Having problems achieving conversions? Make sure that you are using Optimised Bidding on your campaigns.
A Brief Overview of Optimised Bidding
If you have been running Facebook ad campaigns, you most likely have heard of ‘Optimised Bidding’ (formally called oCPM or Optimised CPM). Optimised Bidding is a bid type that shows your ad to people most likely to convert for the action you want. For instance, if your preferred action is ‘purchase’, then Facebook will optimise your ad delivery to people most likely to purchase.
With Optimised Bidding, you pay for impressions. By setting your bid to ‘Automatic’ you are giving Facebook permission to optimise to your chosen objective (but without over-spending your budget). You can also select a manual bid, which is your target bid, as opposed to the maximum you want to pay. Facebook will seek out conversions close to your preferred bid, but may spend more than that in order to find converting customers.
It is generally considered that in order for Facebook’s ‘oCPM’ to fully optimise to future conversions (i.e. finding other people most likely to convert), you require AT LEAST 20 of your objective in any 24 hour period. So if your objective is purchases, then you need to reach 20+ purchases in a day for your campaign to truly start optimising.
But what if your daily budget isn’t large enough to reach 20 conversions? e.g. your daily budget is £550, yet your campaigns are averaging at £30 cost per purchase. On this basis, you would require a daily budget of £600 to reach 20 purchases (20 x £30). So what can you do?
Instead, make your campaign objective an event that is higher up your purchase funnel. For instance ‘Add to Cart’. A £500 daily budget at £30 cost per purchase would potentially get you 16 purchases in 24 hours. Therefore logically you would expect to get over 20 'add to carts' in the same period (it’s highly unlikely that everyone that adds to cart goes on to purchase - unfortunately, that just doesn’t happen!). So instead, you optimise to ‘add to carts’, and let Facebook work it’s magic.
Hopefully, with your campaign delivering over 20 ‘add to carts’ per day (and Facebook is now optimising to this objective), it in turn delivers purchases, and may even bring in a lower cost per purchase as a result of Facebook auto optimising. So now your £550 daily budget might be delivering a cost per purchase of £25. Now 20 purchases are costing you £500 per day. So what can you do next?
Simple - now you can optimise to purchases, and let Facebook optimise your campaigns to purchases, now that you have 20 purchases in a 24 hour period.
This is a very simplistic way of looking at it, but is a genuine scenario we have experienced with many clients. Generally, an increase in daily budgets has seen an increase in conversions, and therefore more conversion data for Facebook to optimise to. And this is where things can start to snowball for your business on Facebook.
Have you had success with optimised bidding? We’d love to know what you think of the issues discussed in this article! If you’d like to get in touch or just share some content with us, drop us a line.Tags: facebook ocpm optimised bidding objectives comments powered by Disqus