Minimizing Your Facebook Ad CPC Bid Prices by Avoiding Bid Competition

Facebook Marketing Bible

The following is an excerpt of entry in our Facebook Marketing Bible. The full version contains examples of how advertiser competition raises bid prices, and more strategies for when to pause or change the targeting of your campaigns to minimize your cost per click.

When running ads on Facebook, advertisers need to think about more than just creative and targeting to achieve optimal performance at the lowest cost.  By avoiding periods of high advertiser competition, the same performance can be achieved for lower bid prices.

Since Facebook has a limited supply of users that can be advertised to, it uses a marketplace system where the advertisers who bid the highest for a click from a certain demographic have their ads shown. To reach targets for the lowest cost per click, advertisers should consider running ads when bidding competition from other advertisers is low.

Here we’ll discuss strategies for maximizing advertising performance through strategic timing, and back up them up with data from AdParlor, a company that helps some of  the largest brands and game developers buy ads through the Facebook Ads API.

Avoiding Bid Competition

All advertisers on Facebook compete with each other to reach users, whether they’re targeting wide sets of demographics or specific niches. When more advertisers are trying to reach the same audience, the bid price required to secure impressions rises.

Facebook helps you gauge the overall supply and demand in the marketplace by providing “suggested bid” data. When suggested bid prices rise, that often means there’s more competition for the audience you’re targeting.

Ads API service AdParlor, which manages over 15 billion Facebook ad impressions a month and has provided us with reliable data on cost per click rates in the past, tracked the suggested bids Facebook provided across thousands of ads it ran each day. It compiled the data into this graph which illustrates how fluctuations in supply and demand influence the bid price necessary to attain impressions.

Near the end of the chart during early to mid August you can see a spike that’s likely due to advertisers running large “back-to-school” ad campaigns and therefore competing with each other for demographics such as teens, college students, and moms.

Minimizing Your CPC Bids

You can use an understanding of Facebook ad market dynamics to minimize the bids necessary for your ads to reach their intended audience. If your ad campaign isn’t urgent, consider pausing campaigns during seasons of peak advertising competitions such as just before the major winter gifting holidays, as well as back-to-school, Halloween, and Mother’s Day.

By closely monitoring your suggested bid prices, determining when prices are low enough to achieve a positive ROI, and pausing or shifting the targeting of your campaigns when bid prices peak, you can protect yourself from having market forces waste your advertising budget.

The full version of this article, complete with examples, and more strategies for reducing your CPC can be found in the Facebook Marketing Bible, Inside Network’s complete guide to marketing and advertising through Facebook.

[Thanks to AdParlor for the data]

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One Response to “Minimizing Your Facebook Ad CPC Bid Prices by Avoiding Bid Competition”

  1. Facebook to CPA Ad Case Studies List says:

    [...] CPC Competition & Suggested Bid Info – Sept 2011 – a look into the suggested bid mechanism Minimizing Your Facebook Ad CPC Bid Prices by Avoiding Bid Competition [...]

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