Bid Strategies and Their Differences
All of the strategies come in handy in different scenarios and they all have their strengths.
If we first look at Cost Cap and Target Cost, both of them are doing cost control.
If we say that you have $5 as your tCPA, and you have Target Cost as your bid strategy, Facebook will try to stay close to $5 until there are no longer any events left in that range. It can try to get you the events that might cost $6 and also events that might cost $4.
In the case where you have Cost Cap as your bid strategy, when you have $5 as your tCPA, it'll try to go to Lowest Cost events first. So it'll first try to bring you for instance, $1 events then $2 and so forth. Then when all the cheapest events are exhausted, it'll go to events that cost more, it might go to events that are a bit more expensive than $5 when all the cheaper events are reached, but still it'll try to keep you within your cost cap of $5 while doing that.
If we look at the differences between Bid Cap and Cost Cap;
First big difference here is that Bid Cap is controlling bids and with Cost Cap we're controlling the costs. Because we're capping bids in Bid Cap strategy, it's not as flexible as Cost Cap when it comes to constraining delivery.
Bid controls limit what FB, and of course Marvin as well, can bid in every auction. If you set a bid control of $5 and 100 optimization events become available for $5.01 bids, Facebook or Marvin won't try to get any of them (FB or Marvin is likely go after all of them if your cost control was $5).
If you'd like to control the cost of every event, then it's recommended by Facebook to use bid control.
So to recap,
Target Cost helps you with getting the most relevant events for your campaign, but you're missing on the lowest cost events that can turn into a conversion.
Bid Cap is very helpful when you're trying to control the cost of every event but it's not as flexible as the rest of the strategies.
Cost Cap is flexible and will try to bring you the lowest cost events and increase the delivery but likely to go over the cost control during the learning phase so it needs a little time to stabilize.