March 15, 2017

Reach highly engaged customers with Facebook Dynamic Ads for Travel

With the shift from Dynamic Product Ads (DAP) to Dynamic Ads for Travel (DAT), travel brands are now able to reach a highly engaged audience. For groups like IHG, this has led to a cost per booking decrease of 20 percent with a 50 percent increase in campaign scale.

With its 1.8 billion monthly users, Facebook has the unique ability to reach customers in a native environment without interruption. In order to maximize campaign performance, it is important to have a fundamental understanding of the auction environment. The DAT system has been designed to combine the needs of both advertisers and customers. This approach improves user engagement while providing much-needed cost controls.

How does the Facebook Auction Work?

Facebook used an economic theory called VCG (Vickrey-Clarke-Groves), to create a second-price auction environment. Essentially, the winning bid does not pay exactly what was bid, but rather a bid slightly higher than the second highest bidder. The primary benefit of this model is that it mitigates the risk of sharp jumps in spend. Ultimately, it is a win for advertisers as it creates a stable auction environment.

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