Facebook Bid Optimization for Ecommerce

There is a lot of confusion about Facebook bid optimization for Ecommerce. Particularly, when it comes to Optimized CPM (oCPM). In this post we give you a brief overview of oCPM and when to use it.

What is Optimized CPM (oCPM)?

Optimized CPM or oCPM is a bid type which allows advertisers to choose an objective for their campaign and have the delivery of their ads optimized to meet that objective. In StitcherAds, there are 2 possible objectives offered: Clicks and Actions. Most Ecommerce advertisers will be interested in Actions so that is what we will focus on here.

How does oCPM work?

In order to optimize for Actions, you will need to decide what action you are interested in promoting. Do you want to increase registrations or are you focused on website conversions? Either way, you will need to have the relevant Pixel installed.

1. In the "Set up budget and pixel options" choose "Optimized CPM" as your campaign bid type.
2. Choose the Pixel relevant for the Action you are optimizing and add it in the "Optimization (oCPM) Pixel" field (e.g., Checkout Pixel, Registration Pixel, Add to Basket Pixel).
3. Select your Budget and Bid amounts.
4. Choose "Actions."

Facebook will then apply its optimization algorithm to identify people within your campaign audience who are most likely to complete the desired action. The algorithm relies on data points gathered from campaign performance. Therefore, you need to have a high enough number of conversions for the algorithm to work correctly. Another tip is to avoid setting your maximum bid too low. Facebook will choose the bid needed to display the ad to people who are most likely to convert but only if the maximum bid allows. A maximum bid of at least $30 (or equivalent) for oCPM for actions when the Checkout Pixel is selected should be sufficient.

When should I choose oCPM as my bid type?

• You have a specific goal such as increased registrations, increased add-to-baskets, increased sales. You must have a relevant conversion pixel in place.
• Your Audience is greater than 500,000.
• You have frequent conversions. Remember, Facebook needs data points so that the optimization algorithm can run successfully.

When should I not choose oCPM as my bid type?

• You do not have a conversion pixel in place.
• You are running a brand awareness campaign rather than a campaign with a specific objective.
• Your audience is less than 500,000.
• You do not have frequent conversions.