Facebook Changes How CPC is Calculated to Be More Accurate

Peter Roesler, President - Web Marketing Pros

By Peter Roesler

President, Web Marketing Pros

When marketers use Facebook Ads they can either bid for their cost per click or choose to pay for impressions. With a cost per impression campaign, the ad is shown to a set number of people in the target audience based on the amount paid. For cost per click ads, the reach is determined by the bid for the maximum cost per click. Facebook has recently changed their definition of cost per click in a way that is beneficial to marketers.

One thing many advertisers may not have realized about Facebook’s cost per click bidding it that the clicks used to include clicks other than the ones directly related to the ad objective. To illustrate, if a marketer sets a cost per click budget for a click to website ad, the CPC would include actions such as post likes, shares, comments, etc. Facebook is changing the cost per click definition to only include clicks related to the ad objective. Now, a CPC for clicks to website would only include clicks to the website in the CPC calculation.

“Advertisers come to Facebook to drive business goals, like in-store traffic and website clicks, and they need to know how effective their ads are at driving their stated goal,” the company wrote in a blog post explaining the change. “That’s why starting today, as part of our latest API release, we’re updating the definition of cost per click (CPC) on Facebook to only include clicks to websites and apps, and not likes, shares and comments.”

CPC will only account for “link clicks”, the term Facebook uses to describe the clicks related to certain ad objectives. Specifically, this means CPC can be used more accurately for on ads for clicks on links to visit another website, clicks on call-to-actions that go to another website (i.e., “Shop Now” buttons); app installs; clicks to Facebook canvas apps; or clicks to view a video on another website.

This update is certainly a welcome change for advertisers who use Facebook, but it may be a bittersweet victory for those who are only now learning their CPC budgets included actions that weren’t related to their objectives. Facebook explained the slow move to change the CPC definition as part of the continued evolution of Facebook Ads.

“Over the last few years, Facebook’s ad offerings have become increasingly tailored to helping advertisers meet specific business objectives,” the blog post continued. “This update is part of that effort: it’s designed to provide measurement that’s more closely aligned with how advertisers are bidding so they can better optimize their campaigns against their stated goals.”

For advertisers who use CPC ads on Facebook, the change will mean their budgets will be spent more effectively because the clicks they pay for will only come from their desired actions. This does mean that the costs for running a CPC may increase, And it also means that the numbers for things like ad reach could could look a little different than they had in past months. The same is true for click through rates, which will decrease because the CPC ad will no longer include data from other sources of clicks.

For most marketers, who use Facebook’s Ad Manager to set up their ad campaigns, the changes will come soon and will be noted on the interface. For marketers who use a Facebook partner or API, they will need to talk to their Facebook marketing rep.

For more news about upcoming changes to Facebook, read this article about Facebook’s change to the way video ads are measured.

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