How the Meta Ad Algorithm Works in 2025

The Meta’s ad algorithm plays a huge role in shaping what users see on Facebook and Instagram. This system decides which ads get shown, who sees them, and how much advertisers pay.

Understanding how it works can help you improve your ad performance, reach the right audience, and maximize your budget. In this guide, we’ll break down how the Meta ad algorithm works, what factors influence it, and how you can optimize your campaigns for better results.

Breaking Down the Meta Ad Algorithm In Simple Terms

At its core, an algorithm is a set of rules that helps a system solve problems or complete tasks. The Meta ad algorithm is a complex system that determines which ads to show, who sees them, and when they appear. Understanding how it works is key to running successful ad campaigns.

Here are the 7 major elements of the Meta ad algorithm:

1. User Engagement

Meta closely tracks how users interact with content. Think likes, shares, comments, and clicks. Ads that generate more engagement are more likely to be shown to users because they indicate interest and relevance.

2. Relevance Score

Every ad is given a relevance score based on how well it matches the interests of its audience. Ads with higher scores are shown more often and at a lower cost, while low-relevance ads may struggle to get impressions.

3. Ad Quality and Format

Meta prioritizes ads that meet its quality standards. High-quality visuals, clear messaging, and properly formatted content get better placements. Poor-quality ads, or those that don’t follow guidelines, are shown less frequently.

4. User Behavior Data

Meta uses browsing history, past purchases, and search activity to understand user preferences. This data helps personalize ad delivery, ensuring users see ads that are relevant to their interests.

5. Machine Learning Models

Meta’s AI system continuously analyzes user data to predict what ads someone is most likely to engage with. The more data it collects, the better it gets at showing the right ads to the right people.

6. Bid Strategy and Ad Set Budget

Your bid amount and budget impact how often your ads are shown. Advertisers with competitive bids and well-managed budgets have a better chance of winning ad placements in Meta’s auction system.

By understanding these key factors, you can optimize your ads for better performance, lower costs, and improved targeting, making your campaigns more effective in reaching the right audience.

A quick mention: Meta’s Event Match Quality (EMQ)

An often overlooked key factor in the Meta ad algorithm is Event Match Quality (EMQ), a score that measures how accurately Meta can match your conversion events (like purchases or sign-ups) to real users.

A higher EMQ means better attribution, stronger optimization, and lower costs. If your EMQ is low, Meta struggles to connect conversions to users, making targeting less effective and increasing your ad costs.

In recent years, privacy regulations, tracking restrictions, and ad blockers have made it harder for Meta to collect data. This directly affects several key elements of the Meta ad algorithm, including relevance scoring, user behavior tracking, and machine learning optimization.

With less data to work with, the algorithm struggles to properly identify the right audience, optimize ad delivery, and keep costs efficient. As a result, many advertisers experience higher CPAs, weaker targeting, and lower ad delivery.

All symptoms of a low EMQ.

Improving EMQ comes down to better tracking. Using both the Meta Pixel and Conversions API (CAPI) helps Meta receives high-quality data, including customer details like email and phone numbers (hashed for privacy). However, even with both the Meta Pixel and Conversions API, about 20% of data is still losts and never reaches your algorithm.

If you want to dive deeper into EMQ, you can read our recent blog "What is Event Match Quality in Facebook Ads Manager?" for a full breakdown.

How Ads Are Selected by Meta

Central to this algorithm is an ad auction mechanism that decides the ad display order based on multiple criteria, in a real-time context.

The Ad Auction Mechanism

• Bidding: Advertisers enter an auction with a preferred bid, signaling their monetary commitment for ad objectives. While important, the bid is only one piece of the comprehensive ad selection puzzle.

• Estimated Action Rate: This predicts the likelihood of a user completing the desired action, such as a click-through or purchase. It plays a crucial role in ad prioritization.

• Total Value: Reflecting a mix of bid, action rate predictions, and relevance score, the total value determines the auction’s winner. Ads with the highest total values are deemed most suitable to display to users.

Strategies for Optimizing Ads within the Meta Algorithm

To fully benefit from the Meta ad algorithm, your ads must be both appealing and competitive. Below are key strategies to improve your campaign performance.

1) Develop Compelling Content

• Leverage High-Quality Visuals – Strong imagery and videos make ads stand out. Combine them with concise, persuasive text to capture attention.

• Implement A/B Testing – Test different versions of your ads (headlines, images, CTAs) to see what resonates most with your audience.

2) Use Different Types of Ads

Meta prioritizes varied content to keep users engaged. If people see the same type of ad repeatedly, they lose interest, leading to lower engagement and higher costs. Meta’s goal is to keep people one their platform.

Use a mix of image, video, and carousel ads to maintain freshness and increase engagement. Meta’s algorithm rewards advertisers who create dynamic, engaging content by delivering their ads more efficiently.

3) Fine-Tune Audience Targeting

• Audience Segmentation – Break down your audience into specific groups based on demographics, interests, and behaviors. But be cautious, over-segmentation can lead to higher CPMs due to limited reach.

• Utilize Lookalike Audiences – Expand your reach with Facebook’s Lookalike Audiences, which help you find new users similar to your existing customers, increasing efficiency and scale.

4) Ensuring the Algorithm Receives More Data

Meta’s ad algorithm relies on data to optimize campaigns, but increasing privacy restrictions and ad blockers limit how much it receives. Like mentioned before, even with Meta’s Pixel and Conversions API (CAPI), a significant amount of data is lost (about 20%),leading to weaker optimization, higher costs, and inaccurate reporting. We can't stress this enough.

