I wanted to write this post to SIMPLY discuss how the Facebook ad auction works in a way that most people, and not just experienced marketers, can understand. Lets first break it down:
The above is a picture from Facebook detailing how the ad auction works. It’s what’s know as “BEAR”.
First part is the Bid (B): It’s pretty straight forward – How much are you bidding in the auction (and versus competitors) to have your ad shown to the audience you’re targeting.
Estimated Action (EA): This is the part where Facebook predicts how likely is it that the people seeing your ad will take the action you’re optimizing for (ex. purchase, add to cart, watch your video, etc). After 8,000 impressions, Facebook has the data whether it’s prediction is correct or incorrect. In other words, whether your ad works or doesn’t.
What most people don’t know is that this also takes into account your ad account history, campaign history, Facebook page activity and history, etc. This is super important! The quality of your ad account, your Facebook page and how you’ve been running all those play a role in the auction.
R is for Relevance: This is the User Value part of the algorithm (see above picture). When Facebook first released the BEAR formula to the public, it was assumed by marketers that the “Relevance” part meant “Relevant Score” (a rating on your ads that you can see in Ads Manager). However, we now know that’s not the case.
What’s the difference? For starters, “Relevant Score” is calculated after the auction and after the ad has been served. It’s the result of the ad creative. Then it feeds back to the “Estimated Actions” part and helps Facebook optimize the ad. This is again is SUPER IMPORTANT.
“Relevance” is measured by post click experience. Is your website loading speed slow? Do you have a high bounce rate? Is the page you’re sending them to relevant to the ad and audience? Your website deeply affects how your ads will perform.
If you’re running ads, here are some tips to improve your “Relevance” factor:
As you can see, it’s not ONLY about the ads and inside the ads manager. Facebook is trying to make sure the User Experience (UX) is a great one therefore penalizing ads that don’t give its users a good and positive experience… even OFF the platform.