Traction and Scale - Bidding Strategy & Budgets

Learn How to Scale Your Facebook Campaigns with Manual Bidding


1. Why manual bidding scales faster and farther; Average/Target cost.

2. Setting your bid ranges (companion labs); setting daily budgets.


Nuts and Bolts of Manual Bidding

All right, in this video we're going to go through the nuts and bolts of manual bidding. We've already kind of introduced some of the differences between automatic and manual bidding. We've already kind of let the cat out of the bag that we believe manual bidding to be kind of your ideal strategy for scale. We're going to walk through some of the nuts and bolts of how to do that. We'll also have some kind of supplementary video for you that goes into using some of the tools that we use to do this even easier, but let's keep that out of this one for now. Let's stick to the strategies and concepts here.

Automatic Bidding

Okay, so just to rehash a little bit, when we're talking about automatic bidding, we're talking about Facebook taking a daily budget that you've allocated and trying to spend it in the most optimal way possible, but at the end of the day, like, they're going to spend the money that you give them. If you give them $100, they're going to do everything they can to deliver that $100 and you'll spend it.

Manual Bidding: Balancing Act

Manual bidding on the other hand, is giving you a lot more control over how much you spend for the results that you want, okay? So, let's dive in. Really when it comes down to manual bidding, we are really trying to develop this balancing act, right? It's kind of like if you picture the seesaw you played on as a kid. We're really trying to balance two things with manual bids.

CPA: Cost Per Acquisition

In the first one is your CPA. These are the costs of the results that you're trying to get, and then deliverability. Getting your ad actually to go out and win auctions because if you remember, like we're in an auction, and so at different bid levels you have different opportunities to win auctions. If you bid too low, you're not going to win any auctions, Facebook's not going to show your ads to people. If you bid really, really high, you're definitely going to get into all the auctions, but your CPA might be higher than you want.


So really at the end of the day, what we're trying to do is find a really nice balancing act between the deliverability and the cost. If you can have like a hundred percent or really good deliverability and you're winning enough auctions to get plenty of volume, there's a path to scale, and if your CPA is low enough that you can do that profitably, now you're just printing money. Keep this in mind. Keep this little diagram in mind. We're going to go through some scaling strategies for manual bidding, but at the end of the day, whatever we're doing, this is the goal that we're trying to achieve.

Manual Bidding VS Automatic Bidding

Okay, one thing I really want to highlight about manual bidding that's significantly different than if you're used to just automatic bidding, is that when it comes to how much money you spend in ad spend, it's really the bid that's controlling that, rather than what you allocate as a daily budget.

one hundred dollar bill   Google Search

So let's use that $100 figure again as an example. In automatic bidding, if you use $100 daily budget, Facebook is going to be pretty darn close to that. Maybe a little bit under, maybe a little bit over, but they're going to spend $100. In manual bidding, if your bid is too low, maybe you're only going to deliver at $50 of that hundred. Maybe you're only going to deliver at 10, or maybe even zero if it's really, really low because you're not winning the auctions in order to spend that money. This is a key principle that we have to keep in mind is that it's not so much the daily budget that you're allocating to the ad set, as much as it is the bid that you're using in the ad set and telling Facebook what they can spend per result, okay?

Manual Bidding Strategies

Let's get into some of these strategies here on how you can scale. There's really a few different approaches here. Again, just kind of like the tenor of the course here, as we've said in the beginning, there's no one way to do this, right? There's definitely multiple ways that people have been successful. This is just something that makes sense to us, and something we've seen work.

The Climb

With that said, let's call this first one the climb, okay? The climb is when you're setting a lower manual bid and you're going to see and measure really what kind of deliverability you get. At a lower manual bid, we're trying to say, "Okay, Facebook, how many auctions are you going to win for me?" right, and, "How well do those convert?" And then, if you aren't getting the results that you want, you're going to raise that bid, right? So again, you're not raising budgets. Your budget's staying fixed, but you're raising the bid to see how that starts to dial in the seesaw, okay? You're dialing in things like CPA and deliverability.

walking up stairs   Google Search

If you're not getting close to that point of kind of equilibrium where you want to be, then raise the bid, right? Raise the bid, raise the bid. The climb is a little bit more of a conservative strategy. If you don't have a lot of budget to spend to learn, and you're really kind of on more of a shoestring budget, or you just don't have great margins, you're going to want to probably embrace the climb strategy, because you're dipping your toes in the water, right?