Why the Pixel and CAPI Still Lose Data

• The Meta Pixel is blocked by ad blockers, privacy updates (iOS14+), and cookie restrictions, making it unreliable for tracking.

• CAPI (Conversions API) improves data accuracy by sending events from your server, but it still loses data, especially for cross-device tracking and incomplete identifiers.

MarvelPixel’s MarvelLink: The Fix for Data Loss

MarvelLink works alongside CAPI to recover lost data, ensuring the algorithm receives up to 35% more high-quality data to optimize efficiently.

• Increases EMQ – More accurate tracking means Meta can match conversions better.

• Lowers CAC – With better data, Meta finds the right buyers faster, reducing acquisition costs.

• Boosts ROAS – Smarter optimization means higher returns without changing your ad strategy.

The best part? No extra setup is required. Simply integrating MarvelLink improves tracking automatically, so you spend less and convert more.

Continuous Monitoring and Adjustment

Success in Meta advertising isn’t about setting up a campaign and letting it run unchecked. The best-performing advertisers continuously track, analyze, and optimize their ads to ensure long-term success.

Regular Performance Tracking

Meta provides detailed analytics that allow you to assess how your ads are performing across different metrics, such as:

• Click-through rates (CTR)

• Cost per acquisition (CPA)

• Return on ad spend (ROAS)

• Engagement metrics (likes, comments, shares)

By closely monitoring these KPIs, you can identify patterns. Which ad creatives are driving the best conversions, which audience segments are the most engaged, and where performance is dropping.

Use data-driven decisions to make incremental improvements, such as tweaking ad copy, adjusting visuals, or testing new CTAs. However, be careful blindly trusting any ad platform data. Due to attribution issues, ad platforms take credit for the same sales, inflating your performance. Making them seem to be driving more sales than they do in reality.

You can read more about attribution here: Difference in conversion attribution between marketing platforms explained.

Budget Adjustments

One of the most powerful levers for campaign optimization is budget allocation. Instead of spreading your ad spend evenly across all ads, shift more budget to top-performing ads and pause or adjust the ones that are underperforming.

Best practices for budget adjustments include:

• Scaling winners gradually – Increasing ad spend too fast can disrupt performance. Scale by 10-20% per day to maintain stability.

• Cutting ineffective ads early – If an ad isn’t generating conversions after a reasonable testing period, rework it or stop it entirely.

• A/B testing before scaling – Before increasing the budget, test multiple versions of your ad to ensure you’re scaling the most effective variation.

Challenges and Considerations

While the Meta algorithm provides a powerful advertising framework, challenges remain. Understanding these potential pitfalls can help you stay ahead of performance issues and adapt more effectively.

Ad Fatigue: Keeping Your Ads Fresh

Even a high-performing ad will eventually lose its effectiveness if shown to the same audience repeatedly. This is called ad fatigue, and it leads to:

• Lower engagement rates

• Higher cost per click (CPC)

• Reduced overall ad performance

To combat this, regularly refresh your creatives by:

• Rotating ad types (videos, carousels, static images)

• Changing copy and visuals to keep content engaging

• Expanding audience segments to avoid overexposure

A general rule of thumb from our experience is: frequency (how often someone sees your ad) in the apparel industry is to stay between 1-2 on Top of Funnel, up to 7-8 on Middle of the Funnel (engagers) and up to 12 on Bottom of the Funnel (existing customers).

Privacy Limitations

Privacy regulations such as Apple’s iOS updates, GDPR, and CCPA have reduced the amount of data available for tracking and targeting. These limitations impact how effectively Meta can optimize ads and attribute conversions.

To adapt, advertisers must:

• Prioritize first-party data – Collect emails and customer data directly through lead forms and website interactions.

• Use server-side tracking – Implement the Conversions API (CAPI) to send data directly to Meta, improving tracking accuracy. Ideally complimented with MarvelPixel for further accuracy.

• Monitor attribution models – Expect discrepancies between platform-reported conversions and actual backend sales (e.g., Shopify, Google Analytics).

Keep Up With A Changing Algorithm

Meta constantly updates its ad delivery system, meaning what works today might not work tomorrow. Algorithm changes can affect:

• Audience targeting

• Ad costs and bidding efficiency

• Preferred ad formats

To stay ahead:

• Keep testing and iterating – Run experiments to see how algorithm shifts impact performance.

• Stay informed – Follow Meta’s official updates, industry blogs, and advertiser communities.

• Diversify your strategy – Relying solely on one approach can be risky. Test broad targeting, interest-based targeting, and lookalike audiences to see what works best over time.

• Implement MarvelPixel - By feeding the algorithm up to 35% more high-quality data, you not only optimize your targeting, but it also allow retargeting up to 365 days. While retargeting is lost after 90 days with the regular Meta Pixel and Conversion API.

By actively monitoring, adapting, and optimizing, you can keep your Meta ad campaigns profitable, even as privacy laws tighten and algorithms change.

Conclusion: Mastering the Meta Ad Algorithm for Better Results

Meta’s ad algorithm is a powerful tool for reaching the right audience, but success comes from understanding how it works and staying updated on changes. When you know what influences ad delivery, you can create campaigns that engage users and drive real results.

Digital marketing can feel complex, but tools like MarvelPixel simplify the process by centralizing data and providing clear insights. This helps you track performance, refine your strategy, and make smarter marketing decisions.

On top of that, the MarvelLink feature makes sure events gets sent straight into the algorithm, securing practically immediate improved results without having to even change strategy.