So you decided to create a Facebook Ad but are faced with the dilemma of choosing to optimize for impressions (CPM) or optimize for clicks (CPC). I mean really, what does it all mean anyways?
So what exactly are CPM and CPC?
CPM stands for cost per 1,000 impressions. This means you pay when people see your ad. When you set up your ad, your impressions will be optimized so your ad shows to people who are most likely to help you reach your goal. For example, if your goal is to get more people to like your Page, your ad will be shown to people in your target audience who are most likely to also like your Page.
CPC stands for cost per click. If you are paying for clicks, you’ll be charged each time someone clicks on your ad or sponsored story. When you pay for clicks, your ad will be shown to the people who are most likely to click on your ad.
Why Would You Select CPM?
The main reason why you would select CPM is that usually actual ads will perform better than Facebook’s recommended CPM and CPC bid rates, meaning that you will most likely pay less per click by selecting CPM. The only way to maximize your performance beyond a stated bid rate and figure out the lowest possible bid is to run your campaign on a CPM basis. Keep in mind that your CPM bid has nothing to do with how it will actually perform. For example, if you bid $1.00 for 1,000 impressions, but your click through rate is high, your ads could end up obtaining a CPM of $0.15 even though you bid $1.00.
Keep in mind, that if you choose to run your ads through CPM campaigns, you must monitor your ads closely for two reasons:
- You could easily burn through your budget on ads that are not performing well
- Your ad performance will decrease over time
Why Would You Select CPC?
The main reason you would select CPC is because you are only charged when people click on your ads. Also, Facebook tends to place CPC ads in areas of the page that will generate more clicks. By bidding a specific CPC rate on ads, you will get more clicks by default than if you selected CPM because of ad placement.
If you have a low budget and you don’t have time for optimization, your best bet is to just go with CPC but keep in mind that while CPC is a great way to start your campaigns out initially, eventually you will want to select CPM method for higher performing ads.
The real key to Facebook advertising is testing, testing, testing! Create different ads with the same target demographics and find out which one works best for you. If you have the budget, run CPM and CPC ads simultaneously to determine which one works for you. If you are on a limited budget, or don’t have the time to effectively monitor your ads, start out with the CPC method until you are ready to invest more money and time on optimizing your ads.
Growing your business through Facebook is important, but it can feel a little overwhelming sometimes. We are here to help make the process less painful for you. Whether you are thinking about running Facebook Ads yourself but are not experienced in Facebook advertising or prefer that someone else run your ads on your behalf, we can help! Contact us for a FREE social media analysis!
Facebook CPM and CPC has been written by Jessica Damiani, Social Media Coordinator for Webhead Interactive.
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Blog by Webhead Interactive