Here's How Facebook Just Redefined Cost Per Click

Chris CrumAdvertising

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Facebook is changing how it measures cost per click (CPC) for advertisers. This comes as part of its latest Ads API release.

From now on, CPC will only account for what Facebook calls "link clicks," which are clicks related to certain ad objectives like: visiting another site, installing an app, or viewing a video on another site. This also includes call-to-action clicks and clicks to Facebook Canvas apps. It will no longer account for what Facebook refers to as "engagement clicks," which include likes, shares, and comments.

Do you think this is the right approach for Facebook to take? How do you expect it to affect your campaigns? Discuss.

As a result of the changes, Facebook says advertisers who care about link clicks will see better returns on their ad spend and more efficient spending of budgets.

"As a result of this change, some campaign reporting metrics related to clicks may look different," the company notes. "By excluding likes, shares and comments, CPC may increase but will also become more valuable as it counts only the clicks you want. Similarly, it may look like your click-through rate (CTR) has decreased; again, this is because the CTR will no longer factor in the additional clicks."

"If an ad has lots of likes and shares, that’s a signal of high-quality content being delivered to the right people," it adds. "This positive signal helps ads perform better at auction, and advertisers can still bid for engagement clicks (including comments, likes and shares) by choosing other optimization options if they wish. These outcomes, however, will not be tracked in the updated definition of CPC."

So what do advertisers really think of the change? Well, opinions are varied, but there is a a pretty good amount of optimism.

"CPC bidding could become a lot more efficient," says Brad O'Brien, Director, Paid Social for digital marketing agency 3Q Digital. "I don't think it means CPCs would go down; in my mind it probably means they will go up. If there were 5+ means by which Facebook considered a 'click' and now there's just one - overall click volume will go down and likely mean a bit more costly, but more efficient clicks."

"This will also give you a truer measure of conversion rate, and conversion rates will go up," he adds. "You're only looking at real clicks to your site or app. The possible higher CPCs and the likely improved conversion rates are something to keep an eye on in the coming weeks.”

Internet Retailer shares some additional thoughts from industry folks:

The new definition will help advertisers, says David Zelniker, product manager for digital marketing vendor Kenshoo Ltd. “This change allows our clients, focused on performance marketing, to pay for the action they care about most,” he says.
 
The change also aligns Facebook with industry standards, says Yaniv Makover, CEO of content marketing startup Keywee Inc.
 
“This is another step in Facebook's move from a social platform measuring social clicks to a premium platform for advertisers,” he says. “By changing the CPC to this new definition, it is more aligned with the rest of the industry, and it shows that Facebook is confident it can deliver.”

Those who buy through Ads Manager or Power Editor won't have to do anything for the time being. Facebook will share further info accordingly. Those buying through a Facebook Marketing Partner are urged to speak with that partner to get an idea of when they'll be implementing the new API with the updated CPC.

Those buying through the Ads API (v2.4) can begin buying ads with the updated CPC immediately. Facebook will still support the old way until October 7.

If you're a developer using Facebook's Marketing APIs, you'll probably want to read this.

Related Reading: Salesforce Report Looks at Facebook Ad CPM Trends

Let us know what you think about Facebook's changes to CPC in the comments.

Image via Facebook

Chris Crum
Chris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.