Understanding Facebook ADs – CPC Vs CPM

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At techjaja we have highly considered buying advertising space on Facebook, we are always  confronted  with the choice of cost per click (CPC) or cost per thousand impressions (CPM). Without
properly understanding Facebook’s advertising model and what each of these options gets you, you might find this a confusing or difficult choice to make.

So lets get down to the points that will help you to make the choice that’s right for your business. First of all, it’s important to understand how advertising on Facebook works.

Facebook ads can be targeted to users based on various criteria, including age demographic; gender; key words and workplaces. Facebook operates using the ‘Search’ model of selling advertising space, which
relies on the bidding system. Therefore the greater the value you attribute to your ad the better your chances of outbidding another ad vying for the same placement. CPM and CPC form part of this search
model.

What is CPM?

CPM pricing is defined as a cost attributed to every 1000 impressions your ad will have (or times your ad will appear) on a website. The CPM model is used by most content web portals, where you buy a certain number of impressions for a certain amount of rand over a certain period of time. You do not have to bid for preferential placement thereby guaranteeing the exact number of impressions over the period.

The Search CPM that is used by Facebook and other web portals is used in conjunction with a bidding system. No guarantees are made about the number of impressions served as it is the value you attribute to your ad as well as its popularity that will determine this, and this is at the discretion of the web portal.

With CPM bidding, you’re effectively gambling with your Facebook advertising budget. You might get a fantastic result, with tons of super-cheap clicks. But you also run the risk of spending your entire
budget and not getting any clicks at all. Publishers risk nothing on ad performance with a CPM system and get paid for every impression. As a result of the one-sided nature of both the search CPM and content web portals CPM models, clients are seeking an alternative that can offer them some sort of guarantee of performance and a better return on investment (ROI).

Imagecredit: fightpath

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