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Grow Your Business Social Media

Facebook Is Changing How It Charges for Ads

Facebook Is Changing How It Charges for Ads
Credit: Facebook

Facebook Ads are about to become even better for small business. The company announced that it is changing how it charges advertisers, which could improve social marketing campaigns by increasing the value of their marketing spend.

The change consists of redefining how cost per click (CPC) is measured to better serve businesses. Now, CPC will only include clicks to websites and apps, not likes, shares and comments. The move aims to help advertisers reach their marketing goals and use their funds in a more cost-effective way toward them.

"This update is intended to help advertisers better understand how their ads perform against their objective," the company wrote on its Facebook for Business blog. "It's designed to provide measurement that's more closely aligned with how advertisers are bidding so they can better optimize their campaigns against their stated goals." [Facebook for Business: Everything You Need to Know]

How Facebook Ads is changing

Facebook Ads' current CPC model charges advertisers for any clicks users make on ad units. This means businesses are paying for clicks that don't necessarily directly benefit their campaigns, such as likes, comments, likes, shares and other engagement clicks.

To better serve advertisers, Facebook Ads may increase CPC and the model will be updated to only measure "link clicks," defined as clicks that work toward reaching ad objectives and business goals.

Soon, businesses will only have to pay for clicks that lead to their website, as well as videos and call-to-action links (e.g., "Shop Now" buttons) that leave the Facebook platform. CPC will also include clicks to install an app and clicks to Facebook canvas apps (apps that run inside Facebook, such as games).

How the change benefits small business

Although businesses may see an increase in their CPC, Facebook says it will actually result in a better marketing ROI because they are paying for only the most valuable clicks.

"Once this change goes into effect, advertisers who care about link clicks are likely to see better returns on advertising spend, since they'll be paying for only the most valuable outcome," the company wrote. "Separating link clicks from engagement clicks means your budget will be spent more efficiently no matter if you bid for clicks or engagement."

Businesses can still bid on engagement clicks, however — it will just look differently in reports as they will no longer be under the CPC metric.

Facebook has yet to announce when the changes will take place, though the company says it will be automatically updated in advertisers' Ads Manager and Power Editor.

Sara Angeles

Sara is a tech writer with a background in business and marketing. After graduating from UC Irvine, she worked as a copywriter and blogger for nonprofit organizations, tech labs and lifestyle companies. She started freelancing in 2009 and joined Business News Daily in 2013. Follow Sara Angeles on Twitter @sara_angeles.

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