Facebook CPM Advertisers Will Soon Receive Less Clicks

Since early on Facebook has provided performance advertisers with two options: cost per thousand impressions (CPM) or cost per click (CPC) advertising campaigns. While those two options will continue to be available, Facebook is making a significant change: reducing the number of clicks received by CPM advertisers. In other words they will decrease the priority of CPM campaigns over CPC campaigns.

Here is the letter that Facebook sent out to CPM advertisers earlier today:

Upcoming system change:
As you know, we continuously work to make our ads system more accurate in order to further improve the effectiveness of your advertising campaigns. Among other ongoing improvements, we are refining our ads delivery system to better reflect the goals of our advertisers. This change will take place over the next few weeks and, assuming current bids remain unchanged, will mean that:

CPC advertisers (advertisers who have chosen to bid “cost-per-click”) may receive more clicks.

CPM advertisers (advertisers who have chosen to bid “cost per thousand impressions”) will continue to receive impressions but may receive less clicks.

Do I need to do anything?
As a CPM advertiser, you are indicating to our system that it’s more important that your ad is seen by your audience rather than clicked i.e. you have chosen to pay for impressions, not clicks. If your main objective is to increase awareness of your business with an ad impression, there is no need for action. However, if your most important objective is to drive clicks on your ads, you should change your bids from CPM to CPC.

As one advertiser told us, “This is a HUGE deal since I am getting CPM clicks for about $0.40 by writing good ads, and CPC costs me almost double.” For those performance advertisers who spent a substantial amount of time optimizing their ads for maximum click through, Facebook is about to make a change that will dramatically affect their campaigns. While it will most likely boost Facebook’s revenue, it will also force many performance advertisers to change their entire strategies.

Are you a performance advertiser? How will you be affected by this change?

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1403621 Comments2010-04-30+19%3A10%3A57Nick+O%27Neill »

Nick, it says you don't need to change anything if you're only interested in exposure, so maybe they're doing something more drastic? Like segregating CPC and CPM ads in different places…

Comment by Derek pangallo — April 30, 2010 @ 11:19 am
Nick, it says you don’t need to change anything if you’re only interested in exposure, so maybe they’re doing something more drastic? Like segregating CPC and CPM ads in different places…

Comment by Derek Pangallo — April 30, 2010 @ 11:20 am
40 cents per click!? I won't settle for any ad that lands me clicks for more than 10 cents and even that is pushing it.

Comment by Mark — April 30, 2010 @ 5:50 pm
Rats, they finally fixed it. Smart Facebook advertisers have always stayed away from CPC because CPM was so much cheaper (if you know what you're doing). Disappointed that I will no longer be able to take advantage of this strategy.

Comment by Sean Weigold Fergus — May 1, 2010 @ 1:15 pm
We spend in our Agency over 3000$ per month for different clients from different industries. We set a rule after optimizing FB ads that we will never set CPC ads and only use CPM. After receiving yesterday msg we wonder what going to be next? Does FB willing to just add revenue or as Derek said we are going to have a much more drastic swift for CPM advertisers to draw more attention in alternative way

Comment by Kobi Gamliel — May 1, 2010 @ 3:58 pm
Sorry to be the grammar police, Nick, but it should read "fewer clicks", not "less clicks". In fairness to you, Facebook's blog entry is grammatically incorrect as well.

Comment by Dave Kerpen — May 1, 2010 @ 5:28 pm
Does anyone have any idea when this is going to phased in?

Personnally I think Facebook are missing the point with this. For my business the reason I use CPM instead of CPC is because I can cut down the amount of people I'm advertising to using the demographic options thus getting more value out of my impressions.

If you can't do this what's the point in using all the demographic stuff which is the key advantage that Facebook offers over other advertining mediums? I know they'll say this is included in the CPC price but it certainly isn't at the moment. 30/40p per click is just too expensive for me, I start looking at my ads seriously when they are costing more than 10p per click.

