Today in Digital Marketing - The Holy Trinity of Bid Strategies, Explained

Episode Date: March 22, 2024

It's happening again — Meta charging way more than your daily budget allows. But is this a case of Operating as Intended? Also, a deep dive into the three main bid strategies and which you should be using. The myth of the TikTok watch time might be busted. And that anonymous review you left the other day — yeah, it might have your real name on it now.📰 Get our free daily newsletter📈 Advertising: Reach Thousands of Marketing Decision-Makers🌍 Follow us on social media or contact usLinks to all of today’s stories hereListen to NerdWallet’s Smart Money podcast on your favorite podcast app. “Future You” will thank you. GO PREMIUM!Get these exclusive benefits when you upgrade:✅ Listen ad-free✅ Back catalog of 20+ marketing science interviews✅ Get the show earlier than the free version✅ “Skip to story” audio chapters✅ Member-only monthly livestreams with TodAnd a lot more! Check it out: todayindigital.com/premium✨ Already Premium? Update Credit Card • CancelMORE🆘 Need help with your social media? Check us out: engageQ digital📞 Need marketing advice? Leave us a voicemail and we’ll get an expert to help you free!🤝 Our Slack⭐ Review usUPGRADE YOUR SKILLSInside Google Ads with Jyll Saskin GalesGoogle Ads for Beginners with Jyll Saskin GalesFoxwell Slack Group and CoursesSome links in these show notes may provide affiliate revenue to us.Today in Digital Marketing is hosted by Tod Maffin and produced by engageQ digital on the traditional territories of the Snuneymuxw First Nation on Vancouver Island, Canada.Our Sponsors:* Check out Kinsta: https://kinsta.comPrivacy & Opt-Out: https://redcircle.com/privacy

It is Friday, March 22nd. Today, it's happening again. Meta charging more than your daily budget allows. But is this a case of operating as intended? Also, a deep dive into the three main bid strategies in which you should be using. The myth of the TikTok watch time might be busted. Oh, and you know that anonymous review you left the other day? This is awkward, but it might have your real name on it now.

I'm Todd Maffin. That's Ahead. Today in digital marketing. It's the season for new styles, and you love to shop for jackets and boots. So when you do, always make sure you get cash back from Rakuten. And it's not just clothing and shoes. You can get cash back from over 750 stores on electronics, holiday travel, home decor, and more. It's super easy.

And before you buy anything, always go to Rakuten first. Join free at Rakuten.ca. Start shopping and get your cash back sent to you by check or PayPal. Get the Rakuten app or join at rakuten.ca. R-A-K-U-T-E-N dot C-A. Well, every Friday we check in with our Meta Ads correspondent, Andrew Foxwell. Andrew has visibility into $300 million in Meta Ads spend through his Slack community called Foxwell Founders. If this doesn't interest you, you can skip to the 10 minute, 10 second mark. Or if you're subscribed to the premium podcast, just tap the next story in

your chapters. Andrew, this week, I noticed on social media, a lot of media buyers talking about which bid strategy we should be using now that it's, you know, we're getting close to a new quarter. There are the three main, the lowest cost, bid cap, and cost cap. Can you walk us through what those are and what you recommend to your clients for what we should all be using these days? Yeah, definitely. I mean, I think it kind of depends on, obviously, what your goal is. But for a long time, most of us used lowest cost. And I still use a lot of lowest cost bidding. And what this does is finds the person that's most likely to convert at the lowest cost.

And you're sent, you know, entered into the auction that way while still getting volume to find the lowest cost conversion that you can at that time. This is also known as an auto bid because it's what Meta defaults to. There was a rework of a lot of different bidding types last year, and a lot of people don't know about it. But then the next one is a cost cap and cost caps were used a lot. And we're essentially they find a conversion for you based on a range that you set. So you say, I would like to ironically, it's called a cost cap. But you say, I'd like to find a conversion for $100. And it'll find you conversions for within the auction for around $100, essentially. Now, some days that might mean that you're paying $200, even though your cost cap is

set at 100. But generally, it tries to keep things in a range. but you do sacrifice volume. So you're not going to get as many people coming in as you would, but you're going to get them around a cost. The one that has been around but hasn't been used as much, but seems to be becoming more popular is bid caps. And bid caps essentially are the ability for you to find a conversion at, let's say it's $100 as an example again, or below. So you're sacrificing a significant amount of volume, but you are finding a conversion at $100 or below, and it will not go above that number. And that's originally actually how cost caps were supposed to work, but they changed them. But the downsides with bid capping is you're sacrificing a significant amount of volume. So on some days you will have days where you aren't spending anything.

