Facebook advertising is one of the cheapest forms of advertising. Even if you only spend $5, information about your business offers can already reach at least 1,000 users. This month, Facebook published a new overview of how it delivers ads to people on their apps.  

Personalized ads maximizes value for both people and business, says Facebook. 

In its Good Questions, Real Answers series, Facebook explained how it delivers ads that help businesses reach customers through ad auctions that use machine learning.  

Facebook noted that it uses two key factors to determine which ads to show users: audience targeting selected by advertisers and the results of ad auction.

Audience Targeting

“First, advertisers choose their target audience through our self-service tools. Audiences are created based on categories like age and gender, as well as actions people take on our apps such as liking a Facebook Page or clicking on an ad. Advertisers can also use information they have about their audience, like a list of emails or people who’ve visited their website, to build a custom audience or a lookalike audience.”

Facebook explained.

After the target audience is determined and once the ad is submitted for review, Facebook then decides who actually sees the promotion through an ad auction. 

Ad Auction

“For ads that enter the auction, Facebook selects the top ads to show to a person based on which ads have the highest total value score — a combination of advertiser value and ad quality. We find advertiser value by multiplying an ad’s bid by the estimated action rate. This is an estimate of how likely that particular person is to take the advertiser’s desired action, like visiting the advertiser’s website or installing their app. We then add the ad quality score, which is a determination of the overall quality of an ad. We use machine learning to inform this process, as we explain below.

Facebook explained referring to the graphic below.
Photo by Facebook for Business

What you can take control among these combined factors are the Advertiser Bid (the amount of money you are allocating for your ads) and the Ad Quality itself.

To find the estimated action rate, machine learning models predict a particular person’s likelihood of taking the advertiser’s desired action, based on the business objective the advertiser selects for their ad, like increasing visits to their website or driving purchases. To do this, our models consider that person’s behavior on and off Facebook, as well as other factors, such as the content of the ad, the time of day, and interactions between people and ads.”

Facebook also clarified that it does not sell people’s data to advertisers or anyone else. You can learn more about how does Facebook use machine learning to deliver ads here.

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