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CPC, oCPM or CPA - in Facebook advertising which is best?

Written by
31 Aug, 2018

The Facebook auction can be complicated. A big part of winning in the auction is getting your bid right. And to do that you'll need to select the right bid type, to ensure your ads are optimized for the action you're trying to drive.

When talking bid types, three terms usually rise to the surface: 

  • CPCCost-per-Click (CPC) - you bid how much you’re willing to pay for a click, and you’re charged on a per-click basis.
  • Optimized Cost-per-Mille (oCPM) - you pay per 1000 impressions but, on top of that, you are able to define which action in the conversion funnel you’d like Facebook’s algorithm to optimize for.
  • Cost-per-Action (CPA) - you are able to cap a price on the desired action, for example video views (CPV), leads (CPL), installs (CPI).

So which is better?

While it’s probably not the answer you want to this question, Facebook regularly states that each advertiser is different and should test which bidding type is best for reaching their own objectives.

CPAWith conversions in mind, you need to ask yourself what you want your target audience to do. 

You may have heard through the grapevine that oCPM guarantees better delivery, or that CPC and CPA are better for keeping your costs under control. But that is not always the case. Trying to 'hack' the system with one bid type over another based on something other than the action your trying to drive, could get you into trouble budget-wise. 

Some general rules

Delivery and performance

The two main discussion points when deciding between bid types are usually delivery and performance. On the whole, oCPM provides the greatest flexibility and generally more assured delivery, whereas if you’re concerned with controlling your costs, CPC or CPA are probably the best choices.

The bottom of the funnel

The Marketing FunnelAt the bottom of the funnel, audience size will invariably decrease, compared to the top of the funnel. Realistically, not everyone who sees your ad will move on to the next step of the funnel - each person who represents an impression is not going to click, each clicker is not going to fill in the lead form, and so on… So, the bottom of the funnel is where your audience size is especially key - a very small audience will make it hard for the Facebook algorithm to deliver your ads, no matter the bid type you select. In general, we would recommend using oCPM at the bottom of the funnel and trusting the Facebook algorithm to do the hard work of optimizing for you.

A new Facebook Pixel

On the other hand, if you are launching a sales campaign for the first time with a brand new pixel, oCPM optimizing on purchase is more likely to stagnate your campaign, since the algorithm has no historic data to benchmark on. However, in this case you could use oCPM optimized on product views, for example, since you’re more likely to have more of this data for the algorithm to work with.

 

For more information on Facebook and Instagram ad bidding, download our ultimate guide! It provides you with a view into the Facebook auction, a look at what other factors (apart from bidding) play a role in getting your ads shown, detail on bid types and strategies and examples to help you go to the next level!

Facebook & Instagram Ad Bidding Click to download your guide

About Joe Sweeney Content Marketing Manager here at MakeMeReach, Joe is a words guy. Joe's a digital marketer who believes in the power of quality content to start great conversations between consumers and brands. He also hosts our weekly Facebook Live social media updates and our podcast!

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