What is Facebook CPM & CPC? Which option to optimize advertising effectiveness?

When starting with online advertising in general or Facebook ads in particular, the first question that appears in the advertisers' mind is often “Should I bid based on CPC or CPM advertising? "Most people usually choose CPC advertising by default, which is CPM. So what is Facebook CPM and CPC and what is the appropriate form of advertising to optimize the effectiveness of Facebook advertising for you?

How do Facebook ads work? 

Before you learn about the difference between the two types of Facebook Ads "What is Facebook CPM and CPC?", You need to have an overview of how Facebook ads work. Facebook's advertising network always acts as a blind auction and advertisers bid to have their ads displayed for different audience segments. After all, Facebook will show you the best performing ads (or create the highest CPM for Facebook). 

Initial inspection 

Once Facebook knows the ad account that has run beyond the first few thousand impressions continues to run, Facebook will check all new ads to determine their effectiveness. During this period, the future of your advertising will be determined. Facebook's goal is to run ads that will generate them the most revenue by running ads that maximize their CPM. Whether you bid on a CPC or CPM basis, Facebook will have to run your ads to determine their performance.

If your ad reaches 10,000 impressions and there are no clicks but you bid on a CPC basis, Facebook will automatically push your ad out of the rotation. This is because you do not generate any revenue for them. However, if you bid on a CPM basis, Facebook will ensure that your impressions will at least generate a revenue for them and your ads will continue to be prioritized

What are CPM & CPC on Facebook ads? How to optimize advertising effectively?

Optimization is the process by which an advertiser minimizes advertising costs and maximizes performance to achieve the goals of the advertising campaign. If you do not have time to invest in optimization, you will have to spend more on your individual ads. 

For advertisers who are investing in long-term campaign execution, optimization is a process that is not only smart but it will decide to maximize your performance and reduce costs. In order to optimize ad performance and cost, advertisers need to choose the right advertising format for their campaign.

Facebook Ads CPC

CPC (Cost per Click) is a form of paid advertising that is paid based on the number of clicks / clicks on the ad. For example, when Facebook users click on your ad, you will lose money for each click. Good CPC for Lead Generation (search and lure users).

The most obvious reason for you to choose CPC advertising is that you are only charged when people click on your ad. This means you can get thousands of "free impressions". For advertisers, you want to pay for ads that generate results. However, if you have a low budget ($ 5 a day or even $ 20) and you don't have time to optimize then the optimal option for you is the CPC advertising form.

Advantages & Disadvantages

• Advantages: The biggest advantage of CPC is that you will optimize your advertising budget. Specifically, in the case of ads showing to those users who have no demand for products or services, they do not click on the ads, your business will not take any fee at all.

• Cons: The cost of advertising in the form of CPC advertising is slightly better than CPM, businesses can only optimize the ad template but can not determine the number of clicks or clicks generating profit. Useful in a specific time.

Facebook Ads CPM

CPM (Cost Per Mile) is a form of payment based on the number of ad impressions, regardless of whether the user interacted or not. For example, for every 1000 ad impressions the business loses the sum for that 1,000 impressions.

The choice of this form of advertising is quite expensive and difficult to measure the final economic efficiency for the business. In other words, I might bid $ 1.00 for 1,000 impressions but if my clickthrough rate is exceptionally high, my ad will probably get a CPM of $ 0.10 although I bid $ 1.00. In return, my ad will outperform Facebook's estimated bid.

Advantages & Disadvantages

• Advantages: This type of advertising is best suited to businesses that are in need of brand development rather than sales. CPM advertising also helps ensure that your ad will reach the maximum users in the target audience on a continuous basis. This makes the product or message or brand of the business will easily be more people. Advertising costs for this method is not required to be too high. 

• Disadvantages: The downside to this cost-per-impression method is that it's hard for businesses to target ads to the right kind of potential customers. In the case of your business ads are served to content sites with low user access, the opportunity to reach users of ads will be significantly reduced.