When you set up a Facebook advert you have three options on how you are charged for that ad. By default this is set to oCPM but you can also choose to bid for CPM or CPC.
That’s a whole lot of acronyms but what do they mean?
CPM – Cost Per Mille
That’s quite a misleading title. If you choose to be charged for CPM you will be charged per 1,000 views of your ad. If you want to be charged this way you will need to choose it in the bidding section when you set it up. I’ll show you how to do this later.
oCPM – Optimised Cost Per Mille
Facebook knows it’s users, it knows which users are more likely to take specific actions on Facebook. When you create an ad it knows who to show it on depending on what the goal of your ad is.
If you set up a advertisement, Facebook will automatically optimise it to reach people who have responded positively to that type of ad before. For example if you set up an ad to get more page likes it will show your ad to people who have responded well to page like ads before. This should result in more actions for your budget than either of the other options, so more likes or more intereactions.
In PowerEditor you can choose to bid for your oCPM as well as accepting the defalt bid that Facebook offers you.
CPC – Cost Per Click
Choosing this option means that you will be charged per click through to the link within your Facebook advertisement. This could be a click through to your website, your Facebook page or a post on your Facebook page depending on what sort of ad you set up.
Which Should You Use?
When I first started using Facebook advertising I would split my budget between CPM and CPC, I soon discovered that I got better results and got a better value if I chose CPM.
Now I tend to stick to oCPM for my ads. Why? Facebook knows it’s users better than me – It will get me better results with no extra effort for me.
The only time I question using oCPM is when I am looking for more than one action from an ad. For example, we are currently ruining a competition on the We Teach Social Facebook page. I am using oCPM advertising to attract new users to the competition tab on the page. The ad is optimised to reach people who are most likely to click the Like button but I want more than just a Like, I want people to enter the competition and this is how I will measure my success. Are the people Facebook reaches with the Like ad the same people who like to enter competitions?
In this case it may be worth doing some split testing, setting up two identical ads, for the first one I would use oCPM for the second one I could bid for CPM. Whichever of these ads got me the most competition entries should be the method I use for the remainder of the campaign.
Jon Loomer ran an experiment to check that oCPM was still providing better value for money. You can read that post here.
When to use CPC?
Facebook admits that CPC isn’t the most cost effective way to advertise. Because of this it hides the option away in advanced options in your Ads Manager.
“You can only pay for clicks if you choose See Advanced Options when you’re setting up your ad, or if you’re advertising an external website. This is because paying for clicks isn’t as valuable if your goal is to get people to take an action on Facebook.”
Even though this suggests that it may be worth using CPC for ads that direct to a website I still prefer oCPM as once again Facebook knows who is most likely to click a link to a website.
How to choose CPM or CPC from Ads Manager
All ads are automatically set to oCPM, if you want to use one of the other options here’s how:
When you have finished constructing your advertising campaign scroll down to until you find the ‘Bidding
Select the checkbox ‘Choose the amount a [action] is worth to you’
Now you have the choice of letting Facebook automatically set the bid for you or you can manually set the maximum bid.
How to choose CPM or CPC from Power Editor
Pricing is handled at the ‘Ad Set’ level. Select the ad set you want to set pricing for and scroll down to ‘Optimisation & Pricing’. Select the checkbox ‘Set the max you are willing to bid per [action]’.
I still think that oCPM is the only way to go for ads but it’s worth trying out the options to see how they work for you.
Jason HJH says
Appreciate your article. One thing though, CPM is a marketing industry jargon and it actually refers to Cost Per (Thousand) Impressions, not a million. Hope this clarifies.
Amanda Webb says
Yes of course you are right, thanks for the heads up. I’ll edit the post.
i only have one question that confuse me which is, i have a campaign on fb that has a good ctr which is 17 clicks for every 1000 view and that cost me about 5$, if i switch the campaign to cpm will i be charged for the cpm+the clicks or just the cpm only?
Amanda Webb says
CPM only 🙂
Miguel Valdez says
Is posiible to know the price of the CPC of one campaign, if i know the target and the budget? Migel
Amanda Webb says
As far as I know no. Would be interested if you find any info on it though. You can bid for your ads manually which can help.
Diego Ribeiro says
Loved your post, thanks!
But when using oCPM, should I set the maximum bid manually or just use the recommended value?
Amanda Webb says
I tend to go for recommedations.