Bidding and auctions FAQs
There are 3 key components to how much you pay for X Ads. Read on to learn how auctions, ad score, and bidding works.
The X Ads auction
X Ads serve using an auction, where advertisers bid against each other to have their ads shown to the audience they're targeting. Unlike a traditional auction, X Ads auctions consider not only the price the advertiser is willing to pay, but also the quality of the ad. Each time your ad wins an auction, it will serve once to a person on X. We call this "an impression."
Your ads will automatically enter the auction once your campaign is running, and the auctions your ads enter are determined by the targeting criteria for your campaign. For example, if you target the interest “basketball,” your ads will compete in auctions to serve to people on X who are interested in basketball. Our auction algorithm will compare your ad to other ads which are also targeting that interest, and the ad that wins the auction will be shown to that person.
If the person who sees your ad performs the desired action of your campaign (i.e. engages with your ad for an Engagements campaign), X will charge you using what we call a second price auction model. This model ensures that you will only ever pay incrementally more than needed for your ad to beat out the second place ad in the auction. For example, if you bid $1.40 and beat an otherwise identical ad bidding $1.00, your campaign will be charged $1.01 if the person it was shown to takes the desired action.
Ad score
It’s important to have competitive bids so your ads can compete with other advertisers and serve to people on X.
However, your bid is not the only thing taken into account in the auction. The quality of your ad is equally important.
Each ad that you create will be given a “quality score,” which is used along with your bid to compete in auctions. Quality score is determined by taking factors into account such as:
Resonance: Are people engaging with your ad? Do they click, like, and/or repost it often?
Relevance: Does your post content align with your audience’s interests?
Recency: Are your posts fresh? X is what’s happening now, so our auctions reward up-to-date content.
To win auctions and maximize your campaign’s success, your ads must have both a good quality score and bid. We call this combination your “ad score,” which is what determines who wins the auction and serves ads on our platform.
Bidding on X Ads
We have 4 bid types on X Ads - your campaign objective and goals will help you determine which one to select.
We provide real-time suggestions on what other advertisers are bidding during your campaign setup, so you’ll always be able to set a competitive bid (if you're using maximum or target bid type). You will not need to set your bid if you choose the automatic bid type.
Automatic bid
Automatic bid type is designed to auto-optimize your bid to maximize results at the lowest price (within your budget). We recommend this bid type for new advertisers. Instead of having to set your bid yourself, your bid will be chosen on your behalf to ensure competitive serve within the auction. Automatic bid is the easiest way to quickly get your campaigns live and serving impressions on the platform.
Maximum bid
Maximum bid type allows greater control over how much you bid per desired action. In this bid type, you choose your maximum bid, and your results will not be charged over this price. This bid type is helpful for experienced advertisers who know exactly how much they’re looking to pay per desired action at scale.
Target bid
Target bid type is an option in our website traffic (link click goal only), reach, app installs (app clicks goal only), and app re-engagements campaign objectives, where you can name the bid you’d like to pay per desired action. Your campaign will then auto-optimize your bids to achieve a daily average cost that meets or beats your target. You will pay the actual average cost for all in a day. If you change your bid over the course of a day, it will average to the highest cost you set.
Target cost per action (*NEW*)
This new bid type allows you to bid on your conversion goal in the Sales objective. For example, you can bid on a “Target cost per purchase” or a “Target cost per download” to align with the lower funnel event you are optimizing towards. Once your campaign achieves ~10 conversions, our algorithm will pace towards your lower funnel event bid price. Keep in mind that setting too low of a target cost per action will impact spend.
How does targeting affect campaign serve?
The targeting you choose determines the size of your campaign’s audience. Generally, the larger your campaign audience is, the more easily your campaign will serve, as there are more people to serve your ad to.
There are two categories of targeting on X Ads:
Additive targeting types - "OR" targeting: These targeting types will layer onto each other, making your potential campaign audience larger. For example, a person who fits targeting piece 1 OR piece 2 OR piece 3 will be eligible to be served the ad.
