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Facebook Ads Bidding

Article Link: https://adespresso.com/blog/everything-need-know-facebook-ads-bidding/

This article discusses the methods Facebook uses with its advertisers for determining ad prices as well as which ads they ultimately end up showing to their users. It first explains the reasons for holding an auction. Essentially, there are far more advertisers than there are ad slots on the website, and so in order to determine which ads get the slots Facebook holds auctions and the highest bidders get the most slots. There are more components to your bid than the actual price however, relevance score and estimated action rates are also factored in to choosing a bidder.

This material is clearly related to what we have been studying in class with the different types of auctions as well as click through rates. The article mentions the same general approach for advertisers/bidders as well: If you bid too low, theres a lower chance of winning. If you bid too high you’ll end up paying too much and having a negative payoff.

The article discusses several different types of bidding that can be done. Cost per mile is where you bid how much you are actually willing to pay for 1000 ad impressions. Cost per click allows you to bid for clicks which is similar to the click through rate we use in class.

Overall, this article was interesting and a nice complement to what we have learned in class.

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