The Walk Down

Now, the other strategy here is a walkdown. So this is really the opposite. This is when you're starting out at the high end of a bid. So you're saying, "Facebook, I want to come in. I want to win every auction I possibly can because I want to see what kind of CPAs I can get right out the gate." Now, chances are if you bid high enough, you're going to get all the deliverability that you want, but your CPAs may not be where you want them to be. You might be losing money per sale, or just not at the optimum profitability that you want to run at. The walkdown is you're going to step down those bids, bit by bit, to see if you can balance the seesaw back to where it makes sense, okay?

balanced seesaw   Google Search

Now, there's some variations of this philosophy where others have tried to come in and just bid high for a long period of time to push people out of the auction all together, and then naturally once you occupy that space you can own the entire market so to speak. That takes usually a lot more money to do, so we're not including it as a recommended strategy here, but we also know that people have had a lot of success with it.


That said, we have the climb, we have the walkdown, and then what we really recommend is this one called range, right? This is the range strategy, where if you picture these little tick marks as manual bids that you're running in parallel to each other at the same time, your goal is to bid from kind of a low to a high bid, and everything in between, and basically start cutting out the things that aren't working for you, and you're trying to like, kind of manually balance in the seesaw.

So, for instance, you can see we're running all these different bid ranges at the same time and now we realize that you know, the low bids, the really low ones, they're just not working for us. We crossed those out and now we're just running these ones, and then in the next round of revision we realize the high ones, they're getting us great deliverability, but the CPAs are really junky, so then we kind of eliminate those.

The range is about kind of pruning, nipping, and tucking, but the benefit here is that you're learnings may be coming faster, okay, because you're duplicating these ad sets at the same time and you're running these things simultaneously. You're really testing different points of the auction at the same time to see if you can more quickly kind of dial in where that seesaw needs to be, whereas in the climb or the walkdown, it might be a little bit more conservative, or you might be able to get a lot of results quickly. It can take longer to arrive at that point of equilibrium, kind of the sweet spot of where you want to be. We like the range strategy and we found it to be really helpful when we're trying to dial in that balance.

How Much Should You Bid?

Okay, let me pause there because we've been talking about a range of bids, but where does that come from and what should you bid? All right, so, typically what Facebook will do is they're going to give you a suggested bid range. On average it usually ends up, for some reason, coming down to $30. That's like their default suggested average bid to win enough auctions for whatever result you have, but obviously you've got people that are bidding on really, really small conversions, and you have people bidding on really high ticket types of products that they're selling.

In aggregate, it's kind of this unhelpful number, but really what's happening is when you're testing out your bid ranges, you kind of want to bid along the spectrum of these suggested bid ranges that Facebook gives you, right? Let's just, for sake of simplicity, say it's between 15 and 45 dollars. At the low end, you're going to set your bid at say $15, and then at your high you're going to be at the like $45, so just write that down, 45, and then right here in the middle you have kind of that $30 recommended bid.

Spread Across Multiple Adsets

Now, again, in this range strategy you're going to see early on, and maybe some of these low bids, they're just not getting nearly enough deliverability and if your goal is to scale, then you sure as heck aren't going to really be able to do that if you're only spending two dollars a day, or five dollars a day, so you cut it. Same time, the high ones, you're losing money on every sale, cut those. We like to spread ... and it just depends on your budget, but we like to spread across you know, maybe between 10 and 15 different ad sets this range of suggested bids to test the auction in these different places.

Now, I want to address a couple of things here. What I've just recommended to you, is to take whatever kind of winning ad set that you have. It could be on automatic bidding already and then duplicate it multiple times using different manual bids. You might be saying like, "Well wouldn't that compete ... Wouldn't I be competing against myself in the auction?" Yes. Yes, you will, but the idea is to not do this forever, right? Your idea is to do this for a short amount of time, and Facebook is pretty good about making sure that your ads aren't delivering to the same people within the ad set, right, so that you're not burning people out, or you're not competing too bad with yourself. They do a pretty good job of that. If you want to check that ever, you can click on Delivery Insights under the ad set once it's reached 500 impressions, and you can see the amount of overlap that's happening, but enough said there.