Comment by UTR — May 3, 2010 @ 8:28 am
I think they may already be doing something. My CPM clicks are costing about double today what they usually do. I am getting the same amount of impressions, but CTR is half of what it usually is. How could they possibly manipulate the ads to cause this? Maybe just a weird Monday. The suggested CPC to the real estate agents I target is $.85 – $1.10. There is no way I can afford that! That's double+ what CPM is costing. ROI goes to ZERO at that cost unless conversions were to go way up, and don't know how that could possibly happen. We have spent a ton of $ advertising the last year, and feel like fb is turning their back on us with this change…

Comment by Brad — May 3, 2010 @ 1:57 pm
As Dave Kerpen said: Fewer clicks. It's a small thing but it matters.

Comment by Eric Bourland — May 3, 2010 @ 10:44 pm
@Brad – have been seeing some examples of similar behaviour ourselves, though I can't be sure what has been behind it as I am looking at different campaigns for different products / brands / target groups.

What I suspect this will do is relegate CPM advertising to the lowest position on the page – the one that often doesn't appear in full on page load, and that we know gets a much lower CTR than the other ad positions.

Have to say, this goes some way to killing the ad platform. I think they have been listening too much to their intake of Google Execs, and decided to push advertisers to compete on a CPC-basis.

To do that is to miss the point entirely on two fronts: not only does it entirely remove the benefit of the targeting available, but it also *completely* fails to acknowledge that Facebook is not the same as paid-for Search. (it always amused me that many of the recent senior recruits were effectively from an entirely unrelated industry)

The impacts of this are going to be profound if they implement it. Advertisers will push CPC advertising to get a more definite and predictable response, allowing them to spend less time on increasing ad quality. User experience will plummet as an ever greater proportion of ads appear saying "YOU HAVE WON: CLICK HERE", or at least less-exaggerated variations on that theme.

Comment by Richard Ireland — May 4, 2010 @ 12:08 am
I like how they don't go into specifics on the mechanism that is responsible for the change. It's almost as if they're simply penalizing CPM ads so that they get more CPC ad buyers.

All the more reason to develop your own social media sites instead of relying on the good graces of Facebook.

Comment by Creative Combat — May 4, 2010 @ 2:40 pm
Clicks are now costing more than double vs CPM before the change. This will force us to stop advertising on fb. Everyone loses. We paid fb $50K (yes, that's $50,000) in the last year for successful CPM ads, but at the new higher cost we have no profit. It's sad because fb was helping many small American companies like ours make ends meet during tough times, but once again greed could put an end to that (sound familiar?). Good luck to all my fellow (ex)CPM advertisers and I look forward to hearing your experiences after the change. I hope I am just missing something with the new ad system, but so far it doesn't look good.

Comment by Brad — May 6, 2010 @ 1:11 pm
I can understand peoples frustrations with the de-emphasize of CPM versus CPC. However, this seems like a play by them to focus more on big businesses with large budgets – I can't say I blame them.

Being part of a big business with a large budget I am actually happy to see this change…what I really want to see them do is increase targeting.

Comment by Kieran — May 8, 2010 @ 3:04 am
Thanks for the information. I think this is helpful. Im currently using CPM. =)

Comment by Hpnotik Qrew — June 26, 2010 @ 8:50 pm
I am just starting facebook ads and I am doing CPM ads as a test. The target group I want will cost me 1.50 for a click and I'm selling a book. VS. .32 for 1,000 impressions. Never done CPM ads before but I'm hoping that they will perform because paying 1.50 for a lead with no guarantee of a sale is suicide.

Comment by Jacob — August 18, 2010 @ 4:36 pm
I don't really understand this. If the CPM will still be shown and it will still appear in the same place on average, how is Facebook going to stop anyone clicking through?

Comment by Law firm marketing — August 19, 2010 @ 1:23 am
muy interesante…

Que conviene mas a un grupo de facebook! CPM O CPC?

Gracias.

Comment by wilson suarez — September 10, 2010 @ 3:06 pm
Ive just started my 1st ever Facebook campaign with CPM. I think Ive set the ad to 32 Pence (uk) to 1000 CPM impressions. Ive never understood CPM, does it mean the ad comes up 1000 times on a profile?

Just thought I'd ask…..

Comment by Peter Davies — April 15, 2011 @ 10:04 am
BS, CPM still rules!

