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Facebook announces a change in the way it charges brands for ads

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Facebook announces a change in the way it charges brands for ads

Facebook announced today that it is changing the way brands are charged for ads on the social platform. As per the new update, Facebook said it has changed its definition of cost per click (CPC) to include only clicks to websites and apps and not likes, shares and comments.

“This update is intended to help advertisers better understand how their ads perform against their objective. In the coming weeks, this change will take effect in Ads Manager and Power Editor as well,” said Facebook in a statement.

Prior to the update, Facebook’s CPC would take into account any click taken within an ad unit—a like, a comment, a share, a click to a website, “continue reading,” etc. The new update means a click will only be counted in the following cases—clicks to visit another website, call-to-action clicks that go to another website (i.e., “Shop Now”), clicks to install an app, clicks to Facebook canvas apps and clicks to view a video on another website.

Explaining the logic behind the change, Facebook said, “Over the last few years, Facebook's ad offerings have become increasingly tailored to helping advertisers meet specific business objectives. This update is part of that effort. It's designed to provide measurement that's more closely aligned with how advertisers are bidding so they can better optimize their campaigns against their stated goals.”

Once this change goes into effect, separating link clicks from engagement clicks (including likes and comments) means ad budget will be spent more efficiently no matter if the advertiser bids for clicks or engagement, claims Facebook.
The company cautioned that as a result of this change, some campaign reporting metrics related to clicks will look different. “By excluding likes, shares and comments, CPC will increase but will also become more valuable as it counts only the clicks you want. Similarly, it may look like your click-through rate (CTR) has decreased; again, this is because the CTR will no longer factor in the additional clicks,” explained Facebook.

For advertisers buying through a Facebook interface (like Ads Manager or Power Editor) will be provided further information about the updated CPC's implementation in the interfaces. Brands buying through a Facebook Marketing Partner will need to speak to the partner to understand when they will be implementing the new API with updated CPC.

Brands buying directly through the API can begin buying ads with updated CPC effective today in v2.4 of ads API. Those who want can continue using the existing CPC definition until October 7, 2015. After this date, only the updated CPC will be available. 

Tags digital advertising Social Media Marketing

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