Besides the advertiser's bid, what two other primary factors contribute significantly to an ad's total value in Meta's ad auction, influencing its likelihood of winning?

Besides the advertiser's bid, two other primary factors contribute significantly to an ad's total value in Meta's ad auction, influencing its likelihood of winning. These are Estimated Action Rates and Ad Quality. The ad auction works by calculating a total value for each ad, and the ad with the highest total value is typically the one shown.

First, Estimated Action Rates refer to Meta's prediction of how likely a person is to take the advertiser's desired action after seeing their ad. The "desired action" is the specific objective the advertiser has set for their campaign, such as a purchase, a link click, an app install, or watching a video. Meta's system generates this prediction for every ad and every potential user in real-time. A higher estimated action rate indicates that Meta predicts a greater probability of the user completing the advertiser's objective, which is valuable to both the advertiser and to Meta. This prediction is highly precise, leveraging a vast amount of data, including the user's past behaviors, the historical performance of the ad, and the relevance of the ad to the user's interests. For example, if Meta predicts a particular user is highly likely to click on a specific ad for a new pair of shoes and then make a purchase, that ad will receive a higher estimated action rate for that user, increasing its total value in the auction.

Second, Ad Quality is a measure of how good the overall ad experience is for the user. Meta constantly evaluates the quality of an ad using various signals, with the goal of ensuring a positive user experience on its platforms. Ad Quality is influenced by both positive and negative feedback from users. Positive signals include user engagement with the ad, such as likes, comments, shares, saves, or watching a video ad to completion. Negative signals, also known as “low quality attributes,” include instances where users hide the ad, report it, or provide negative feedback. Ads are also penalized if they are perceived as clickbait, engagement bait, sensationalistic, or contain misleading content. Ads that provide a good user experience and elicit positive user engagement are considered higher quality, which increases their total value in the auction. Conversely, ads with low quality attributes are penalized, decreasing their total value. For instance, an ad that frequently gets reported as misleading or that has a high rate of users hiding it will have a lower ad quality score, making it less likely to win the auction, even if the advertiser bids highly.