Comment by HipHoper — May 3, 2011 @ 7:12 am
Hmm… old article, but I'm new to advertising and have been looking at both CPC and CPM. I started with CPC on Facebook, but it was like my budget was being maxed out with clicks within the same hours that I'd send an ad. Now this was either due to click fraud, or my ads are pretty good. Either way, at this rate it is simply cheaper to use CPM. If I get less clicks, well, I'm just gonna have to take the chance and see how it works out. Still, I don't have a lot of money and it sucks when you're budget is maxed out in less than 4 hours. That's expensive… they click, click, click, I get no sales and then my ad is gone!

Comment by Jamie — October 5, 2011 @ 12:22 pm
excellent knowledge, awesome knowledge in my position..
pertaining to for the whole family could take this forum.

Comment by gadget | technology — November 16, 2011 @ 8:42 am

RSS feed for comments on this post. TrackBack URL

Nick, it says you don't need to change anything if you're only interested in exposure, so maybe they're doing something more drastic? Like segregating CPC and CPM ads in different places…

Comment by Derek pangallo — April 30, 2010 @ 11:19 am

Nick, it says you don’t need to change anything if you’re only interested in exposure, so maybe they’re doing something more drastic? Like segregating CPC and CPM ads in different places…

Comment by Derek Pangallo — April 30, 2010 @ 11:20 am

40 cents per click!? I won't settle for any ad that lands me clicks for more than 10 cents and even that is pushing it.

Comment by Mark — April 30, 2010 @ 5:50 pm

Rats, they finally fixed it. Smart Facebook advertisers have always stayed away from CPC because CPM was so much cheaper (if you know what you're doing). Disappointed that I will no longer be able to take advantage of this strategy.

Comment by Sean Weigold Fergus — May 1, 2010 @ 1:15 pm

We spend in our Agency over 3000$ per month for different clients from different industries. We set a rule after optimizing FB ads that we will never set CPC ads and only use CPM. After receiving yesterday msg we wonder what going to be next? Does FB willing to just add revenue or as Derek said we are going to have a much more drastic swift for CPM advertisers to draw more attention in alternative way

Comment by Kobi Gamliel — May 1, 2010 @ 3:58 pm

Sorry to be the grammar police, Nick, but it should read "fewer clicks", not "less clicks". In fairness to you, Facebook's blog entry is grammatically incorrect as well.

Comment by Dave Kerpen — May 1, 2010 @ 5:28 pm

Does anyone have any idea when this is going to phased in?

Personnally I think Facebook are missing the point with this. For my business the reason I use CPM instead of CPC is because I can cut down the amount of people I'm advertising to using the demographic options thus getting more value out of my impressions.

If you can't do this what's the point in using all the demographic stuff which is the key advantage that Facebook offers over other advertining mediums? I know they'll say this is included in the CPC price but it certainly isn't at the moment. 30/40p per click is just too expensive for me, I start looking at my ads seriously when they are costing more than 10p per click.

Comment by UTR — May 3, 2010 @ 8:28 am

I think they may already be doing something. My CPM clicks are costing about double today what they usually do. I am getting the same amount of impressions, but CTR is half of what it usually is. How could they possibly manipulate the ads to cause this? Maybe just a weird Monday. The suggested CPC to the real estate agents I target is $.85 – $1.10. There is no way I can afford that! That's double+ what CPM is costing. ROI goes to ZERO at that cost unless conversions were to go way up, and don't know how that could possibly happen. We have spent a ton of $ advertising the last year, and feel like fb is turning their back on us with this change…

Comment by Brad — May 3, 2010 @ 1:57 pm

As Dave Kerpen said: Fewer clicks. It's a small thing but it matters.

Comment by Eric Bourland — May 3, 2010 @ 10:44 pm

@Brad – have been seeing some examples of similar behaviour ourselves, though I can't be sure what has been behind it as I am looking at different campaigns for different products / brands / target groups.

What I suspect this will do is relegate CPM advertising to the lowest position on the page – the one that often doesn't appear in full on page load, and that we know gets a much lower CTR than the other ad positions.

