I like to scale my Facebook ad campaigns with manual bids. One of the the tough decisions is to identify what is the optimal bid with regards to the best combination of number of sales and profit per sale. In short, getting the best return on ad spend (ROAS).
One manual way that I’ve used in the past is to start my ads by placing a bid that would result in 1.00 ROAS. For example, if the cost of goods sold is $10 and I’m selling the goods for $30, I’d start by placing a manual bid of $20. What this translates into is that I’m willing to break-even to initiate the learning phase for the ad-set.
Then I reduce this bid by 10% everyday until my ROAS keeps getting better and stop when the spend starts going down. This has helped me identify the right manual bid in the past. But there’s one drawback and that is the auctions change everyday and I only run the top down bid-identifying strategy once. So my manual bid may not be the most optimal manual bid everyday in the future.
However, since the launch of campaign budget optimization (CBO), there’s a simple solution to this problem. You can create multiple ad-sets with different manual bids and place them in a CBO. So if you’re selling that $10 product for $30, you can may be create 5 ad-sets in a CBO with a bid of $13, $14, $15, $16 and $17. The CBO will automatically choose the ad-set that’s likely to get the best results and each day a different ad-set with a different bidding may be getting the sales for you.