Breaking down the Facebook auction

Abstract

This paper discusses both the theory behind the Facebook auction and how it works in practice. It details the component parts of the Facebook auction with particular focus on the aspects that advertisers can affect. The purpose of this exchange is to maximise the benefit to consumers. This can serve as a simple heuristic when advertisers make decisions, but it is also a nascent platform where all users are constantly learning. With this in mind, this paper provides guidelines on what to do when the received best practices simply do not work as expected. This applies to all three areas of a successful campaign: audiences, bidding and creative. The reader can expect to take away from this paper: a deeper understanding of how Facebook matches adverts to audiences; lessons taken from real-world scenarios and campaigns; free tools to use to maximise the impact of campaign creative; performance benchmarks for specific Facebook metrics; and solutions to some of the most common problems advertisers face today.