cost for your ads or Sponsored Stories in the ad creation process. You're able to do this before you enter any payment information, so even if you aren't ready to create or start running your ad, you can use this as an estimator free of charge. To do this, simply follow these steps:
- Start the ad creation process. Choose the destination of your URL.
- Enter your targeting criteria. This information will be used to estimate a bid range for you.
- Go to the Pricing section where you'll find a range next to "Suggested Bid," which will help you estimate your cost for reaching your desired audience.
Keep in mind that when you run your ad you will only be charged for the number of clicks you receive (CPC) or the number of impressions of your ad that are displayed (CPM), and the amount that you are charged will never exceed your daily or lifetime budget.
If you’re advertising a Page, app or event and you select See Advanced Options, or if you’re advertising an external website, you’ll be able to pay for clicks (CPC) in the pricing section. The suggested bid range is there to help you pick a maximum bid so your ad will be successful. It’s based on how many other advertisers are competing to show their ad to the same audience as you are.
You don’t have to choose a bid in this range, but you should use it to help you pick a bid that will result in a good amount of impressions and clicks. You will never pay more for an impression or click than necessary, so entering your true maximum is the best way to make sure you don’t miss out on impressions and clicks you could have received.
You may notice that the suggested bid range changes over time. This is normal, since it depends on how many other people are competing for your target audience.
If you notice the suggested bid range increasing for your ad or sponsored story, it may be because its performance history isn't strong due to targeting parameters or the ad creative. Make sure your ad or sponsored story is targeted to the most relevant audience, uses clear language in the ad text, has a strong call to action, and has an eye-catching image.
You will never pay more than the maximum cost per click (CPC) that you have specified. You will also never be billed more than your daily or lifetime budget.
LIf you'd like to see all of the choices you've made and a preview of your ad, click Review Ad. If you're ready to place your order press Place Order.
Some More Facebook Concepts
What is the Suggested Bid Range and how does Facebook calculate it?
If you’re advertising a Page, app or event and you select See Advanced Options, or if you’re advertising an external website, you’ll be able to pay for clicks (CPC) in the pricing section. The suggested bid range is there to help you pick a maximum bid so your ad will be successful. It’s based on how many other advertisers are competing to show their ad to the same audience as you are.
You don’t have to choose a bid in this range, but you should use it to help you pick a bid that will result in a good amount of impressions and clicks. You will never pay more for an impression or click than necessary, so entering your true maximum is the best way to make sure you don’t miss out on impressions and clicks you could have received.
You may notice that the suggested bid range changes over time. This is normal, since it depends on how many other people are competing for your target audience.
If you notice the suggested bid range increasing for your ad or sponsored story, it may be because its performance history isn't strong due to targeting parameters or the ad creative. Make sure your ad or sponsored story is targeted to the most relevant audience, uses clear language in the ad text, has a strong call to action, and has an eye-catching image.
Selecting a Campaign
Create a new campaign or add your ad to an existing campaign
- New Campaign: Best option if your ad varies at all from your previous ads
- Use Existing Campaign: Best option if you're creating an ad that has the same goal as another campaign because the they will use the same budget. We'll only run a few ads from any campaign, so the ad that performs best will run more often.
Name: If you choose new campaign, the name will pre-populate with details to make your ad identifiable. You can change the name, but it should be something that you'll be able to identify if you want to add more ads to the campaign later.
Campaign Schedule: Choose Run my campaign continuously starting today to start running your ad continuously when it's approved or select Set a start and end date to select a specific start and end date to run when it's approved.
Campaign Budget:
The cost of advertising on Facebook depends on the size of your audience and your budget. This section will help you determine your budget for your campaign.
If you want to run your campaign continuously, choose a per day budget, but if you know how long your campaign is, choose a lifetime budget. If you choose a per day budget, we'll pace your spending per day while a lifetime budget will pace your spending over the lifetime of the campaign.
Your daily budget controls how much you'll spend on a specific campaign each day. Each campaign will have a separate budget, so keep this in mind if you have more than one active campaign in your account.
Your ads and sponsored stories will automatically stop showing once the daily budget for the campaign has been met for that day. You'll never accrue charges in excess of the budget you set.
You can also set a lifetime budget, which lets you choose an amount to spend over the entire scheduled span of a campaign.
Lifetime budgeting is similar to a daily budget but instead of setting an amount to spend per day, you set a lifetime budget to spend across the finite lifetime of the campaign. Our system will automatically try to spread your spend out evenly across the entire period of time that you've selected.
One benefit of lifetime budgeting is that our system will also automatically pace your ad spend to make the most of your budget. For example, if you specify $100 USD to be spent for a 10 day campaign, each day will need to spend $10/day. If the campaign only spends $8 on the first day, the system will try to make up the missed amount at a later date within the campaign.
Your daily spend limit is the maximum amount that you’ll spend on advertising on Facebook in one day. This limit is different from your daily budget. You control your daily budget and will never be charged in excess of that budget each day.
Your daily spend limit is used to manage payments and will increase automatically as you successfully make payments at each previous limit. If your daily budget is less than your daily spend limit, you will never hit your daily spend limit. It’s a bit like a credit rating. As your credit improves, the spending limit on your credit card may increase, but you never need to spend more than you’re comfortable with.
For example, if you have set a daily budget of $25.00, and your daily spend limit is $50.00, you will only be charged for $25.00 day.
You can view your daily spend limit by visiting the billing section of your Ads Manager.
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