How does Facebook ads auction really work?

Many entrepreneurs these days, whether they have a Shopify store or any other e-commerce business, start using Facebook ads without knowing how ad auction actually work. This is not recommended because in most cases they end up wasting a pile of money.

If you decide to promote your business on Facebook, there is a very good chance that you are going to have a competition.

facebook ads auction

The question is who is going to win a specific Facebook ad auction and why. What parameters determine whose ad is going to reach a potential customer? There is a formula that answers that question.

facebook ads auction

Total ad value depends on how much are you willing to pay per auction (this can be adjusted in your campaign) and your estimate conversion rates in the past and at the moment. This basically means that if you did good in the past you will do even better in the present and in the future.

facebook ads auction

However, there is one more component in the formula. Facebook uses different algorithms to help you promote your business and make profit but at the same time it strives to avoid spamming users with feed they are not interested in. If you want to outrun your competition you have to create quality ads that are appealing to your targeting audience.

This is especially important if you have just installed your Facebook pixel and started your very first campaign because Facebook don’t have any conversions from the past to rely on like purchases, initiate checkouts, add to carts, etc.

One of the best tips for beginners who just started using Facebook ads and don’t have any feed in their pixel is to target wide audiences ( over 1M ) because that would increase the chance to win an auction.

If you want to learn more about Facebook ads go to our website and contact us. It’s always better to invest in knowledge than waste money on bad ads.

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