Yes, this technically is happening, but it won't hurt you in the long run, and your audience is probably big enough that it's not going to be a substantial issue. So, we're advising to duplicate these ad sets, you know, between 10 and 15 times across the bid range, and then be very, very active about your monitoring of the seesaw act, right?

Shift Strategy to Climb or Walkdown

As you get to maybe a cluster of a few ad set, you've shut off these other ones that aren't working. This is when you can kind of revert now to like a climb or a walkdown strategy because you've arrived at the balancing act much faster, and you know as the market changes you may need to make some adjustments up or down, but there's probably going to be a pretty set range here where you can play with your bid range to be winning consistently and having max deliverability.

This is when it gets fun because you've narrowed down what you've got to pay for to get the reach that you want and because the bid is what's controlling the spend, not your daily budgets, your CPAs, or your costs of getting sales, aren't as affected by increases in budget or increases in spend. Why? Because if you've dialed in, what the right max or what the right manual bid is, and you have set yourself a really kind of high daily budget, your daily budget is just going to spend as long as it's profitable for you, right?

A lot of times we're recommending people to actually take maybe 5x or even 10x, and this is actually what Facebook recommends too, to use five to even 10x the actual cost per conversion as your daily budget, or your bid because what it's going to give you is a ton of runway.

So let me just take a wild example. What if you set a $10,000 daily budget, and you had a bid that was really winning at right around $30 a conversion? Well, it's going to spend, spend, spend, spend as long as the average is coming in around 30 bucks, but the minute that this starts to go too far outside of the threshold of where Facebook can reliably deliver on that kind of promise of giving you an average cost, it's going to stop spending. This is when, when you lock in what that sweet spot is you figure out kind of what that range of manual bid is that's going to get you the perfect balance. You can really just let it rip on the daily budgets because you're not going to be spending when it's not profitable.

Now, over time, and it can be a short period of time if there's a smaller audience, you are going to run into the issue of ad fatigue or audience decay, right, where people are getting tired of your message, or they're getting tired ... they're tuning out your creative, so don't think that you're immune to those things, right, but the idea that you can scale much, much quicker with manual bidding, it really boils down to the fact that you have some stopgaps in place here.

Maximum Bid Caps

Now, if you wanted to get even more conservative, you could use the style of manual bidding, which has now been folded in to automatic bidding using like a max bid cap and never spending over a certain amount, but we find that it really does limit your volume and you're only going to be able to scale to a certain point. You want to rely more on that average cost model that Facebook is using to, on the whole, give you that balanced average return.

Test a Range of Bids

Let me just recap, because I know we went kind of quickly through some things. We covered a lot, but what we recommend at the end of the day to try to get to the balancing act, to try to get to that optimal balance between CPA and deliverability, we recommend testing a range of bids along the recommended kind of spectrum of bids, dialing it down to the smaller range of bids that's going to work, and then let your daily budgets go high as you want.

You know, obviously you don't want to outspend what you have. There are mistakes that can happen. You want to watch this closely, blah, blah, blah, blah, blah, disclaimers, but on the whole, you can use like a higher daily budget for these campaigns, you know, even between five, 10 plus X what your bid, or what your kind of target conversion cost is.

Test It Out 

So, test this out. We're going to have another video that walks through some tools that we use that actually creates some automation here and makes this process a lot easier. We use a tool called Companion Labs to do that for us and kind of automate some of the busywork and reporting that you would need to do to manage this especially across multiple campaigns, but give this a shot.

This is also why we think that this can coexist peacefully with automatic bidding. We'll oftentimes use automatic in the early days just to get traction to dial in the right creative and let Facebook manage that spend for us, but when we want to really grow an ad set beyond $1,000 a day or even higher, then we're going to more of a manual bidding strategy using one or all of these methods that we've covered today.

About the Instructor

Josh Sturgeon, Co-Founder

Clean & Elegant
Fully Responsive