Facebook CPM, Facebook PPC, where?
TechnologyThe lifeblood of any business, whether online or offline, is traffic. No matter how good your product is, if no one knows it exists, you won’t make any money. In this report, I will show you how to make profitable Facebook PPC vs. CPM Facebook Ads.
If you are coming to do online business recently or you are new to Facebook Ads i.e. you are a newbie to Facebook Ads, you may be going the wrong way of excessive concentration on FB PPC only.
PPC stands for cost per click, meaning you only pay for the number of clicks you get on your FB ads. The good side of this is that you will not waste your budget on zero clicks like other forms of FB ads. You need to know how to increase your FB PPC bids high enough to start breaking even early on, even if it’s not immediately profitable.
On the other hand, CPM is the cost per mile. This simply means that you pay a lot for a thousand impressions. What do I mean by print? It means the number of hits your FB ads get. For example, if you display a banner on Facebook, the number of times people see the banner. So if you offer $5 per thousand, you’ll pay $5 per 1,000 views of your ads. The advantage of CPM over PPC is that you can pay only a fraction of what it costs you to get a click on the latter. With a very good click-through rate, you will easily earn profit. Facebook will easily send you traffic regardless of your click-through rates because they are sure of revenue whether you get clicks or not.
What I have discovered in my decades of working as an online affiliate is that many newbies are scared to death when it comes to CPM bidding. Many prefer PPC to CPM because the former puts them at the helm while the latter puts you in the passenger seat.
But the reality of the fact is that it will be very difficult to do it as a Facebook affiliate sticking only to the PPC model. With every campaign you run, your goal should be to maximize CTR and minimize Facebook’s propensity to ridiculously inflate the price of a click. That means working on CPM and placing your ads in such a way that people are motivated to click, not the other way around.
In this report, I’m not trying to dismiss PPC bidding strategies entirely. There are times when you may find them indispensable. However, I am going to emphasize and teach an understanding of how both strategies will work to bring you profitable campaigns on Facebook.
How to bid with PPC
In the very recent past, it was possible for an affiliate to bid on PPC and get tons of cheap clicks to their offer, that is, as cheap as a penny or two per click. Because the traffic converted and Facebook is one of the largest social media platforms in the world, many affiliates became very rich. Consequently, the influx of sellers increased completion and subsequently the cost increased. The game is not over, but now it is more difficult.
It is still possible to get cheap clicks in some niches and demographics. But if you’re looking for the most popular markets and demographics in the United States, prepare to face some very tough competition. The cheap hundred clicks of the past are no longer available. Don’t get me wrong, PPC bidding is still very relevant and important.
Tests calculated with PPC
If I want to launch a new campaign on Facebook and assuming I’m green about the conversion of the new launch, it’s rational to set the CTR in such a way that it at least breaks even. The math is very simple, if the click-through rate is one in twenty, then and my bid payout is $10, then the maximum bid per click that will break me is $0.05
It’s reasonable to run these initial PPC tests to measure the conversion rate of any selected demographic on Facebook. Looking for PPC is not a fair enough indicator. The variation in conversion rates can be substantial depending on the traffic source; especially if you are linking directly.
With an EPC of $0.50 and my personal preference being at least 100% ROI, my maximum cost per click will be $0.25. That becomes my benchmark for a successful CPM campaign. If I can move to CPM and bid $0.25, I know I need to produce a CTR of 0.1 to get my ROI of 100%.
There is uncertainty with the results of PPC
The test analytics I highlighted above will not work if the CTR is too low. Facebook is in business to make money and will show ads to the customer who will deposit money into their bank account. If they serve a PPC customer with 5,000 impressions without a click, Facebook will earn $.0. If they serve the same 5,000 clicks to a CPM client who offers a CPM of $15, Facebook will deposit $75. It is reasonable that Facebook would prefer to serve the CPM client with traffic instead of PPC.
Therefore, your CTR is very important. Using PPC bidding to determine your margin is a good idea, but you need to deliver good creative that gives you good CTR; otherwise it will continue to send ads which will take almost a week to get approved and will run for a few minutes and stop getting any traffic.
So what’s the way out of this PPC mess? The easiest way to overcome this challenge is to perform a proper split test. Submit at least 12 ad variations and make each one significantly different. This will attract a substantial number of Facebook impressions and clicks to sufficiently determine the test data. No matter how bad you are at managing your creativity, the law of numbers will work in your favor.
Why Are Affiliates Scared About CPM?
From the above analysis, it is obvious that an unsuccessful PPC will waste time and effort and can ultimately lead to frustration. But no money will be lost. But an ineffective CPM will not only waste time and effort, but also drain your budget.
Facebook is probably the friendliest environment to test CPM. Just like I said earlier, Facebook gives you good traffic, even with low click-through rates, since you’re putting money into your bank accounts. It is a self-service advertising system, you can turn your ad campaigns on and off at will. So you can easily stop campaigns that are leaking your budget without favorable returns. Take note of this before you break your PPC patterns.
Do you want to work with good advertisers? CPM bidding is the way to go.
Marketers who are unsuccessful in CPM bidding are victims of their own laziness and unprofessional work. The days of cheap clicks are gone forever, but CPM allows you to substantially reduce your click costs. Keep in mind that if you get addicted to PPC bidding, you’ll always be limited by the synthetic ceiling of what Facebook decides to charge for that click.
Taking the direction of CPM, you will somehow cope with Facebook load variations. However, a good CTR will definitely determine the result of your campaigns. It’s possible to ditch Facebook’s one-click valuation and get cheap traffic by placing only laser-targeted ads in your campaigns. Make a difference as a good affiliate and you will be rewarded and make a profit.
Bidding CPM is the best way to get close to reproducing the cheap traffic that existed a few years ago with Facebook ads. Target your markets like a guru and rest assured, there is still good money to be made with Facebook CPM Ads.
So what is the biggest problem with CPM bidding?
Facebook is very hostile when you want to implement day trading in your CPM campaigns. To be successful, you need to be able to show your ads during a certain period of the day and turn them off in some unproductive periods.
However, you will need to make use of some tools and scripts to troubleshoot and do manual day-splitting, and if you’re going to run profitable Facebook ads, day-splitting is absolutely critical to any CPM campaign.
It goes without saying here that some offers not only attract more clicks in a specific period of the day, but also cover that period better. If you are running PPC campaigns, this may not be a necessary factor to consider. However, with CPM campaigns, if you run your campaigns and click on the selection periods, you will hurt your budget. If you’re running PPC, at least you have the safety net of paying only for clicks. If you don’t have access to the tools and scripts, you’ll need to manually pause your campaigns during dull periods.
If you want to optimize and groom your traffic, then CPM with daily sharing is the right way to go.