# Here's Why I DON'T Use Facebook Ad Bid Caps

Channel: Ben Heath
Video: https://www.youtube.com/watch?v=mH87TeLKZNw
Duration: 12 min
Language: English
Words: 2770
Transcript page: https://viewrankai.com/tools/youtube-transcript/mH87TeLKZNw

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[0:00] hi guys it's ben heath from lead guru and in this video i'm going to explain why i don't use facebook ad bid caps now that might sound like quite an interesting maybe a bit of a controversial title i'm going to explain why in a minute before i do that just want to very quickly ask you to smash a like on this video click that like button and of course subscribe to my youtube channel if you are new and you haven't done so already okay so why don't i use facebook ad bitcaps you know i've created videos in the past showing you exactly how to create facebook ad

[0:26] bitcaps i've talked about why they're useful in certain circumstances and i should probably quickly explain now that there are scenarios in which we still use bid caps they're very very small there are client accounts we've got running right now that have bid caps in place but in general i do not like to use facebook ad bid caps i don't want to use them i don't want to put them in place and there are a few different reasons why i'm going to get into those now the main reason is because of the interruption to delivery when you have a bid cap in place you are usually going to see

[0:58] interruptions in delivery as in facebook will be basically turning on and off your campaigns they'll be reducing your budget because facebook believes it will not be able to achieve a cost per conversion or something that you're optimizing for lower than whatever you set the bid cap at that's usually what's going to happen of course you could have your bid cap set so high that it doesn't do that in which case you could argue that it's just not doing anything in the first place and it's not going to make any difference either way but that interruption to delivery is not ideal particularly over the long run we know that facebook ad campaigns

[1:31] perform better with consistency facebook wants to be able to go through the learning phase it wants to be able to work out who within your target audience is likely to produce the best results and what time of day is the best time of day to run your ads and which placement option gets you the best results and all these various elements so consistent delivery really allows facebook to go through that they can go through those variables and that's why you'll commonly see facebook ad campaigns improve over time you know the first few days might be a little bit shaky your results might not be great a

[1:59] weekend they're looking better three months down the line with facebook's optimization process and your own of pausing under performers creating new stuff etc etc and you end up with much better performance bid caps can really get in the way of that and i think a lot of people are attracted to bid caps and they start working with them in the first place because they can help reduce your cost per conversion initially you know if i've got two identical campaigns and one's got a bid cap and one's not um it i wouldn't be surprised at all to see that the bid cap version produces a lower cost per conversion in

[2:29] that first week or so but in my opinion that's quite short-sighted if that's going to stop you and facebook being able to optimize that campaign to the point where you're paying you know on average 20 more 30 more in three months time that's a bad deal it's attractive early on and i can see why you might want to do it early on but that's not a good situation to be in i'd much rather see a slightly higher cost per conversion initially but then have the more successful campaign that i can then run for months if not years and scale okay it's the same process around testing

[3:02] you know we have this conversation a lot where people are like oh i don't want to test because when i test most likely i'm going to see a worse result and you're like well yeah that is true when you test elements they're most likely not going to work as well as what you've already got and so therefore in the short run your cost per conversion is going to go up but if you test enough stuff you're going to find a targeting option you're going to find an ad creative option that delivers much better results than what you've currently got and once you've worked the cost of working that out is slightly

[3:28] higher cost per conversion in the short run the benefit to working that out is ads targeting options campaigns that you can run for months years and that are significantly more effective than what you had previously bid caps are kind of the same thing okay they kind of fall into the same approach now when i say you know there will be circumstances in which we use bid caps you're talking about businesses where they need to make a real-time profit they can't afford to uh you know make a loss or have negative impacts or anything like that happen to their facebook advertising in the short run they're sort of analyzing

[4:01] things on a day-to-day basis i do not like to work that way i do not think facebook advertisers should work that way again it's short-sighted you should be playing a long game i actually think for most facebook advertisers you would benefit from not being able to see real-time data i think if you could only check your stats once a week uh once every two weeks something like that that would probably be beneficial because you wouldn't make so many changes and adjustments and things like that but that's that's mainly why i am the intuition delivery is why i don't like um running big caps i don't like having that approach of

[4:34] needing things to work in the moment you also don't want to run into a scenario and i've seen this a lot where let's say someone wants to spend a thousand dollars a day okay and they've got a big cap in place and the bid cap is meaning that they're only spending three hundred dollars a day so they think i'm only spending about 30 budget right let's up it to three or four thousand dollars a day with the bid cap in place to get to the point where we're spending a thousand and you're always trying to sort of play this game and from a budgeting standpoint it's very difficult to do that um

[5:03] because you don't know whether facebook's going to spend 30 your budget six percent your budget 10 your budget and particularly for a business that may not see the return initially so service providers well a lot of businesses um you can end up overspending in a month or under spending in a month when you've got a consistent budget so when we're working with clients we much rather not use bid caps again because they're going to help us and spend a budget in a much more predictable and controlled manner than it is going to if we've got this fluctuations going up and down and things like that the other thing i want to mention about

[5:33] bid caps is that the way bid caps work is they're predictive right so in fact actually let's go into a campaign here so we've got an example ad campaign and let's go into um the various campaign bid strategies i'm not going to cover them all by any means because lowest cost is the default that's what i'd recommend the vast majority of facebook advertisers stick to but you can see these got down here other options you've got big cap you've got targets costs you've got a few things you've even got cost cap and explain sort of the differences between the two in other videos that i'll include a link to in the video

