Are you still unsure about how Facebook ads work? Do you double question your audience targeting criteria and bid value because you’re not sure you’ve hit the magic formula? Then you are in good company, because many marketers wonder about the same things. And this uncertainty feeling became noticeable to the Facebook Team. Thus, they decided to come up with some detailed information on how their ad system works.
Facebook Ads behind the Scenes: Introducing Machine Learning
As you must have noted after years of running Facebook ads, the entire system is automated. AI is running the bidding system and identifying the users who are the best match to your selection criteria.
AI (artificial intelligence) uses machine learning to become more sophisticated and accurate in its decisions. It is not different from the way children learn to speak, read and write. In the case of Facebook ads, the AI relies on the huge data collected from the way users interact with the app or desktop version.
Thus, when you set an audience for your Facebook ads, the AI uses the information to predict which users are likely to interact with your ads and include them in your audience. Of course, the system is still not perfect, but the Facebook Team says that they keep working on it.
What Factors Determine Who Will See Your Facebook Ads?
Now, AI is simply the tool that performs the task. And this task (selecting the audience who will see your ads) is determined by an algorithm. This is what you really want to know – how this algorithm works.
Facebook explains that there are two key factors involved in the ad delivery algorithm:
- Audience targeting
- Ad auction process.
We will now share the detailed the explanations provided by Facebook for each item.
This is the part of the algorithm that marketers fully control in creating Facebook ads. As you already know, you can create custom audiences or lookalike audience based on your email list or Google Analytics insights on website visitors.
Ad Auction Process
This is where things get a bit murky. Once you set your bid value and created your Facebook ads, they move to the auction process. In this process, the AI calculates the total value score of your ads to determine who will see them.
The formula for this score as explained by Facebook is:
Total Value = Advertiser Bid x Estimated Action Rate + Ad Quality
Out of this formula, marketers control the first and last elements. The higher your bid, the greater your chances of pushing your ads in front of a qualified audience are. At the same time, now you see the importance of ad quality, meaning:
- Eye catching visuals
- Great copy
- 100% compliance with the do’s and don’ts of Facebook advertising.
What Is the Estimated Action Rate?
This is where Facebook literally holds the scales and decides to what side to tip them. The estimated action rate relies on AI and machine learning (as explained above) to determine how likely users are to interact with your ads.
The Facebook Team gives the following examples of pointers it uses in determining estimated action rate:
- The user’s behaviour on Facebook, including post liking and clicking on ads;
- The user’s behaviour off Facebook, including app installs, product purchasing, and website visits.
The explanations for how the bidding system for Facebook ads works are quite transparent, but not 100% helpful. However, just like any platform owner, Facebook can create and enforce its own rules. As for marketers, they can make sure that they play by the book and use all the data and know-how they have to create qualified audiences and set realistic Facebook ads budgets.