Last week Facebook announced a significant change in how they charge for clicks on the Facebook ads platform.
Facebook will now separate engagement clicks (likes, comments, shares) from direct response clicks (clicks to website, CTA clicks, app install clicks).
The current pricing model takes all clicks on an ad into account. This means link clicks were mixed together with engagement clicks such as likes, comments, and shares.
Makes it a bit challenging to measure success of an ad and optimize, huh? The motivation for this change is reported to be advertiser driven. Marketers wanted an easier way to measure and evaluate performance based campaigns.
This much needed change will now align pricing with campaign objectives and business outcomes. For example, if you’re a retailer interested in driving qualified clicks to your website, you’ll no longer have to pay when someone likes or comments on your Facebook ad.
Brand and awareness marketers, rest assured. Engagement driven objectives will remain and you’ll still be able to bid and optimize for post engagement.
What Does All This Mean
- Average CPCs will rise. If your objective was link clicks and site visits, you were previously paying for actions you didn’t want, and a few you did. You’re no longer being charged for engagement clicks, just the link clicks. So you’ll likely see less clicks for a similar or higher cost.
- Improvement to ROAS and CPA metrics All things being equal, you’ll likely see an improvement in cost-per-acquisition (CPA) and return-on-ad-spend (ROAS) metrics over time. Since you’ll only pay for for the specific actions you desire, budgets can be spent more efficiently and optimization opportunities will become more clear.
- Increase in Direct Response ad spend on Facebook Facebook is already a direct response powerhouse. This pricing change will bring even more trust to Facebook and you’ll see direct response marketers start to push more ad dollars towards this channel. Customer acquisition is a constant pain point for retail and e-commerce marketers. The better value and consistency Facebook can offer advertisers, the more money businesses will pump through its ad platform.
When Do Pricing Changes Go into Effect
This depends on how you buy Facebook ads currently. If you’re buying through Ads Manager or Power Editor, the changes will roll out within the next month or so. If you’re working with a Facebook Marketing Partner you can talk to your rep about their anticipated roll out date. The cut off date to implement the new pricing change is October 7, 2015.