And on other days you will be spending your whole budget. So there's also rules of how budgets relate to this. Generally, you will use bid caps where you are also using bigger budgets. And that could mean you're spending a thousand or five thousand or ten thousand dollars a day because you're when it's good, you want it to be able to scale essentially. And when the volume isn't there, you don't want it to be able to do that. So there's a lot of debate about this, about which one's the best. And I think that if you look across direct response media buyers in direct to consumer world right now, most people are utilizing some form of a bid cap, probably, where they have, you know, they want to get conversions under a certain amount. And then they're also utilizing an auto bid or a lowest cost bid

on prospecting more often, where it's letting the volume come in. And you're letting, you know, that auction kind of you're more subject to the auction, but you're utilizing two different bid types. This isn't this was not the case six months ago. I don't think that a lot of people were using multiple types of bidding in one account. And I think it's because of the way that they've reworked these within meta, within the auction and within their ad tool. Would it be a fair strategy to say, especially as things become more machine learning based, that at the start of a campaign, we want to give Meta as much data on how consumers are responding to the ad campaign as possible.

And therefore, we would go in with lowest cost because that would drive an enormous amount of learning data into the campaign. And then once things settle down and we have a sense of what the cost is, the real world is cost is going to be, we may tweak that a little and then change the campaign settings to say a bid cap. That's what my gut would tell me to do. And you can certainly do that. If you're new or you're a lower spender, you're probably not going to be utilizing.

And by lower spender, I mean, you're spending, let's say under $5,000 a month on your entire account. You're probably not going to be utilizing a lot of capping, either cost capping or bid capping, but if you, because you want volume. Now, if you are very interested, you don't care about volume and you're very interested in controlling costs, a bid cap can be a really good way to achieve that. I think that most people see the progression as lowest cost, cost cap, bid cap. And as you scale, you will utilize them that way. But yes, if you're starting new, as much volume as you can at learning is absolutely going to be the right strategy. And over time, experimenting with these is okay.

And I think there's a tendency that everybody that you have, right, as a media buyer or a person that's buying Facebook ads, it's like, well, if I drive a Ford truck, I can never drive another type of vehicle. Like, I love Ford and I'm always going to do it that way. And that used to be the way. It's like, I'm a lowest cost person. I'm never going to do anything with capping. And now you see these, you see mixtures more often. And it's rare that you'll see one account with, like we have a member currently talking about and giving a lot of examples of he's switched one entire account to cost caps, and he's in the United Kingdom. And overall, has it been more productive? He thinks it's been more productive by about 15% in reference to efficiency. But this is a higher spending account, they can afford to have bigger swings. You know, and there was another account that hadn't ever that I'm privy that I like know the information about. They hadn't ever been really focused too much on understanding the true profitability. And once they actually

started to do that, they realized what they really could pay for a conversion. Instead of looking at Oh, well, we need a two x on meta, they realized we actually need conversions at $65 or under. And they used to spend $300,000 a month. And that entire account is now on bid caps. And it's only spending roughly between $30,000 to $40,000 a month because that's how many conversions they can find. So it's sort of like you have to utilize both. And I think most people are doing that now at this point. So it's something if you've not experimented with, it's worth checking out. Sometimes when you go into a meta campaign, this is true for most platforms, not just meta, certain things will trigger, will go back into a learning phase, or it will erase the data that it's learned so far.