- Restrictive targeting types - "AND" targeting: These targeting types will make your potential campaign audience smaller, as they will all be respected. For example, only a person who fits in targeting piece 1 AND piece 2 AND piece 3 will be eligible to be served the ad.
With additive targeting, the more criteria you add to your campaign targeting the larger the audience. For example, if you select #basketball, #football (keyword targeting), and @XSports (follower look-alikes targeting) in your campaign, people who fit any one, two, or all of those criteria could potentially be served your ad. By using multiple additive targeting types you’re expanding the size of your campaign audience.
With restrictive targeting, you can hone in on specific people by decreasing the campaign audience size. Selecting any of these targeting types in your campaign will restrict your campaign audience, so that it only serves to people who meet all of the criteria. For example, if you select "iOS devices" in your campaign setup, your campaign will only serve to people using X on an iOS device.
You can use a mixture of additive and restrictive targeting in your campaign to reach people you’re interested in while maintaining scale.
Additive targeting options
These targeting types will layer onto each other making your potential campaign audience larger. For example, a person who fits Targeting piece 1 OR piece 2 OR piece 3 will be eligible to be served the ad.
Restrictive targeting options
These targeting types will make your potential campaign audience smaller, as they will all be respected. For example, only a person who fits in Targeting piece 1 AND piece 2 AND piece 3 will be eligible to be served the ad.
Frequently asked questions
How much should I set my bid for?
If you’re not sure how to set your bid, we recommend using the automatic bid type, which will automatically choose a bid for your campaign that's competitive within the auction.
When using maximum bid, how much you set your bid for depends on how much you’re willing to pay at most for a desired action.
We provide bid guidance within the campaign setup form, which shows ranges of what others are bidding. This will help you set your bid according to how competitive you’d like your campaign to be within the auction. A suggested bid will appear next to the maximum bid when you enter your campaign budget, daily budget, and campaign start/end dates. If you change your campaign budget or daily budget, the suggested bid will update accordingly. Until you enter a maximum bid yourself, the maximum bid will automatically be filled in with the mid-point of the bid guidance.
For the Target cost per action bid type, we recommend testing a bid that is higher than your actual desired target cost and gradually lowering it as the algorithm continues to learn. Note that setting too low of a Target cost per action could impact the campaign’s ability scale. This bid type requires ~10 conversions in order for the algorithm to kick in and pace to your desired target cost. As this is not a max bid, we cannot guarantee your result will be below your target cost amount.
Does bid guidance guarantee I can deliver my full budget?
Our bid guidance is an educated recommendation based on our internal algorithms. While they will help you bid more effectively, we cannot guarantee that your campaign will deliver in full or that you will spend through your daily budget.
Additionally, while bid guidance is intended to be a helpful suggestion, you can always set your bid outside of the recommended range. You’re free to bid any value you like that is at or above the minimum bid of $.01 per desired action.
If you would like to consistently spend through your desired daily budgets, we recommend selecting the automatic bid type. Since it's optimized for a given campaign objective and budget on the advertiser’s behalf, you're more likely to spend through your configured daily budget.
How much do X Ads cost?
How much you pay in your campaigns is set by you. By setting up your budget during your campaign setup, you can control the amount you'll be charged. Learn how to set your campaign dates and budget.
The price of each desired action in your campaign is not a fixed rate, as our campaigns are priced in our auction model. The targeting, creatives, and bid you select in your campaign setup will help determine how much each billable action costs.
We recommend setting your campaign budget to an amount you're comfortable spending, and then follow our campaign optimization guides to reach your goal price per action.
Who bids on ads?
This auction process is for all of X’s advertisers. This includes accounts that set up their campaigns using credit cards on Ad Manager, managed accounts that work with X directly or through an agency, and Supply Side and Demand Side Platforms that partner with us. Finally, X may set reserve prices for auctions (i.e., price floors) and may sell the ad placement to these partner Platforms if they meet the reserve.
More on X Ads pricing.
