How does the Meta ad auction work?
Every time someone on Facebook, Instagram or another Meta app could see an ad, Meta runs an auction to pick which ad to show. The winner isn't simply the highest bidder: it's the ad with the highest "total value", which mixes your bid with how likely the person is to act and how good your ad is.
ShoaibUpdated 3 min read
Which ads compete in each auction?
Meta's help centre explains that the same person can fall into many advertisers' target audiences. When there's a chance to show that person an ad, every ad whose audience includes them is eligible to compete.
How is the winner decided?
Meta says total value is a combination of three factors, subject to a minimum price (price floor):
| Factor | What Meta says it means |
|---|---|
| Bid | What you're willing to pay to get your result |
| Estimated action rates | The probability that showing your ad to this person leads to the result you want |
| Ad quality | Measured from people's feedback (viewing or hiding the ad) and checks for low-quality signs like withheld information, sensational language and engagement bait |
Meta adds that estimated action rates and ad quality together measure ad relevance, so a more relevant ad can beat ads with higher bids.
What does this mean for my ads?
- Better ads can cost less. Since relevance is part of the score, a creative people actually want to watch competes better. See what makes a good ad creative.
- Bait doesn't help. Meta notes that clickbait and engagement bait do not improve ad performance.
- Pick the right goal. Estimated action rates depend on the result you ask for, so choose the right campaign objective.
- Watch your costs. If your CPM and CPC climb, weak relevance is one thing to check alongside competition.
Want campaigns built to win more auctions for less, as part of your digital marketing? See our Meta Ads service.