Sometimes there are good choices, and some other times, we have TOO many choices.
Facebook ads is NO different.
They used to have ALL kinds of ad products .. sponsored stories.. questions.. offers…
If you’re advertising your product or service, where do you even BEGIN?
Seriously, Facebook… why do you make things so confusing?
It’s like they’re TRYING to confuse their customers.
Ok, so I will break it down for you. Here are the three types
Pay per click. Confused? No? Ok, let’s move on.
You pay per 1000 impressions. If you bid $5 CPM, that means you’re willing to pay $5 for THOUSAND impressions of your ad.
NOTE: CPM does NOT mean 1000 people will see your ad once. Or that 1 person will see your ad 1000 times. In fact, you have no idea what they do. In certain display networks like Google Display network, RTBs, and traditional banner ad networks, you can set you frequency cap on how many times you want your ad to show to people. But with Facebook, you have pretty much NO say in how this gets allocated.
3) Optimized CPM
Let me translate what this means.
“Let us spend whatever the HELL we want for you because you don’t know diddly squat.”
OK, I’m not being fair b/c I just ended a campaign that had insane CPM ( > $30) and I let them do that (by mistake.. i was 1/2 asleep when I kicked that campaign off).
Now, this method is telling you that Facebook will put your ad wherever the HELL it feels like so that you can get the best “bang” for your buck (whatever the best bang is depends on your advertising objective).
OK WHAT DOES THIS ALL MEAN?
Simple. There are really two types of advertisers
1) direct response – you’re driving traffic somewhere else, get them to do something, etc.
2) brand / awareness – you just wanna be seen
I can’t speak for #2 but for #1, the answer is.. YOU HAVE TO TEST!
Because you have NO idea how it’ll work out for YOU, your company, or your product. Every product/service has a different level of awareness, affinity, ease of actionability (i.e. buy, download, form filled out , etc.). In another words, NO advertiser or marketer can tell you that ONE ad product works for everyone.
In fact, I launched two campaigns to do solar lead generation for Solar One Media. They had
1. IDENTICAL offer ($0 down solar, get free home solar analysis)
2. IDENTICAL landing page
3. IDENTICAL bid
4. IDENTICAL targeting
5. IDENTICAL creatives (headline, image, copy)
Even then, the results were nowhere near each other.
Why? there are OTHER factors you have to include
1) Facebook will NEVER give you “equal” traffic
2) Some companies are running brand awareness campaign that helps with conversion
General Rule of Thumb
Remember, Facebook advertising isn’t your friend.
It’s job is to make you part ways with as much cash from as many people as possible.
Algorithmic-ally, it’s going to place traffic that’s going to MAXIMIZE it’s earnings.
So there are couple of things that it needs to consider
a) your BID - bid more, you get more
b) your BUDGET – if your budget is low, they have to “pause” yours and let someone else run. If your budget is high, then they don’t need to worry about you so they give you more, so to speak
c) your competitors for that traffic space – Remember, in display/interruption advertising, you’re bidding against EVERY advertiser of EVERY industry that’s going for that market. This isn’t search marketing, it’s demographics targeting.
d) your account history – Think about it. If you’ve have or had an account that spent a lot, of course they’re going to favor you. Simple. It’s all about relationships, as they say.
e) Facebook’s magic sauce – who knows what that is
But there are general guidelines for direct response advertising
A) If you bid CPM (normal or optimized), you’re telling them that you’re willing to pay for impressions. Any impressions.
This means they can put you anywhere really.
The risk on YOU the advertiser to generate the clicks with eye catching ads, creatives, what not.
B) If you bid CPC, you’re telling them that you ONLY want clicks.
Now the risk is on Facebook because if you don’t get clicks, then your banners ads are lost opportunity that could’ve been monetized with CPM ads.
So they’ll try and place you on the MOST eye catching part as to get the MOST clicks. If you don’t get clicks, you don’t pay. Safe investing.
So your conclusion… bid CPC, RIGHT?
First of all, ALL banner ads burn out. CPC or CPM.. banner ads are banner ads. CTR over time WILL degrade no matter where they’re placed, how you’re bidding, etc.
Second, if you don’t get clicks on CPC model, Facebook will kill it automatically. Why should they right? You’re losing them, not making them, money.
Third, you can make eCPC (effective cost per click, i.e. $ spent / click) on CPM ads if you REALLY REALLY optimize your ads, and bid ultra low.
IN fact, you can even make eCPC on optimized CPM ads REALLY low because with optimized CPM, they place you in PRIME locations like the feed.
So the answer is.. I DON’T KNOW what’s right for you.
You HAVE to test.
Start 3 identical if not same campaigns but set a fixed budget and see how the effective CPC is after the budget has been depleted.
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