Sep 2020

How to Maximize Your Facebook Marketing Campaign with Cost Cap

Your Favorite Pittsburgh Marketing Agency Teaches You How to Handle the Cost Cap Feature for Facebook Campaigns

Last Spring, Facebook announced the roll-out of a new bidding feature called Cost Cap. With this feature, businesses could maximize their conversion rates while still abiding by a set budget. Before this option rolled out, they had to decide whether they wanted to focus on optimizing their conversion rates or keeping a strict cap on their budget. 

If you’re still new to paid Facebook ads, learning the Cost Cap feature can be extremely beneficial down the road. That’s why Pittsburgh marketing guru, Responsival, is offering a quick guide on how to make the most of the Facebook cost cap feature. 

What is Cost Cap?

Pittsburgh marketing agency — Responsival — breaks down the concept of the cost cap option

facebook business profile

For a while, marketers had to choose between maximizing their conversion volume and enjoying cost predictability for their Facebook campaigns. In other words, they couldn’t limit campaign costs while also getting the highest volume possible for their conversion rates. But since the new release of its cost cap bid feature last spring, businesses can now enjoy a solid middle ground between both focuses.

How does cost cap work?

Cost cap is designed to drive as many results as possible at or below a set maximum cost. You have the power to set the max cost per action (CPA). To start, you just need to enter your daily budget as you schedule your campaigns. You can set the cost bidding according to the amount you can pay per action or per impression. For example, you can set your max CPA at $75 per sign-up. This tells Facebook to avoid using more than $75 on your cost per conversion whenever possible. That being said Facebook, might use slightly more than $75 — think $75.09 — to achieve a conversion as it won’t dramatically increase the average cost per conversion. However, it will still deliver the cheapest results to you first before hitting the higher prices. 

Who benefits the most from using the cost cap?

Businesses that are looking to get the most bang for their buck can benefit greatly from the cost cap feature. Whether they are a yoga studio looking to increase their sign-ups for an upcoming workshop or a restaurant that wants to advertise their new COVID-19 policies and encourage people to make a reservation, they can use cost cap to their advantage. 

That being said, it’s important to consider your campaign’s unique goals and budget when deciding whether or not cost cap is the right option for you. Businesses that analyze their average cost per optimization event and already have a solid grasp of their cost per action will benefit the most from this feature. To get the most out of this feature, Facebook also encourages businesses to use their full budgets to help keep their average CPA below your cost control. 

Pros + Cons of Cost Cap

How cost cap can positively impact Pittsburgh marketing campaigns


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Like any other Facebook bid strategy, cost cap comes with its own set of pros + cons. It’s crucial for your business to consider them as you decide whether or not you want to go with this strategy for your Facebook ad campaign.

Pros

  • Maximizes conversion volume without throwing your budget in a tailspin
  • Lets you keep your costs within a set budget
  • Reduce the number of expensive clicks on your ad
  • Gives you more flexibility than bid cap would

Con’s

  • You might not end up spending all of your budget 
  • It can take some trial + error to determine where you should be setting your budget
  • As your budget increases, your cost per action might also increase

In the grand scheme of things, there is no “perfect” Facebook ad strategy to choose from. It all boils down to your company’s primary goals + strategy. 

Cost Cap vs. Bid Cap

Learn the differences between these two strategies

woman using macbook air

Cost capping and bid capping are similar strategies that marketers can use for their paid Facebook ad campaigns. However, there are several notable differences between the two techniques. 

If you select the Bid Cap option, Facebook will only pursue conversions that fall under your set budget. Even if a conversion costs only $0.10 more than your bid cap, Facebook will not pursue the option. Cost Cap, on the other hand, focuses on the average cost per action. This means that it will still pursue slightly more expensive conversions that will still keep your average CPA at your original budget. 



Facebook cost cap bidding can produce favorable results for businesses working with limited budgets. When it comes to advertising products + services in Pittsburgh, marketing campaigns that use cost cap bidding typically perform well. For more advice + guidance on improving your social marketing strategy, contact the team at Responsival today.

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