div#mobile-menu { background-color: #004493 !important; }

Facebook Drops CPC Algorithm to Focus on Performance Outcomes

By August 5, 2015Big News, Blog

Facebook recently had a change of heart regarding Likes, the once sought after measurement of popularity is being replaced by putting business performance objectives first. The new system will no longer take into account engagement actions such as comments, shares and likes and instead will focus on what it calls “link clicks”.

What exactly is a Link-Click?

Facebook considers the following Link-clicks and is what advertisers should consider as part of their bidding strategy.

  • Clicks to install and app
  • Clicks to visit another website
  • Clicks to Facebook canvas apps
  • Call-to-action button clicks that go to another website
  • Clicks to view a video or another website such as Vimeo

This does not take away the ability for marketers to bid for engagement clicks, those actions will just not be tracked by the new CPC calculation.

Better Performance?

The changes make sense, head of ads product marketing Richard Sim confirmed on the phone that taking engagement actions out of the equation makes it easier to evaluate performance-driven campaigns and set bids based on those desired outcomes.

“The new CPC will enable advertisers to be more specific about the types of ads they use and pay only for clicks that lead to their website if that’s the marketing objective they have in mind,” said Sim.

“If you think back, a lot of advertisers thought of Facebook only as a social platform and were strictly engagement focused. Over the past few years we’ve really been focused on driving business results. The transition to clicks being only link clicks is a big step in this transition.”

Targeting and Optimisation

Options for creating an ad will be displayed once an advertiser chooses a campaign objective.

“There is a lot of stuff on the back end that’s much more simple when we understand the objective,” explained Sim. “People that engage with an ad versus click on it are often very different.” Engagements are public actions that show others what you care about. Clicks, however, are private. Nobody knows whether you clicked on an article or an ad on Facebook.

Facebook’s ad engine assesses each impression and determines the likely hood of a click or engagement, to determine which ad should be served and at what CPC.

Roll Out

Developers will have the usual 90 days to make adjustment and build for the new API.

The update to the interfaces — Power Editor and Ads Manager — is probably about a month away, said Sim. Messaging will be added to the interfaces about the change when it goes live. Sim also added that the SMB team will be doing outreach to help advertisers adjust reporting and expectations after the update.

The cut-off for using the old API and CPC definition will be October 7.

Leave a Reply