Facebook delivers ads from millions of brands to billions of users daily. It aims to show users the right ad for the right product. This is how they give value to both the users and brands. For users, it gives them a better experience through personalization. For brands, it helps them create affordable ads to grow and create more jobs. To explain how the platform decides which ads to show people, it posts an update entitled “Good Questions, Real Answers” this 11 June 2020. Such a post is about Facebook’s new overview of how ads work.
Facebook’s new overview of how ads work listed two factors that affect ad decisions:
- the advertiser’s actions to place an ad;
- the use of machine learning for ads review.
The 2 Factors Affecting Facebook Ads Decision
First, the advertiser makes 3 important decisions when placing Facebook ads. These are the target audience, their business objectives, and the bid price. Brands can choose their target audience through the user’s interest, age, and gender. They can also provide info of their old customers that they wish to include. Then, they’ll choose from different objectives which commonly are building awareness, increasing traffic, and driving purchases. Afterward, they’ll place a bid. This is the amount their willing to pay for someone who sees their ad to complete their chosen objectives.
Second, on the ad review, Facebook uses machine learning to estimate how users will complete the advertiser’s objectives. When a user searches for an ad or feed, Facebook initially gathers the ads that include the user as a target audience. It then proceeds to the auction stage. This is where the platform chooses which ad to show the highest total value based on the user’s interest. Such a step is done by adding the advertiser’s bid, estimated action rate, and ad quality. The system assigned high-estimated action rates based on the user’s activity on their news feeds, off-Facebook actions, related actions of other users, and even the time of posting. For ad quality, Facebook rating depends on their quality guidance scoring and feedback from users who’ve already seen the ads.
As such, a higher bid doesn’t guarantee an ad placement to win. What weighs more is its action rate and quality. This new overview of how ads work highlights that machine learning makes bid decision objectively. It also shows that Facebook does not sell user’s data to advertisers. They provide brands with general data and not individual ones.
Implications for Marketers:
Facebook’s new overview of how ads work showed that the platform’s ads are highly targeted. With the use of very large demographics, its a powerful marketing tool. Also, it’s the most affordable. Marketers can target their audience based on demographics and interests. Plus, they can set their objectives and budget based on their preference.
As action rate and ad quality weigh more on ad bid reviews, marketers should take advantage of A/B testings. This is to create powerful messages that do more than presenting a product or service. They can also experiment with narrowing their target audience to meet business objectives.
