The Bid Process and Web-Based Social Media Ads

As I explained in Chapter 6, social media sites use a bid process for online ads. You can bid any PPC or CPM amount you wish to pay for your Facebook or LinkedIn ad. But, in general, if the social media site is displaying more than five different ads toward a target demographic, the site will serve only the ads that represent the five highest bids.

Fortunately, you don’t have to guess. The ad campaign setup tools on Facebook and LinkedIn give you bid suggestions. When you post an ad on either site, you’ll get a bidding range of the top five bids for your target audience, based on what other marketers are posting to that demographic. This bidding range gives you an idea of the PPC rate you need to bid in order to make sure site members in your target audience see your ad.

For example, say you are posting an insurance ad on Facebook, aimed at retiree homeowners who live in the Atlanta, Georgia, area. Any ads targeted toward those demographics will be displayed during the time those users are on Facebook. But Facebook will display only the ads with the highest PPC bids because, of course, Facebook wants to get paid the greatest amount of money. The cutoff will be the PPC cost for the lowest of five bids. If you bid a PPC amount lower than the fifth bid, chances are that your ad won’t be displayed.

But Facebook’s ad tool may suggest a bid range of $2.08–$2.54 for your insurance ad. So the highest bid for ads to your demographic is probably about $2.54, and the lowest is about $2.08. If you can afford to enter a PPC bid that is higher than the highest suggested bid (e.g., $2.60), you will almost guarantee that your ad will be the first one shown to users in your demographic.

If you enter a PPC bid that is only slightly higher than the lowest suggested bid (e.g., $2.15), chances are still good that your ad will be displayed to users in your target demographic. But it may be the last ad served to those users. Obviously, the higher you bid, the better you will position your ad to your target audience.