Is there any danger in taking an existing campaign that you've run on lowest lowest cost to accumulate a bunch of data to using that same kit like to editing the bid strategy on that actual campaign live? Or should we be doing the old duplicate the campaign, pause the first one, make edits to the duplicated one and kick the duplicated one off running? Yeah, I would probably do new if you're going to be changing the bid strategy. I'm not saying it can't work if you switch a campaign, but what you're essentially telling that is, oh, you've been going down this highway. It's been going really well just to continue with my car metaphor.

What I need you to do now is ride the next 60 miles with the brakes on. And you're like, I don't understand. I was going along fine. And that's essentially what you're telling the auction. And so if you start by being like, look, you're going to start this journey, and your brakes are going to be on a little bit the whole way, the expectation is different. And it's the same thing within the ad auction. So I always think that you should do it new, if you're going to do that, if it's running, and it's and it's doing decent profitability wise,

on a lowest cost, keep that running, and then start to experiment potentially with cost capping or bid capping in the middle part of your funnel and see if that does anything or potentially to a new part of the audience that may be a little bit more experimental. You know, like maybe you aren't sure if this is going to work to people that like this or like that or with be in in a broad audience or whatever. And you can cost cap or bid cap that and you can see like what the ranges are that come in. So, but utilizing those same ads, if you can, right? Just in a new campaign container. digital ads training at b.link slash Foxwell, or his Slack community of senior meta ad buyers at b.link slash founders. Both of those are affiliate links, and you can find those links at the bottom of our show notes.

And you can watch our full unedited interview. There is a link to it in today's newsletter, which you can sign up to for free by tapping the link at the top of the show notes or going to todayindigital.com slash newsletter. Well, regardless of the bid type you use, you might run into meta overspending your campaign budget. This is when you tell the ads manager that you have a certain budget, say $100 daily, and it spends more than that and sometimes very quickly. Here's what DTC media buyer David Herman posted on social media last night.

Quote, I'm almost speechless at tonight's ad spend overage on Meta. For over a month, we've endured bugs and overspend issues left and right. I'm so mad for businesses investing into this platform right now. We've been told by Meta reps left and right that there are no issues with the auction. This isn't about performance. It's about basic ad spend pacing that Meta has somehow managed to fumble three times in a month that I'm angry about. We've got brands that had spent almost 40% of their daily budgets in one and a half hours tonight, at CPAs 10 to 15 times what they should be.

I'm sure we'll get a random refund with little to zero communication about it, but the damage is already done. What MEDA doesn't understand is these issues impact the downstream effect for days later. The sad thing was, until this overspend, we're finally getting things back on track from the late February overspend, unquote. It is not clear, of course, why this is happening, but it's a good time to remind you of our reporting a few months ago that Meta is now happy to overspend your daily budget by as much as 75% as long as it gets the daily average in line with your budget across the entire run.

In simpler terms, if you're spending $100 a day for five days, it's quite possible that Meta would spend $150 one day, then $150 the next, then a couple of days at $50 to bring things back in line before your campaign ends. Again, it's not clear if this is what's happening here. And as usual, Meta is silent on the issue. Just maybe check in with your campaign spends just to be sure. Scientists say they have cracked open a bit of the mystery box of TikTok's algorithm and found that watch time, long considered to be one of the biggest factors in a video's success, may not be the holy grail after all. The data coming from thousands

of users in Europe who downloaded their data, that's a new feature that was implemented in the app because of stricter European privacy laws, and they gave that data to the researchers. And that data revealed that between 30 and 50 percent of the first 1,000 videos TikTok users see are because of their past interactions, whether they like the first 1,000 videos TikTok users see are because of their past interactions, whether they liked a similar video, who they follow on the platform, and so on. 30 to 50%, which I think is lower than a lot of people assumed. And one surprising note, the effect of watch time wasn't as strong as earlier thought. Certainly the percentage of a video that the user watched had some effect,

but TikTok might be scaling that back. as earlier thought. Certainly, the percentage of a video that the user watched had some effect, but TikTok might be scaling that back. That's at odds with the last couple of years of best practices, which is why you often hear creators start their video with something like, and be sure to stay to the end because the last thing is amazing. Algorithms do change, and this is a good reminder to always be testing and not locked into a strategy that might actually be years old. If you've ever used the website Glassdoor to anonymously complain about your former employer, heads up, that website might be doxing you to that employer.

