Deciding Between CPM & CPC Bidding on Facebook

By Mike Matta | @MattaMike | Production Associate at Hanapin Marketing

In a previous blog post, fellow PPC Hero Kelsey gave everyone 3 Facebook Optimizations You Can Make Today. I wanted to expand upon her suggestion of testing out different bidding strategies and how I made a change from CPM to CPC bidding in one of my Facebook accounts. If you’re managing a Facebook account that gets very few leads or conversions over a month, this will be extra helpful to you.

 

Let’s start off with a simple overview of both CPC and CPM bidding.

 

CPC Bidding

 

If you’re running search ads, you’re more than familiar with CPC bidding. You get charged when someone clicks on your ad. At its most basic, you can get your ad in front of millions of people but only get charged when one clicks on your ad. You’ll want to be strategic with your targeting on Facebook though. If your relevance score drops too low, Facebook will be significantly less likely to show your ad since they’re not getting paid and you’re taking up space in one’s newsfeed that could be filled with another, more profitable ad.

 

The big problem rears its head if you want to optimize your ads for something like purchases or leads generated on your website. That’s when you’ll need to acclimate yourself with CPM bidding.

 

CPM Bidding

 

If you choose to optimize your campaigns for purchases or leads, you are defaulted into being charged by the impression. CPM bidding is all about getting your ad in front of people and trusting that Facebook is going to find the people most likely to convert. It’s generally recommended for creating brand awareness on search which flies a bit in the face of optimizing for conversions or leads.

 

Optimizing for Leads

 

While working on that lead gen account, it came time to do a periodic refresh of their Facebook ads. The big problem we were running into was that there were very few lead forms being filled out and to compound that, very few people clicking onto the website. Our client is also a relatively sensitive topic so people aren’t going to click on our ads if they’re not remotely interested in what they’re offering.

 

The ads were being exposed to a large group but rarely were users filling out contact forms or; at the very least, clicking to the website and entering into our remarketing campaigns. I hypothesized that Facebook was having trouble finding the right person to show these ads to with such a low volume of leads to optimize around. That led to the following test. With traffic and leads down, I figured it wouldn’t hurt to try a big overhaul and hope it didn’t crash and burn!

 

Indycar Crash at Fontana

 

The Test: Optimizing for Clicks

 

The decision was made to remake the campaigns while optimizing for link clicks rather than for leads on the site. I will preface, these weren’t exact copies but an evolution with the new bidding structure in place. My thinking was this would benefit the account in one or maybe a handful of different ways:

  1. If traffic remains the same, at the very least there would be some big cost savings involved by only paying for that small group of clicks.
  2. Since Facebook wants to get paid; hopefully, there would be a big increase in traffic from Facebook serving the ad to people who have an interest in what we’re offering. Getting people familiar with the brand and entering our remarketing funnels would be a nice benefit.
  3. If number 2 pans out, getting more people to the website would lead to a larger amount of people filling out lead forms. That is all if conversion rates remain the same with that new audience.

Any of those three would be a net benefit to the account so I went ahead and made the switch.

 

The Results

 

This was a very recent change so I will preface that there isn’t a lot of data to go off of. The date right before the change also includes the 4th of July but it didn’t drastically change the numbers much from previous weeks.

Before & after change in reach, clicks, spend, CPC and conversions

 

In the two weeks following the change, we’ve seen a massive increase in clicks and conversions went up 400% with that extra traffic. With budgets staying pretty similar, we’ve managed to reduce our CPA by just by funneling more people to the site and giving them the chance to convert. This may be a great option if you’re limited by spend on Facebook or you’re seeing a similar problem of paying a lot for impressions that don’t appear to be paying off.

 

I’ll be keeping a keen eye on this as more data accumulates. So far things are looking positive and I’ll be interested to see how things change as Facebook gets a better idea of who is most likely to click on our ads.

 

Final Thoughts

 

If your account is getting very low amounts of conversions in Facebook, it may be worth trying a different strategy to drive traffic and add users to your remarketing funnel. As with all things, test it for yourself and see if it works.

 

Along with Chadd’s 3 Quick Facebook Optimizations to Charge Up Your Performance and Kelsey’s article linked above, you’ll be on your way to creating a winning Facebook strategy.

 

Will Power Doing Donuts

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