It's actually very smart to do it the way you are doing it. We do this all the time and have tested it extensively. What you want to do is to see if your ad is getting enough "reach" at the 20 cent click level. Reach is the amount of times your ad is shown.

If there aren't many others bidding, you can bid pretty low and still get lots of reach. However, if your ad isn't getting shown much, you'll know that you should raise your ad price.

Make sure you also test using Optimized CPM versus paying for clicks as well.

Hope that helps.

Whenever you are running a new ad campaign I would recommend you go through and AB test all of your options. I wouldn't suggest focusing on manually placing a bid though.

Facebook is extremely effective, a lot more than people realize & a lot more than Facebook advertises. Using their "optimize my bid for _________" will make sure that you are getting the most out of your money. If you are manually placing a bid you wont be able to figure out how far you can scale your ad which is a real pain for testing.

Instead of struggling to get Facebook to accept your $0.20 bid I would spend more of my efforts AB testing demographics, interests, copy, & images trying to find optimized ads that convert closer to $0.10 CPC.

If you have any more questions on this feel free to just shoot me a message or schedule a call. If you're spending any decent amount of money on Facebook ads it will probably be worth your time to have a professional manage them or at least talk with one before you set up your campaign.

Facebook gives you an average bid based on the target audience you have specified. I have found, bidding well above the recommended ( .75-1.00) will help you to get a better rate than if you just bid lower to start with. Advertising rates,in general, are different for everyone based on the account's spending history. AKA - The more you spend, the lower your rates over time.

Try bidding higher and you'll notice FB giving your ads favor from the beginning. This is really the best way to go on most platforms.

Depending on what you are promoting, PPC might not bring the best ROI.

The more targeted your ads, the better the result and the cheaper the price. I prefer using the Power Editor the do Optimized CPM (cost per impression) BUT if you think about it.... it's only wise to pay for people to "see" an ad IF you know that those people are highly qualified people. So I make a custom audience and run the ad from the Power Editor. In doing this, I have been able to compile some astounding Click Through Rates.
Just for an example of the power in this method:
One ad cost me $3.81 before I had 3 immediate buyers 75 new page likes and over 270 clicks.
Had I paid for clicks, even with a great Cost per clck, I would have spent much more to get the same result.

Just some food for thought from a Facebook Ads nerd. :)

Hi, Facebook advertising platform works in an auction principle: at the same time numerous people are competing for a limited advertising space in order to reach some target audience. The most efficient way to allocate that space is by offering it to those who are bidding the most (although that won't always be the case). Essentially, if you set a lower bid than everyone else has set, you are bound to lose those auctions, and your ads will not be displayed at all - something I'm sure you wouldn't be happy about. So although your aim is to get the lowest cost per click, you might consider a slightly different approach.

I agree with something Laura said about setting a much higher bid at the beginning of the scheduled campaign, so that Facebook gives you a preference and starts pushing the ads. However, the maximum bid you set doesn't mean you will pay that price - you will pay only as much as you need to win the auctions.

Now, the most important thing about getting lower cost per click, which is way too often disregarded, is getting the *highest possible click-through rate* for your ads. If you think about it, Facebook only benefits when someone clicks on your ads, so if there are two ads with the exact same bids, targeting the exact same audience, it will give preference to that which is performing better - receives more clicks per number of impressions, and generates more revenue to Facebook. Even if you disregard your bid completely and leave it automatic, you can have much lower costs by focusing on the click-through rate, and that can be achieved by: choosing the best ad placement (desktop news feed, mobile news feed, sidebar), picking the most relevant target audience, and choosing the most effective ad design, including the headline, ad copy, visuals and even call-to-action buttons. If you manage to find the best performing combination through split-testing, you will need to think less about what is the right bid.

I hope that helps, and if you wanted to discuss it further, feel free to get in touch for a quick chat.

Cheers!
Adomas