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Facebook changes the way it charges brands for ads

In a significant move for brands and advertisers, Facebook has changed the way it measures cost per click (CPC). Now the definition of CPC only includes clicks to websites and apps, and not likes, shares and comments.

This move by Facebook will bring marketers on the platform more than just social currency now. In an official statement Facebook says, “Advertisers come to Facebook to drive business goals, like in-store traffic and website clicks, and they need to know how effective their ads are at driving their stated goal. This update is intended to help advertisers better understand how their ads perform against their objective.”

Until now CPC would take into account any click taken within an ad unit – such as a like, a share, a click to website or ‘Continue reading’ button. With the new update it will only account for ‘link clicks’ such as clicks to visit another website, Call-to-action clicks that go to another website (i.e., “Shop Now”), clicks to install an app, clicks to Facebook canvas apps and clicks to view a video on another website.

As this change goes into effect, marketers who optimise for link clicks are likely to see better return on advertising spend, since they’ll be paying for only the most valuable outcome. Facebook said, “Separating link clicks from engagement clicks (including likes and comments) means your budget will be spent more efficiently no matter if you bid for clicks or engagement.”

As a result of this change, some campaign reporting metrics related to clicks will look different. “By excluding likes, shares and comments, CPC will increase but will also become more valuable as it counts only the clicks you want. Similarly, it may look like your click-through rate (CTR) has decreased; again, this is because the CTR will no longer factor in the additional clicks,” said Facebook in an official statement.

Shubhi Tandon

Shubhi Tandon is the Assistant Editor at Digital Market Asia. Fascinated by the evolving digital media industry, she has focussed on tracking developments in the Asia Pacific market since 2014.