Maximize Your Campaign Results with Facebook’s Cost Cap Bid Strategy

Dec 19, 2019

Facebook’s Cost Cap Bid Strategy

“Cost cap simplifies campaign management and helps you focus on scaling volume of results while controlling costs. Unlike other bid strategies that help optimize for cost, cost cap enables you to set the max CPA/CPI you're willing to pay for results, reducing complexities in managing bids while maximizing your campaign results.” – Facebook

About the Bid Strategy

The Facebook ad uses the Auction format to distribute the Facebook ads . There is enormous scope for marketing using Facebook ads. The bid you make to reach the user will be partially dependent upon the cost you spent to get the user. In most cases, Facebook ads automate the bid, which is the default option by Facebook. That is the basic Facebook bid strategy. To control the costs, Facebook advertisers can choose to bid manually. The manual bid is set on the primary goal to get the cost per the desired action, which is a typical conversion.

Lowest costs and Target are the two bids that Facebook ad usually offers and of course, these two options perform differently.  It is entirely up to you what Facebook bid strategy you are going to use, which Facebook bid strategy to use when it also depends upon the complete and clear understanding of the results you are expecting out of the Facebook ad campaign.

To strike a balance between achieving optimum results and staying cost-friendly, Facebook is one social media platform that has given us a new way to make the most out of our bids by introducing the cost cap bidding strategy. 

Earlier, Facebook's bid strategies were either centered on maximizing conversion value or cost predictability, and there wasn’t a ‘middle ground’ to ensure both. To bridge that gap, Facebook has launched the cost cap bidding strategy, so that users are now able to combine both the features and get the most out of their ad campaigns.

Lowest Cost Bidding Strategy

Formally known as Automatic Bidding, the Lowest Costbidding strategy designed by Facebook gets the lowest cost possible per optimized event while spending the entire budget.

The benefit of using a low-cost bid strategy among the Facebook bid strategy is that it’s very efficient. In the short term of a span, Facebook tries to give you the lowest cost per event.

Achieving the low-cost bids might be short-lived and is the only major drawback the lowest bidding strategy has.

The results may be unstable depending upon the amount you spend or the competition.

So How Does It Work?

What separates cost cap bidding from other cost-optimized bidding strategies is that it allows advertisers to set the max CPA/CPI they’re willing to pay. 

To start with, the cost cap bidding is accessed through an updated, guided bid experience. 

For instance, if you’re looking to grow your business through app installs, subscriptions, or purchases within a specific cost per action, then this bidding strategy is perfect for you. By enabling this feature, you will be able to set a ‘cap’ on these actions, so you don’t waste your budget on just a few high-priced conversations.

After your campaign goes live, Facebook will look at leads that are below or at your max cost per optimization event. This will be the key differentiator between your current cost and target cost, maintaining the consistency of your budget for the entire campaign lifespan, regardless of if there are lower-cost opportunities available. What this does is give you more control over what you spend per conversion. 

Target Cost Bid Strategy

Previously known as Manual Bidding, it is only available for the following campaign categories:

  •  App Installs
  • Conversions
  • Lead generations
  • Catalog sales

The target bid cost strategy is recommended for achieving stable results as your spending keeps increasing by the Facebook bid strategy.

Theoretically, this type of bidding is to be used only when you are planning to raise the budget to your cost to scale better.

You must set the target cost while using this bidding strategy on the chosen conversion window. It could be a 7-day click or a 1-day review which is by default.

So what should you use for your target cost? Is it an average amount that you would like to spend on a cost-per-event basis?

Find the cost which is possibly the lowest and by lowering the amount until you are no longer spending your entire budget.

The primary benefit that the Target Bid strategy has is the stability over the cost per event. This is highly useful when scaling.   

You might see major deflection in costs in the starting or learning phase initially, maybe 50 events per week or so. When the overall cost per event is compared between two bidding strategies, the target cost bidding might show a higher cost.

However, Facebook's ad strategy will try to get you to cost per event near your target cost, which can result in significant cost inefficiency.  

Is The Cost Cap Bid Strategy for You?

If the question of cost caps vs. target costs is still on your mind, then you should know this for a fact!

This question is answered better knowing the actual requirement, depending upon what result we are expecting out of the Facebook ad campaigns. Also, it depends on the total ad spend that you can afford.

It’s an excellent option for marketers who want to maximize their cost efficiency and reach their business goals simultaneously. Those who want to control ad budgets but are yet to decide on an accurate max CPA/CPI in the initial setup stage should base their cost cap on real data rather than going with their gut. In short, it should be realistic.

Those who are still skeptical about the new feature can also check out the help guide on Facebook Business, which clearly explains the process. It gives us comprehensive and detailed suggestions on choosing the right bidding strategy that’s best relevant to your needs. It shows us all the available bid strategies, who sets those bids, the available objectives/goals of each different strategy, when you can use them, their individual benefits, and considerations.

So, are you ready to take the next step towards personalizing your campaigns?

Frequently Asked Questions


What’s the difference between cost cap and Target cost?

The difference between the two Facebook ad strategies - Cost Cap Bidding, and Target Cap Bidding is that the advertiser can select the Cost Per Action or Cost Per Impression depending upon the way they are willing to pay to see the results.

What is a Low-Cost Bid Strategy?

It talks about getting the lowest bid possible for cost per event. Also, it suggests whether you want to spend your budget maybe by the end of the day, by the end of the ad set, or by the end of the ad campaign.

What is the best Bidding strategy for Facebook?

To know the best bidding strategy for Facebook ad campaigns, you should go through some steps as shared followed:

  • Define the Primary conversion event
  • Target expenses should be set
  • Get clear about how much you would spend on conversion
  • Get ensured whether you are using the correct campaign goal
  • Duplicate the ad campaign rather than increasing the ad spend on an existing ad
  •  campaign
  • Make your budget more chill     
  •  Be assured to go with Lowest Bid Strategy.

What is Bidding Strategy?

Google Ad Words has designed specific campaigns to accomplish a goal that is bid strategy. Depending upon your target audience, you can set the strategy to give you higher clicks, more impressions, or conversions.

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