Facebook CPC Ads

By Alicia Whitehouse, Associate Director, Search

Facebook’s ad platform can be a highly efficient means of reaching your target audience. When setting up a Facebook ad campaign, you’ll have to choose between two pricing models: CPM (cost-per-thousand-impressions) and CPC (cost-per-click). In theory, your choice of pricing models would simply depend on the goal and budget of your campaign. Ideally, you would have the option to test out both.

For the CPM model, you can work with a Facebook representative for guidance, but it requires a minimum budget of $30,000. The CPC model is a self-service platform that is easy to set up and manage, just like a SEM campaign. Ads only appear on the right hand side of the user interface within your profile pages. The homepage can only be targeted through the CPM model. There is some great information in their FAQ section, www.facebook.com/advertising, but we’d like to give a little commentary on what we think works well and what needs improvement. Here is a quick run down on what your options are when you set up a campaign.

Ad Format: Ads allow a 25 character headline, a 135 character description and a 110 x 80 pixel image (optional but we highly recommend). There is no display URL.

Ads shown on right hand bar. Ads are shown based on your indicated demographic and stated interests and hobbies on your profile page. Ads are not determined by any other activity you undertake on Facebook. This is not a keyword search campaign.

Demographic Targeting: Ads can be targeted to all Facebook users or based on demographics or interests users indicate on their Facebook profiles. For example, you can target only men currently enrolled in college in California.

Keyword Targeting: Target users based on the interests listed in their personal profiles.

Estimated Reach: An estimate on how many Facebook users your ad can potentially reach based on the criteria you select. The interface will provide auto-suggestions for keywords when you start typing and you can only select keywords that already exist in the system.

Estimated CPC: An estimated CPC range with your selected criteria. The process is more opaque than traditional SEM, but in theory the higher CTR ads generate, the lower the CPC according to their “unique quality score.” By limiting overall impressions, you can increase CTR and lower CPC. We found this isn’t always true.

Campaign Structure: There can be multiple ads within a campaign, but only for different search criteria. There is no ad rotation for the same criteria but you can set up as many ads as you want and can be edited at anytime which activate almost immediately.

Reporting: Standard campaign reporting, at the account, campaign, and ad level with summary, monthly, weekly and daily reports. The best feature is the demographic reporting, allowing advertisers to see performance by gender, location, age group, etc.

Campaign interface: An easy to use dashboard where you can quickly check campaign performance and, over time, you can graph data and watch how your optimizations affect performance.

Some of the best practices we have started developing show that Facebook rewards high click volume campaigns with lower CPC rates not necessarily high CTR ads. Average CTR for these campaigns have been between 0.01% to 0.08%. Yes, that’s correct, you’ll see a huge amount of impressions with low click volume. (Honestly though, do you click on those ads?) We didn't notice a rise or decline in CTR correlating to the changes in CPC but we definitely noticed that there are a few trendy entertainment keywords people are gossiping about which performed better than other keywords you’ve never heard of in terms of CPC. The best feature about the self-service program is that you can see what types of demographics are working the best for your campaign and then you can optimize accordingly. You can change things on the fly and create unique ads for different demographic and keyword targets to ensure the highest CTR. Other tips are:

• Start campaigns at CPCs higher than the recommended ranges to gain impressions and gradually lower bid over time.
• Phrase the headline text in the form of a question. Instead of “Buy New Snowboards” you might want to try “Love to Snowboard?"
• Use the CPC platform if you are looking for low CPC and high traffic. Our CPC ranged between $0.20 to $0.80 and helped double the click volume for some of our small Google/Yahoo! campaigns.
• Watch your account closely; you’ll notice the minimum bid will change on you throughout the day. It’s definitely not a set-it and forget-it type of platform.
• Set up many different campaigns so you can isolate different variables.

Facebook CPC is definitely not the ad program for all advertisers but it’s worth a test if you’re looking for low cost volume where you can target a specific audience.


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