Marketers have two choices in Facebook ads bidding; use automatic bidding (Facebook’s default setting), or choose between three bidding strategies: highest value or lowest cost, cost cap, and bid cap.

We touched base with Pilothouse’s FB ads wiz Nate to talk us through the difference between auto and manual bidding and how to activate these different strategies. 

What is Auto Bid? 

• Facebook’s algorithm works to find you the lowest cost per objective you’re optimizing toward. It activates Facebook’s intelligence to maximize your budget, defaulting to the lowest cost per conversion. 
• You’ll want to use Auto-Bid if you’re new to Facebook advertising, trying to determine benchmarks for your ad objective costs, or if you have a limited budget that you’re looking to maximize.
• We find that this is also the most scalable bid strategy.

What is Manual Bidding? 

• Facebook’s manual bidding strategies let you set a cost control against an objective you’re looking for. You set a cap on how much you’re willing to speed on conversion or objective, and Facebook uses your budget to achieve these goals. Manual Bid alters how Facebook uses your budget and can be activated to manage campaign costs and be more competitive. 
• With Cost Cap, you give Facebook the cost per result (in most cases purchases) that you want to stay under - a good option if you need to stay within a certain cost threshold. The downside is that you may not attain your target conversions as Facebook will try to find conversions that sit within your cost cap and may not spend your full budget. 
• With Bid Cap, you’re capping how much you’re willing to spend in any given auction. This strategy isn’t a favourite, but it can increase your competitiveness in customer acquisition. Also, this is another instance where your full budget may not be spent. 

Manual v Auto - What should you be using? 

Both! Cop out answer, we know. BUT it’s genuinely important to test all bidding strategies to find winners. 

Nate estimates that approximately 90-95% of his budget goes through the default bidding strategy. He saves that extra 5-10% for testing manual strategies.

If a campaign performs exceptionally well, he’ll build out a duplicate campaign and test it with different bidding strategies. This is an excellent way to scale horizontally. 

The main reason to override auto-bidding is to make sure you're covering all bases. Although most of your volume will come through lowest-cost campaigns, it's good to have alternate bidding strategies running to pick up conversions you may not have gotten if using only Lowest Cost (because you may not have won the auction with that strategy).

Nate also suggests that manual bidding is best explored for lead generation rather than e-commerce. Lead generation has fewer factors in play than instances where you’re pursuing an actual sale, so CPA is usually lower and target costs are easier to attain (which means different bid strategies have an easier time spending budgets effectively).

Also - there’s minimal downside to testing manual bidding if done correctly. Since the Bid Cap and Cost cap often have trouble spending your full budget, you should know fairly quickly whether or not the strategy will work (and if the budget is spending fully and not hitting targets, lower your caps). 

Bottom line: Never not be testing. YOU HEARD ME. It’s always worth testing different strategies, and worst-case scenario, you won’t spend too much money if your campaign isn’t working as Facebook won’t spend your full budget. Sometimes these explorations really pay off - you don’t want to miss out.