Glassdoor has always been a good place for people to leave anonymous employer reviews, but it seems the site has quietly changed its policy and now mandates the use of real names for account holders. Worse, some users say this happened without their knowledge or consent and that the only option support is offering is to delete your entire account along with your reviews. And even then, account deletion confirmation emails users are receiving add that they might actually keep some of that data around anyway, even if they do remove your accounts by request. As far as anyone can tell, this is actually due to an acquisition the company made a while back of an app called Fishbowl. It's a networking app for professionals, and that app required users to use a real identity. Somehow, the data architecture seems to have made it up to the main site. Either way, if you've bashed a company or boss on Glassdoor, it might be worth double-checking

to make sure your name isn't suddenly right alongside it all. So this is weird. Microsoft is buying ads to promote its search engine, Bing, and it's buying them on Google. That's not the weird part, though. The weird part is the ads go to a live Bing search. So if you're searching Google for best hearing aids, you might see an ad for Bing with the page title top five best hearing aids. And that link goes to that same search on Bing. It's sort of like search engine inception. That specific example returns a list of ads on Bing for hearing aid pages and products, many of them pages stuffed with affiliate links. Bing has bought ads on Google before, but until now, it's been to throw people to the front page of Bing or promote its AI search,

something Google's probably not happy about, but it doesn't want to rock the antitrust boat, so they're just letting it fly. The practice isn't new. Ask.com did this more than a decade ago. Quoting Search Engine Roundtable's coverage of this today, quote, it makes you wonder if Bing is doing this to win over Google users or if they have some sort of model where they can make more on their ad clicks than what they are paying

for the Google ad click, unquote. Either way, definitely did not have that one on my bingo card. Instagram has made a small but important change to how hashtags are used in the app. Now, when you tap on a hashtag, you will get a broader range of search results related to that hashtag than the previous top posts feed. The new results page looks basically the same as the explore feed. Quoting social media Today, quote, you can still follow a topic via the tag page, but you don't have the full results like accounts, audio, places and reels that you would get via a similar search in Explore. By providing access to these additional elements, Instagram's hoping to improve profile discovery as opposed to only highlighting content. It'll also ideally expand user search behaviors by linking them through to only highlighting content. It'll also, ideally, expand user search behaviors

by linking them through to the various elements. So it's not a radical change, but a logical one, as the Explore overview enables users to dig into different elements instead of being confined to the top posts feed, unquote. What does this mean for marketers? Well, it might behoove you to include your brand's target keywords in your profile. Profiles that come up in this new search screen don't always have the hashtag or keyword in the media caption anymore, but most do have that in their profile somewhere.

And a small correction. Yesterday, we reported on Lyft's new video ad product. We reported that the ad product in question was tablet based. It turns out those video ads actually play in the Lyft mobile app. of days ago. We had a Rift and the old, old version of it. And it was fine. But this one, you know, it's so much easier because there's no, you don't have to like hook up little cameras to watch where your hands are. You don't have to hook it up to a PC or anything. The big problem, though, is, you know, remember, you're strapping a computer to your head and it's heavy. It's not as heavy as what I understand the Apple headset to be, but yeah, it's quite heavy. And you end up with this, like, I don't want to call it a welt, but definitely an indentation in your forehead for it.

And so anyway, I've ordered this very elaborate and somewhat expensive headset for the headset that will apparently take the weight off of it. And we'll see. Anyway, I bought Assassin's Creed and apparently it's like a full fledged Assassin's Creed game. I did try it for a couple of minutes. It's it's kind of nuts, you know, being in 3D when you have to crouch under something, you don't just press the crouch button, you actually physically crouch your body. So I don't know. It looks really cool. That's probably what I'm doing this weekend. Either way, that will do it for the week. Today in Digital Marketing is produced by EngageQ Digital on the traditional territories of the Sunamic First Nation on Vancouver Island. Our production coordinator is Sarah Geld. Our theme is by Mark Blevis.

Ad coordination by Red Circle and Beehive. I'm Todd Maffin. Have a restful weekend, my friends. I will see you on Monday.