Have to say, this goes some way to killing the ad platform. I think they have been listening too much to their intake of Google Execs, and decided to push advertisers to compete on a CPC-basis.

To do that is to miss the point entirely on two fronts: not only does it entirely remove the benefit of the targeting available, but it also *completely* fails to acknowledge that Facebook is not the same as paid-for Search. (it always amused me that many of the recent senior recruits were effectively from an entirely unrelated industry)

The impacts of this are going to be profound if they implement it. Advertisers will push CPC advertising to get a more definite and predictable response, allowing them to spend less time on increasing ad quality. User experience will plummet as an ever greater proportion of ads appear saying "YOU HAVE WON: CLICK HERE", or at least less-exaggerated variations on that theme.

Comment by Richard Ireland — May 4, 2010 @ 12:08 am

I like how they don't go into specifics on the mechanism that is responsible for the change. It's almost as if they're simply penalizing CPM ads so that they get more CPC ad buyers.

All the more reason to develop your own social media sites instead of relying on the good graces of Facebook.

Comment by Creative Combat — May 4, 2010 @ 2:40 pm

Clicks are now costing more than double vs CPM before the change. This will force us to stop advertising on fb. Everyone loses. We paid fb $50K (yes, that's $50,000) in the last year for successful CPM ads, but at the new higher cost we have no profit. It's sad because fb was helping many small American companies like ours make ends meet during tough times, but once again greed could put an end to that (sound familiar?). Good luck to all my fellow (ex)CPM advertisers and I look forward to hearing your experiences after the change. I hope I am just missing something with the new ad system, but so far it doesn't look good.

Comment by Brad — May 6, 2010 @ 1:11 pm

I can understand peoples frustrations with the de-emphasize of CPM versus CPC. However, this seems like a play by them to focus more on big businesses with large budgets – I can't say I blame them.

Being part of a big business with a large budget I am actually happy to see this change…what I really want to see them do is increase targeting.

Comment by Kieran — May 8, 2010 @ 3:04 am

Thanks for the information. I think this is helpful. Im currently using CPM. =)

Comment by Hpnotik Qrew — June 26, 2010 @ 8:50 pm

I am just starting facebook ads and I am doing CPM ads as a test. The target group I want will cost me 1.50 for a click and I'm selling a book. VS. .32 for 1,000 impressions. Never done CPM ads before but I'm hoping that they will perform because paying 1.50 for a lead with no guarantee of a sale is suicide.

Comment by Jacob — August 18, 2010 @ 4:36 pm

I don't really understand this. If the CPM will still be shown and it will still appear in the same place on average, how is Facebook going to stop anyone clicking through?

Comment by Law firm marketing — August 19, 2010 @ 1:23 am

muy interesante…

Que conviene mas a un grupo de facebook! CPM O CPC?

Gracias.

Comment by wilson suarez — September 10, 2010 @ 3:06 pm

Ive just started my 1st ever Facebook campaign with CPM. I think Ive set the ad to 32 Pence (uk) to 1000 CPM impressions. Ive never understood CPM, does it mean the ad comes up 1000 times on a profile?

Just thought I'd ask…..

Comment by Peter Davies — April 15, 2011 @ 10:04 am

BS, CPM still rules!

Comment by HipHoper — May 3, 2011 @ 7:12 am

Hmm… old article, but I'm new to advertising and have been looking at both CPC and CPM. I started with CPC on Facebook, but it was like my budget was being maxed out with clicks within the same hours that I'd send an ad. Now this was either due to click fraud, or my ads are pretty good. Either way, at this rate it is simply cheaper to use CPM. If I get less clicks, well, I'm just gonna have to take the chance and see how it works out. Still, I don't have a lot of money and it sucks when you're budget is maxed out in less than 4 hours. That's expensive… they click, click, click, I get no sales and then my ad is gone!

Comment by Jamie — October 5, 2011 @ 12:22 pm

excellent knowledge, awesome knowledge in my position..
pertaining to for the whole family could take this forum.

Comment by gadget | technology — November 16, 2011 @ 8:42 am

Facebook CPM Advertisers Will Soon Receive Less Clicks

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