Having the right bidding strategy will ensure you achieve the right outcome, such as increased sales, brand reach, etc. Facebook offers bidding based on spends, goals, and manual, which are explained below.
Cost Cap (Goal based bidding)
Cost Cap allows you to keep your overall costs within a specified limit. Rather than having to manually adjust your campaign bids, Facebook will automatically do this for your campaigns so as to maximize the volume within your target CPA or CPI.
Compatible with the following campaign objectives: Traffic, app installs, event responses, lead generation, offsite conversions, and catalog sales with the following ad delivery optimizations: landing page views, link clicks, page likes, post engagement, replies, video views, and catalog sales with link click offsite conversions.
Minimum ROAS (Goal based bidding)
This bidding strategy requires interaction between Facebook and your website regarding conversion values. The value optimization strategy is used to achieve the desired return on ad spend. Many advertisers will have lofty goals for their ROAS, but if you set your target too high, you’ll end up seeing under-delivery while using this bidding strategy.
Compatible with the following campaign objectives: App installs, conversions, and catalog sales.
Bid Cap (Manual bidding)
Bid cap bidding strategies are managed by advertisers and require a more hands-on approach than auto-bid strategies. This strategy requires that you set a specific bid you want to target and it will run your ads accordingly to maximize the volume at that specific bid amount. Basically, you are controlling your bid in each individual auction. It can help you be competitive against other advertisers targeting the same audience, but it can be a tedious process that requires a lot of manual data reporting since your actual costs may differ from your target bid.
Compatible with the following campaign objectives: Reach, traffic, engagement (post engagement, page likes, event response), app installs (installs, events, link clicks, video views), video views, lead generation, messages, conversions, and catalog sales.
The Lowest Cost (Spend based Bidding)
This is the auto-strategy fully managed by Facebook. It’s widely used by beginners because there isn’t much need to fully understand the intricacies of the bidding systems and options. This bidding strategy will use your entire budget and will focus on achieving the lowest cost opportunities. This is the go-to Facebook bidding strategy for most of your campaigns!
Compatible with the following campaign objectives: Brand awareness, reach, traffic, engagement (post engagement, page likes, event response), app installs, video views, lead generation, messages (excludes sponsored messages), conversions, and catalog sales.
Highest Value (Spend based Bidding)
Similar to ROAS campaigns, the highest value bidding strategy is meant to drive the maximum return on ad spend. This can be used if you’re not sure of your minimum ROAS or bid amount. This bidding strategy is Facebook managed for a more hands-off approach and will almost certainly spend your full budget. Again, this bidding strategy can only be effective if there are clear and accurate conversion values set for your campaign
Compatible with the following campaign objectives: App installs, conversions, and catalog sales.