Facebook Update: How Cost per Click is Measured

Facebook is currently reconfiguring how it charges brands for clicks on ads, and brands should be happy about the change.

Until recently, brands that were advertising through Facebook would be charged per click on links back to their website. Brands would also be charged whenever they got a like, whenever their content was shared, or whenever someone added a comment.

Likes, shares, and comments can help a brand move up in the all-import rankings of Facebook’s news feed, but all the likes in the world aren’t going to get users converted into actual paying customers.

But, according to Facebook’s announcement July 8th, Facebook’s new policy for brands will exclude the like, share, comment areasĀ from costing brands anything.

What will cost brands advertising money is all a part of Facebook’s canny integration of other services and efforts to keep brands, and consumers, on and coming to Facebook. Brands will be charged for clicks back to their websites, but also for clicks on Facebook’s new “Shop Now” feature, links that go to another site, links for installing an app, and clicks to a video on another site, which is certainly an encouragement for brands to keep their video ads native to Facebook which, again, reinforces the social media giant’s efforts to gain ground in the world of video hosting.

And because Facebook is using its demographic information about its very large user base to very specifically target the ads, it can seek out users that will be more likely to actually click through an ad to an e-commerce site instead of just finding people who will do some social sharing but won’t actually click through or buy anything. This allows Facebook to increase the scarcity of these targeted ads, and therefore charge more for them.

Facebook’s changes benefit brands because, while advertising may be more expensive, the ads are more targeted, and the brands that seek out this kind of advertising would prefer to find customers that click directly through, as opposed buying ads that just generally “raising brand awareness” or the like.

Additionally, if brands want to continue buying ads the old way, Facebook is leaving them that option as well. Overall, it’s a savvy move for Facebook, and a smart way to further its long-term goals.

These changes will be implemented in the Power Editor or Ads Manager in the coming weeks.

Source: Facebook for Business, SocialMedia Today

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