Reference: Pacing, the core algorithm of Facebook's advertising system
GameRes (Text/Old Meng, WeChat: Allfacebook), Pacing is the control logic algorithm in Facebook's advertising system that determines how advertisers spend their budgets over the ad lifecycle. Just as a runner can't get the best results by sprinting too early or too late in a race, Pacing allows ads to automatically allocate budgets in the competition to ensure that advertisers maximize ROI.
1, advertisers promote a product. Daily budget of $10, bid type CPC, assuming that each click can generate $5 value;
2, then the creation of CPC ads to create a bid based on each click to generate $5 real value, the audience target is 25-35 years old men;
3, the advertiser's profit is equal to the value generated by click minus the advertising budget expenditure.
Below we'll look at three different scenarios for bidding strategies to understand why pacing provides the most value to advertisers.
Case one: No Pacing
A blue dot represents an ad's chance to show, and a yellow circle represents an ad's chance to win the show.
It can be seen that the advertising budget is exhausted in the early stage, resulting in fierce competition in the early stage and no competitive state in the later period.
Total budget spent= $10
Total value = 6 *$5 = $30
Value per click =$5
Budget = $10
Profit for theadvertiser = $30 - $10 = $20
Case 2: Bidding too low
Total budget spent = $4
Total value =4* $5 = $20
Value per click = $5
Profitfor the advertiser = $20 - $4 = $16
Case 3: Balanced Pacing
Total budget spent = $10
Total value =7* $5 = $35
Value per click = $5
Profitfor the advertiser = $35 - $10 = $25
As shown in the figure above, when using a constant bid, the advertiser's interests are maximized, and to achieve this, Pacing determines the optimal bid by learning about other competitive ads within the same audience goal, and here's a simple formula:
Final bid (per impression) = optimal bid (per impression) * CTRwhere optimal bid <= max_bid
Choosing an optimized bid is at the heart of Pacing's algorithm. CTR (click through rate), VTR (view through rate), CVR (click value rate) are affected by a number of factors that are not part of the Pacing algorithm.
1, when an ad does not show, one reason may be too low bid, the other reason may be too few audience users;
2, Pacing will not affect Ad set;
3. When changing the bid or budget, Pacing needs some time to learn the optimal bid, so the bid is not optimal during this time, so it is not recommended to change the bid and budget frequently;
4, it is recommended to modify the bid or budget is best in the early stage of advertising, not more than 2-3 times a day;
5, change the bid type. If changed from oCPM to CPC bid, it will have a great impact on the advertisement;
6, Pacing is an algorithm that exists in FB advertising system, users can not choose to remove Pacing algorithm.
Public number search added:GameResSubscribe to more exciting game industry news;
The button in the upper right corner of the screen shares and follows this information;
Send numbers 1, 2, 3 to get the latest content;
Send the letter CP to obtain product business information;
Go to "Discovery" - "Take a look" browse "Friends are watching"
sent to have a look