For those of you that are lazy and want a straight answer, I’ll just come right out and say it. Manual bidding is better. For those of you who care to learn a thing or two and don’t just want to take the easy way out, I encourage you to continue reading.
If you have ever built a single Facebook ad then you might be wondering what the difference between manual and automatic bidding is. If you are a more advanced user of the platform then you might wonder which approach is better. As you read on, you will find an answer to both of these questions.
Whenever Facebook wants to deliver an ad, an auction occurs first. The reason behind this is because thousands of different advertisers want to deliver their ad at the same time. So, instead of filling their users’ feed with all those ads, Facebook runs an auction to determine which user will get a certain ad. This is where the manual and automatic bidding come in.
The first and the most common strategy is to choose automatic bidding. This strategy is more convenient because of its set-it-and-forget-it approach. Automatic bidding does exactly what it sounds like. Once you set it, Facebook’s algorithms will take over and automatically adjust your bid to what will get you the lowest CPCs and CPAs. However, this approach has its pros and cons.
The pros of automatic bidding are that it is low maintenance and consistent. Facebook’s algorithms are very good at their job and will generally get you low CPCs/CPAs and keep those numbers steady. On the other hand, the cons are that your CPCs and CPAs could be lower than usual. Sometimes much lower.
This brings us to manual bidding which can get a little complicated. This strategy allows you to tell Facebook how much you are willing to spend to get the desired result of your campaign objective (conversion/click/post engagement).
The first option is Average. When choosing Average, you are telling Facebook that you only want to spend X amount, give or take, per action, and Facebook will keep you around X.
The other option is Maximum. By choosing this option, you are telling Facebook that you don’t want to spend anymore than Y per action, and Facebook will deliver your ads keeping your costs below or right at Y.
No matter which option you choose you will get almost the same results according to my experience. What will really change your CPCs/CPAs is your bid. When you initially choose manual bidding Facebook will recommend you a certain amount and your first instinct might tell you to go with whatever Facebook is telling you. I urge you to reconsider.
Facebook’s recommended bid is generally very low and it won’t produce good results. This is because if you set your bid too low then your ad won’t “win” that frequently in those Facebook’s auction I mentioned before. This means that your ad won’t be delivered to many people, and as a result, you will make little to no sales, engagement or clicks. Setting your bid low will actually be less beneficial and more will cost you more in the long than choosing the automatic bidding. Your goal is to avoid this all together.
Contrary to what you might believe, it is for the best to set your manual bid high. According to a case study, you will find the best results if you set your bid at 10x Facebook’s recommendation. By doing this, your ads will be delivered to a lot of people. Luckily, Facebook’s algorithms are still smart enough to make sure that your ads are delivered effectively and that they do not completely tank your budget. In reality, according to the case study, you can expect to see a 16% lower CPA and CPC with this approach compared to automatic bidding.
To recap, the pros of manual bidding are that you have a lot of control over your budget and if you are trying to keep your CPA within a certain range then this is the way to go. The cons are that you can do more harm than good if you bid too low, making manual bidding more “risky.” In order to find the right bid there will have to be some testing and learning.
So what did we learn from this article? Well, when it comes to manual bidding, it will (eventually) give you better results than automatic bidding, but there is a learning curve and a lot of testing to overcome. In the beginning, it might cost you a little more money to learn how to properly use the manual bidding strategy, but it will pay off in the long run, so I encourage you to run some tests and try it out for yourself by using some of the tips from this article.
Chad Keller COO/Founder of Growthstackers