PPC Vs. CPM on Facebook
Facebook advertisers can choose whether to bid on ads based on the number of clicks their ads receive or the number of times an ad is shown. Facebook calls the former bidding method "cost per click" or CPC, rather than "pay per click" or PPC as it is sometimes known. The latter bidding method is called "cost per thousand impressions" or CPM. Advertisers choose one of these two methods based on their campaign goals.
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Definition of Click
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Facebook defines an ad click as an instance of a user clicking the ad image or text and arriving at the destination Web address. If the ad features an option for the user to instantly "Like" a Facebook page designated by the advertiser, the Like counts as a click.
Definition of Impression
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An ad impression on Facebook occurs when an ad loads in an Internet browser. If the browser is reloaded or if the user navigates away from the page after a short period of time, an impression is not registered and the advertiser is not charged.
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Benefit of CPC
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Generally, Facebook advertisers who choose to bid on ads based on CPC are interested in converting individual clicks into individual website sales, Facebook page Likes or Facebook event RSVPs. Even if an ad is shown a million times, the advertiser is only charged when a user clicks it.
Benefit of CPM
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Most Facebook advertisers who choose CPM bidding are interested in brand awareness and positioning. Although CPM ads are clickable and can lead to conversions, CPM advertisers generally consider an ad impression to be an end unto itself. A CPM ad is charged per thousand impressions even if it garners not one single click.
Click-Through Rate
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The click-through rate or CTR of a Facebook ad is the number of clicks an ad received divided by the number of times it was shown. This ratio is listed in the advertising report during a campaign and after it has ended. The CTR helps advertisers determine whether to continue using CPC or CPM in future Facebook ad campaigns.
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References
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