Why doesn't a $200 ad run four times as long as a $50 ad?

While an ad with a higher budget will run longer, the money pays for impressions, not time. Essentially, if you spend $99 on an ad on Facebook, it will garner $99 worth of impressions. These come in three ways:

  1. Views - A view is when the ad appears in a user's Facebook Timeline.  Facebook and Homesnap have spent the last few years making sure that our ads are appearing only in the Timelines of users who are more likely to be interested in buying or selling a home.  Any time it appears a small portion of its budget is "eaten."
  2. Clicks - A click is when the ad appears in a user's Timeline and they click on it.  This indicates that they are interested in learning more about it, and it "eats" a slightly larger portion of an ad's budget than a view does.
  3. Leads - A lead is, of course, when, after clicking an ad, a user fills out the lead form and submits it.  That information goes directly to your Homesnap account. Generated leads eat a larger amount of an ad's budget than a click.

 

That said, there are two reasons that an ad with four times the budget of another ad does not run for four times as long.

The first of those reasons is this: Facebook prioritizes exposure based on the amount spent on the ad.  A $200 ad for kitchen knives may take precedence over a $50 real estate ad, even if the user has a search history tied up with real estate (though in this example, he would probably also have a search history for recipes and kitchen supplies!).  So an ad with a higher budget will be seen more rapidly than an ad with a smaller budget.

The second is this: Homesnap uses a proprietary algorithm called a re-balancer that sits on top of Facebook's targeting algorithm.  While the ad is running, the re-balancer is analyzing what types of users are engaging with the ad. Then, it adjusts target parameters to put to the ad in front of users similar to other users who have engaged with the ad.  The intention of this is to spend fewer views on uninterested Facebook users. The other consequence is that by placing the ad in front of users who are more likely to be interested, the ad is more likely to be clicked or to generate leads, which will use a larger amount of the ad's budget.  Essentially, the re-balancer ensures that engaged traffic on the ad increases exponentially while the ad runs.

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