[6:00] description bit cap the way that works is it's predictive so whereas cost cap works in terms of facebook take a look at the results you've actually generated and then they adjust your how much you're spending accordingly so let's say you go above your cost cap facebook will then pair your budget back down bid cap which is the one that most people use by the way they don't tend to use crosstalk people are more likely to use bed caps from what i've seen at least they're predictive facebook is trying to predict whether they can get you a cost per conversion that is lower than your bid cap

[6:35] and i think facebook as an advertising platform has made tremendous progress over the last few years they have improved how they operate significantly really really well but actually their predictive stuff's not that good their optimization based on results is fantastic that's why ad accounts with ten thousand conversions perform so so well it's because then facebook got so much data they can use but in terms of how could they can predict what's going to happen so you know when you create your campaigns and i get lots of questions and comments about this where it will say your budget we predict 15 conversions a day or something along

[7:04] those lines and people will be like oh that's not enough i can't run my facebook ad campaign i basically say just completely ignore that data like just don't worry about it right um their prediction's not that accurate i find that with big caps we've run campaigns before with lower costs lowest cost and let's say we need to generate a cost per conversion that's less than ten dollars each and we put in a bid cap at fifteen dollars that fifteen dollars can get in the way of your facebook ad campaign from running doesn't seem like it should you were consistently achieving a 10 average beneath that why is it getting in the way it's

[7:34] because facebook's predictive side of their ad platform is nowhere near as sophisticated as their optimization based on data that's already happened side of their facebook ad campaign one of the issues you'll also run into with a bid cap if you've used this for an extended period of time is let's say facebook have really paired your budget back down you want to spend a thousand dollars a day but facebook's only spending 200 a day and that's decreasing all the time the big cap is meaning that you're not able to spend facebook doesn't think it can get you conversions that are uh beneath that point if market conditions

[8:05] change if something changes facebook won't necessarily up your budget particularly they've got to point where they're spending almost tiny budgets it'll take facebook quite a long time to react to the results that they're seeing whereas you as sort of like a person that's aware of what's going on in the world can be much more reactive and adjust your budget accordingly so the perfect example was is everything that's been happening recently in the world with lockdowns from covet 19 and all you know social unrest we've seen particularly in the us these you know what the government is deciding to do in various countries can really affect the uh how successful a facebook ad

[8:42] campaign is being i mean you know recently in the uk the uk the uk government said that anyone going into shops everyone has to wear a face mask and there's going to be a fine if not okay that affects certain industries obviously anyone selling face masks but you know uh other types of businesses and and things like that those sorts of rules are coming into place if the government in your location decides yes they can open restaurants or now they need to close gyms and all that sort of stuff the effectiveness of facebook advertising is affected by that facebook is going to take some time to

[9:13] adjust to that because they're going to start saying okay the result is getting better let's up the budget a bit more next day because that's getting better let's up the budget bit more next day whereas if you're controlling that manually yourself you can be reactive as soon as it's announced and that's in my opinion by far the better way to do it so i would strongly recommend if you really really want to use bitcaps don't do it with a brand new campaign let it at least get through that learning phase with lowest cost let facebook work some stuff out let them establish what's likely to be the best results and then

[9:40] if you really really feel much more comfortable putting big caps in place go ahead and do that once you've run the campaign for a month or so once you've generated a nice number of conversions um at least to get a lot of that learning out of the way and i do think that with lowest cost for most people you're going to see better results over the long run because of the lack of interruption to delivery okay hopefully that's been useful for you a couple of things i want to quickly mention the first is our facebook advertising services so my company lead guru is a facebook advertising agency we offer

[10:09] done for you facebook and instagram advertising services where we can create manage and optimize facebook ad campaigns we can basically handle the entire facebook and instagram advertising side of your business and if that's a very important part of your business why not work with professionals on it to help you get the absolute best results possible so if you are interested in working with us the best next step is to book a free phone call with me free 30-minute phone call where basically i can find out more about your business you can find out more about how we work as a company and we can just see if we're a right fit

[10:38] for each other very informal no obligation of course and so if you're interested in that there'll be a link in the video description below go ahead and book a free 30-minute call with me and please only obviously do so if you're interested in our services these aren't sort of free consulting you know services these calls they are to see if if we might want to work for each work with each other and just let you know given the demand for our services and for my time there's about a two to three week wait time on this course so just factor that in if you're you know making future plans and

[11:06] stuff go ahead and check it out you can book a slot directly into my calendar see when the next start is available the second thing is my facebook ads mastermind groups there's a free facebook group all about facebook advertising for facebook advertisers we've currently got just over 42 000 members fantastic community full of um you know people wanting to get better results so facebook ads just like yourself most likely so if that's how something you want to be part of go ahead and join completely free we moderate it closely there's no spam in the group and i also do free trainings free live trainings in the group every single week

[11:37] so you can get your questions answered by me in there um okay so hopefully i'll either speak to you i'll see you in the facebook group either way i want to wish you the absolute best of luck with your facebook advertising oh one quick thing i'll mention about our services we're only able to work with companies that have a 3 000 plus monthly uh facebook ad budget so if you need that point then we're not going to be able to work with you unfortunately just wanted to quickly mention that anyway best of luck with facebook ad campaigns guys if you found this video useful please give it a like give

[12:04] it a thumbs up comment below to let me know and of course subscribe to my channel and i will talk to you soon bye for now

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