The ad auction, performance goals and bidding

How the auction works

A place for an ad is a gap in the home feed, a gap between clips or between people's stories, the top of search results, or a tile in Explore. Each time one comes up, the auction runs in a moment, while the screen loads.

Who takes part

An ad set takes part only when all of these are true:

• The ad account has money in its balance, is not on hold, and has not reached its spending limit.
• The campaign and the ad set are switched on, and it is inside their start and end dates and inside the ad set's days and hours.
• The budget (the ad set's, or the campaign's when it has a campaign budget) still allows spending at this time of day.
• The ad set uses this placement. For search results, the search must also match one of its keywords.
• The person matches the ad set's audience, or Advantage+ audience is on. Custom audiences you included or excluded always apply.
• The person has not yet seen the ad set's ads as often as its frequency cap allows.
• The ad is approved, the person has not hidden it or its advertiser, and the person is not on the advertiser's own ad account.
• If the ad set is part of an A/B test, the person belongs to its side of the test.

Who wins

Each ad set that takes part gets a value: its bid, turned into an amount per 1,000 impressions, multiplied by its ad's quality score. When Advantage+ audience shows the ad to someone outside the audience you chose, the value counts for less. The highest value wins. Each time ads are picked for a screen, one ad account can win at most one of the places.

Every placement has a reserve price: the lowest price per 1,000 impressions at which an ad may be shown there. An ad set whose value is below it does not take part at all.

What the winner pays

The winner does not pay its full bid. It pays just enough to have beaten the best ad from another ad account, never less than the reserve price and never more than its own bid. When no other ad is competing, it pays the reserve price.

Performance goals and results

The performance goal is what the auction tries to get you, and it decides what counts as one result in your reports. The goals you can choose depend on the campaign's objective. The first goal of each objective is the one a new ad set starts with.

For Reach and Impressions, every impression (or every new person) is a result, so the auction looks for the cheapest places to show the ad. For every other goal, Sikhami estimates how likely one impression of the ad set is to give a result. Until the ad set has results of its own, it uses a typical rate for the goal; the ad set's own results take over as they come in.

Follows, purchases and enrolments are credited to your ad only inside the ad set's attribution window. See Attribution window.

Impressions or link clicks: what you pay for

• Impressions (every goal): you pay the auction's price each time your ad is shown. An impression counts when at least half of the ad has been on screen for one second.
• Link clicks (CPC) (only with the Link clicks goal, under You pay for): you pay only when somebody taps your ad, and impressions cost nothing. The price of a click is the impression price divided by how often people tap the ad set's ads.
• Without a bid cap, one click never costs more than 20 times the reserve price of a single impression in that placement: ₹1 in the home feed, ₹1.20 in Clips, ₹0.80 in Stories and Explore, and ₹1.60 in search results. With a Bid cap, a click never costs more than your cap.
• You are never charged more than 3 times a day for one ad shown to the same person, and never for views by people on your own ad account.

Every other goal pays for impressions. A lead, a follow or a purchase has no separate charge.

Bid strategies

The bid strategy decides how much Sikhami offers for you in each auction. You choose it under Bid strategy in the ad set, or on the campaign when the campaign has a campaign budget.

For Cost per result goal and Bid cap, the amount is per result, except with the Reach and Impressions goals, where it is per 1,000 impressions. The field's label says which.

In the auction, a bid per result is turned into a bid per 1,000 impressions: it is multiplied by how likely one impression is to give a result. For example, a bid cap of ₹20 per link click, for an ad set where about 1 impression in 100 gets a tap, is worth ₹200 per 1,000 impressions. If the amount works out below the placement's reserve price, the ad set does not take part. This is the most common reason why a low goal or cap stops an ad set from spending.

When a campaign has a campaign budget, its bid strategy applies to all its ad sets. If it is Cost per result goal or Bid cap, you still enter the amount on each ad set.

In the Android app

The strategies are chips under Bid strategy. When you pick Cost per result goal or Bid cap, a line under the amount shows a typical cost for the goal and warns that too low a bid may not deliver. On the campaign step the shared budget is called Advantage campaign budget.

Quality ranking

Every ad has a quality score from 0.5 to 1.5, where 1.0 is average. A new ad counts as average. Once an ad has 500 impressions in the last 7 days, Sikhami works the score out every night from how often people tap it compared with other ads, and lowers it when people hide or report it.

In the auction the bid is multiplied by the score. An ad with a high score can win with a lower bid and pays less; an ad with a low score must bid more to win the same places.

The Ads Manager shows the score as Above average, Average or Below average: in the Quality ranking column of the Ads tab and in the results panel. In the Android app, an ad's insights screen also shows the score as a number.

A clear picture, a headline that says what the learner gets, and a button that matches where the tap goes usually earn more taps, which raises the score.

The learning phase

A new ad set is learning until it has 50 results. While it learns, the auction is still finding out which people respond, so its cost per result can go up and down. Its delivery shows Learning, and the results panel shows a Learning phase bar with the number of results so far.

Learning ends when the ad set reaches 50 results. Sikhami counts results from the start; editing the ad set does not reset the count. The Ads Manager still suggests avoiding big changes (audience, budget, bid) while an ad set learns, so that you can tell what made a difference.

With a goal that gives results often (Reach, Impressions, Video views), learning ends quickly. With Purchases and enrolments or Leads it can take much longer, and a small budget may never reach 50 results.

Why an ad set is not spending

• Check its Delivery first. In review, No funds, Scheduled, Paused and the other states are explained in The Ads Manager.
• The bid is too low. With Cost per result goal or Bid cap, an amount that works out below the reserve price takes part in no auction. Raise the amount, or switch to Highest volume.
• The audience is narrow. If the Audience size box says so, remove a choice or turn on Advantage+ audience. See Ad audiences and targeting.
• There are few places. With Choose placements, only the places you ticked are used, and search results need keywords that people really search for.
• The hours are short. A daily budget is paced over the whole day, so an ad set that runs only a few hours a day may not spend all of it. See Days and hours.
• The frequency cap is reached. Once everyone in a small audience has seen the ads as often as the cap allows, the ad set waits.
• The ad's quality ranking is Below average, so it needs a higher bid to win.
• Other advertisers offer more for the same people. A higher bid or a wider audience helps.

Questions