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Facebook Updates CPC Calculation

Posted by | 3:28pm on Thursday, August 6, 2015
Facebook Changes CPC Calculation

Facebook is making changes to how the Cost Per Click is calculated for their advertising.   At its most basic level, a cost per click is the price (dollars) you pay to get someone to click on an ad.  Ideally the lower this number the better.  Depending on your ad objective and how you are telling Facebook to optimize your ad, you may be paying for an optimized impression.  But even if you are not paying for a click directly, this will still affect you.   Unless your objective is engagement (i.e., interacting with the ad and/or page itself), there’s a good chance your ad impressions (i.e., number of times your ad is displayed) are being optimized for clicks.  This means Facebook is serving impressions to people who meet your ad criteria with the highest likelihood of resulting in a click.

But currently (until this change is implemented), your impression is being optimized for any type of click (i.e., comment, share, clicking to “see more”, etc.)  Any type of engagement affected CPC and ultimately the fee you paid.  Engagement is valuable and incredibly important, but if your goal for a specific ad is to generate clicks to your website, why pay for engagement?  The cost to advertise on Facebook is so low, that this “overpayment” and ultimately overstatement of clicks was overlooked.

BUT in the near future, Facebook will only be using “your” objective to determine the clicks to include in the CPC calculation.  By definition this will impact the clicks you pay for.  Advertisers will no longer pay for engagement clicks if the objective is to drive to a website or an app.

What does this mean for your budget and how much you will be paying?  Well since fewer actions will be included in your CPC, and your budget will be stable (essentially); the cost per click will increase.  Please note that if your budget stays the same, your spend will still remain within your predetermined parameters.

Since your cost per click will increase, this may cause a knee jerk…OMG reaction.

But let’s think about this for a second.

As a marketer, I welcome and love engagement with my ads, but if that’s not my ultimate goal or success measure then I don’t want to pay for it.  I want to hold Facebook accountable and only pay for the specific action that I determine as my goal.  Since clicks to a website or clicks to my registration page are theoretically more valuable than an ad Like, I am absolutely, 100% willing to pay more for it.

So even though I will see fewer clicks in my reports and my cost per click will increase, I welcome Facebook finally realizing that all actions (or clicks) are not created equal. 

To paraphrase a book from Junior High School…Some clicks are more equal than others.

About Neil Rubenstein

Neil has more than 15 years of experience in integrated marketing and analytics across a number of different industries. Neil is responsible for online advertising, analytics, and measurement across all Siren clients. Part of his job is to ensure that all online advertising is implemented with analytics and measurement in mind. Neil is passionate about using the internet and social media to encourage deeper relationships with patients, caregivers, and HCP’s. …

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