How Ad Auction Bidding Works
It’s more nuanced than just having the highest bid. The winner of the ad auction is the ad with the highest total value. The total value is determined by three factors:
This is still a factor. The bid is how much the advertiser is willing to pay to get their desired result. This is sometimes set manually, but in the vast majority of cases, this is set automatically – allowing the algorithm to bid what it needs to to get the most results possible for the budget.
2. Estimated Action Rates:
This is an estimate of the probability that a person will engage with your ad. This could be based on what a user tends to engage with and the rate that people are engaging with your ad.
3. Ad Quality:
This is derived from real-time feedback of users who have seen it so far and automated assessments of the ad that include checks for violations like engagement bait.
So how do you win the auction?
Maybe this is the wrong question.
You can win the auction primarily on having the highest bid, but that would mean wasting budget on people who never take action or pay
The real question is…
How do you win the auction with the right people, who will not only see your ad, but click on it, and buy your products?
How do you more efficiently reach the right people who are most likely to perform your desired action?
With effective creatives.
Effective creatives grabs attention and inspires engagement while playing within the rules.
Ultimately, it’s a quality ad that will give you the biggest advantage with winning auctions while keeping your costs down.