Facebook: Winning the Biggest Auction of Them All

Advertisers have long used reach and frequency as the principle framework of media planning The logic is straightforward set a communication objective and back that out to the desired number of contacts requiring to elicit action from a given percentage of a population This is especially useful when you are buying GRPs from a channel rather than impressions form a platformFacebook offers reach and frequency on a reserve basis and many agencies and advertisers take that path Despite the quotreservequotnature of the transaction every impression in the Facebook ecosystem does compete in an auction It39s a big auction unique ad experiences in two billion plus unique Facebook and Instagram feeds require trillions of daily adtoimpression matching eventsLess apparent perhaps for the more vigilant auction participants Facebook also allows advertisers to exploit the phenomena of infinite inventory to sharpen their reach goals and to take a variable pricing approach to their reach objective Exploiting that variability can yield a significant price advantage compared to standard reach and frequencyIt39s as simple as the idea of buying apples at auction If you want five but there are only ten available you will either want to reserve five at a reasonable price or need to be prepared to overpay or go without If there are one million apples available and you still only want five you will be confident of getting your share at a more attractive priceAuction variability and volatility are the friends of the attentive buyer The Facebook Ads system allows you to set parameters that help test the relationship between cost and effective reach Setting frequency goals and budget start and end dates to the same cadence reveals the relationship between frequency delivery frequency cap settings and time Take the case of a oneperweek frequency goal across a threemonth campaign flight Within a week the buyer can observe the delivered frequency at the frequency cap and then reset the campaign technically create a new weekly adset to have an adjusted frequency cap and price to deliver upon that same effective reach and frequency goalCreativity also presents the opportunity to bend the cost vs reach curve in FacebookFacebook operates a quottotal valuequot auction that39s very different from quotthe highest bid winsquot It39s an auction type that gives credit to advertisers who focus on delivering better creative performance to their audience So what does this mean If you bid 1 CPM in the auction and your creative performs poorly for your audience Facebook devalues your 1 bidamp160 The converse is true relevant highperforming creative is rewarded There39s no dimension on which a superior customer experience is not good for everyoneBy its nature the Facebook auction is dynamic and it rewards the most thoughtful participants Approaching it from a guaranteed reserved basis is to underleverage its power Active bidding strategies and investment in great creative assets make a difference for some advertisers this could mean additional value of between 10 and 30 at a campaign level Don39t set it and forget itClick the social buttons above or below to share this content with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

SUBSCRIBE FOR FREE MEDIAVILLAGE CONTENT | BECOME A THOUGHT LEADERSHIP CONTRIBUTOR

Facebook: Winning the Biggest Auction of Them All

Author

Publish date

Channel

John Donahue

FEMA and the Ad Council Encourage AANHPI Communities to Enhance Disaster Preparedness in New PSAs - Ad Council InSites

More Videos:

SUBSCRIBE FOR FREE MEDIAVILLAGE CONTENT | BECOME A THOUGHT LEADERSHIP CONTRIBUTOR

Facebook: Winning the Biggest Auction of Them All

Enjoying This Commentary? There's More to Love

John Donahue

Stay in the know with more from MediaVillage

TAGS:

FEMA and the Ad Council Encourage AANHPI Communities to Enhance Disaster Preparedness in New PSAs - Ad Council InSites

Cookies