Module 3 Lesson 5: Budget and Schedule 38
Social Media
Marketing
How does the auction system work?
Facebook uses an auction as a basis
for their ads system. The auction can
seem complicated, but it is important
to have general sense of how it works
before you create an ad and set a
budget.
Overall, when showing ads, Facebook
tries to balance two things:
Help advertisers reach their
prospective audiences
Make sure Facebook users have
a positive experience
To do this, they hold an auction that
takes both things into account. That
way, advertisers are reaching people
receptive to their ads and users are
seeing something they’re interested
in. The goal is to match the right ad to
the right person at the right time. This
is different from a traditional auction
because the winner isn’t the ad with
the highest monetary bid, but the ad
that creates the most total value.
The ad that wins an auction and gets
shown is the one with the highest
total value. Total value isn’t how
much an advertiser is willing to pay
to show their ad. It’s a combination
of 3 major factors: the advertiser
bid, the estimated number of clicks
or purchases (or other action)
the system estimates the ad will
generate, and the quality and the
relevance of the ad to the person
who will see it.
An auction takes place whenever a
Facebook user is eligible to see an
ad. The “participants” in an auction
are ads targeted to an audience the
eligible person falls into. Billions of
these auctions take place everyday.
To learn more about how the auction
works, see Resources.
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Resources
https://www.facebook.
com/business/
help/430291176997542