Friday, May 21, 2010

Facebook Ads - CPC vs CPM

As some of you know, I do a bit of freelance web design for small businesses. One of the hosts I have been using lately (I do like them!) is SuperGreenHosting.com. With your package, you get ad credits on Google, Facebook, Yahoo and MySpace. I decided to run a test using my Facebook ad credits. I will detail it here.

After going through the options of putting in your link and text of the ad (I didn't include an image), you can select whether to pay per click or pay per impression. In my particular case, my target market based on age, demographics and interests was an estimated reach of 633,000+. The suggested bid price for each click was between $0.81 and $1.20 each. I entered a max bid of $1. I set the ad to run on Monday 5/24 from 5am - 10pm.

I then created the same ad again, but selected the pay per impression model. The cost-per-thousand views (CPM) maximum I bid was $0.50. The suggested bid range was $0.36 - $0.52. This ad I scheduled to run on Tuesday the 25th at the same time period.

In both ads, I set my max spend for the day at $10. I know there are flaws in my test, but for a "free" test, I am ok with it.

My main question that I am trying to answer is, is my CPC going to be higher if use the CPC model, or will the CPM model's conversion rate be high enough to make it a more cost effective method?

Stay tuned for results posted next week!

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