The Meta ad auction determines the winning ad by calculating the highest "total value." This value is a combination of three main factors: the advertiser's bid, the estimated action rates (the likelihood a user will take the desired action), and ad quality. The overarching goal of this system is to select the ad that maximizes value for both the user (by showing them relevant and high-quality content) and the business (by helping them reach their objectives). This balanced approach ensures a positive user experience while delivering results for advertisers.

B. The auction is not solely based on the highest bid; a lower bid can win if the ad has higher relevance and quality.

C. The auction uses forward-looking predictions for a specific ad, not just a comparison of an advertiser's past overall performance.

D. The predicted engagement (or estimated action rate) is only one of the three core components used to calculate total value.

1. Meta Business Help Center, "About the ad auction." This official documentation states, "To determine the winning ad, we find the ad with the highest total value. The goal of our ad auction is to create the most value for both people and businesses... Total value is a combination of 3 major factors: Bid, Estimated action rates, Ad quality." (Meta, "About the ad auction," Ad Auction section, Paragraphs 1-2).

2. Meta Blueprint, "Ad Auction and Delivery Overview" Course. This course explains the core principle: "The ad that wins the auction is the one with the highest total value. The total value is decided by your bid, our prediction of how likely the person you’re reaching is to take the action you want them to take, and the quality and relevance of your ad." (Meta Blueprint, "How the Ad Auction Works" module).