Facebook CPM, Facebook PPC, Which Way?
The life blood of any business either online or offline is traffic. No matter how good your product is, if nobody knows it exists, you will not make money. In this report, I am going to show you how to do a profitable Facebook PPC vis a vis Facebook CPM ads.
If you are coming to do onnline business newly or you are new to Facebook ads, that is you are a newbie to Facebook ads, you may go the wrong way of over concentration on FB PPC only.
PPC means cost per click, that is you are only paying for the number of clicks you receive to your FB ads. The good side of this is that you will not waste your budget on zero clicks as per other forms of FB ads. You must know how to raise your FB PPC bids high enough to start breaking even from the onset even if you are not profitable immediately.
On the other hand, CPM is cost-per-mille. This simply means that you paying so much for one thousand impressions. What do I mean by impression? It means the number of views your FB ads receives. For instance if you display a banner on Facebook, the number of times people see the banner. Thus if you bid $5 per mille, you will pay $5 for every 1000 display of your adverts. The advantage of CPM over PPC is that you may pay only a fraction of what it costs you to get a click under the latter. With a very good click through rate, you will easily run into a profit. Facebook will easily send you traffic irrespective of you click through rates because they are sure of revenue whether you are getting clicks or not.
What I have discovered in my decades of working as an affiliate online is that many newbie are scared to death when it comes to bidding CPM. Many prefer PPC to CPM because the former put them at the steering while the latter put you at the passenger’s seat.
But the reality of the fact is that it will be very difficult to make it as a Facebook affiliate sticking only to PPC model. Every campaign you raise, your goal must be to maximize the CTR and reduce maximally Facebook’s propensity to inflate the price of a click ridiculously. That means working on CPM and placing your ads in such a way that people will be motivated to click rather than the other way round.
In this report, I am not trying to write off PPC bidding strategies off completely. There are times you may find them indispensable. However, I am going to emphasize and teach the understanding of how both strategies will work to give you profitable Facebook campaigns.
How to Bid with PPC
In the very recent past, it was possible for an affiliate to bid PPC and get tons of cheap clicks to his offer, I mean as cheap as one or two cents per click. Because the traffic converted and Facebook is one of the largest global social media platform, many affiliates were made very rich. Consequently, the influx of marketers raised the completion and subsequently the cost has gone up. The game is not up, but tougher now.
It is still possible to get cheap clicks in some niche and demography. But if you are going for the most popular markets and the United States demography, be prepared to meet a very stiff competition. The cheap, cents clicks of the past are no longer available. Do not get me wrong, PPC bidding is still very relevant and important.
Calculated Testing with PPC
If I want to launch a new campaign in Facebook and assuming I am green about the conversion of the new launch, it is rational to set the CTR in such a way that at least, I will breakeven. The math is very simple, if out click through rate is one out of twenty, then and the payout of my offer is $10, then the maximum bid per click that will place me at breakeven will be $.05
It is reasonable to run these initial PPC tests to measure the conversion rate for any selected demographic on Facebook. Search PPC is not fair enough indicator. The variation in conversion rates may be substantial depending on traffic source; especially if you are direct linking.
With an EPC of $0.50, and my own personal preference being at least a 100% ROI, my maximum cost per click will be $0.25. That then becomes my benchmark for a successful CPM campaign. If I can move to CPM and bid $0.25, I know that I need to be producing a CTR of 0.1 to be getting my 100% ROI.
There is uncertainty with PPC Results
The test analysis I highlighted above will not work if CTR is too low. Facebook is in business to make money and will serve ads to the customer who will put money in their bank account. If they serve a PPC customer with 5000 impressions without a click, they will Facebook earns $.0. if they serve the same 5000 clicks to a CPM customer bidding a cpm at $15, Facebook will bank $75. It is reasonable that Facebook will rather serve CPM customer with traffic rather than PPC.
Hence, your CTR is very important. Using PPC bidding to determine your margin is a a good idea, but you must deliver good creative which will give you a good CTR otherwise, you will continue to submit ads which will take almost one week for approval and it will run for a few minutes and stop receiving traffic.
Then what is the way out of this PPC imbroglio. The simplest way to overcome this challenge is proper split testing. Submit at least 12 ads variations and make each significantly different. This will attract substantial amount of impressions and clicks from Facebook to sufficiently determine test data. No matter how bad you are in handling your creative, the law of numbers will work in your favour.
Why are Affiliates scared by CPM?
From above analysis, it is obvious that an unsuccessful PPC will waste time and efforts and ultimately may lead to frustration. But no money will be lost. But an ineffective CPM will not only waste time and efforts, it will drain one’s budget.
Facebook is probably the most friendly environment to test CPM. Just as I have said above, Facebook delivers you good traffic, even with poor click-through-rates since you are putting money in their bank accounts. It is a self-service advertising system, you can switch on and switch off your ads campaigns at will. Hence you can easily stop campaigns that are leaking your budget without favourable returns. Take note off these before you break away from your PPC patterns.
Do you want to work with good advertisers? CPM Bidding is the way to go.
Marketers who are unsuccessful through CPM bidding are sufferers of their own indolence and unprofessional work. The days of cheap click are gone for ever, but CPM makes it possible to reduce the costs of your clicks materially. Bear in mind that if you become addicted to PPC bidding, you will always be limited by the synthetic ceiling of what Facebook decides to charge for that click.
Taking the CPM direction, you’re still going to be somehow face Facebook’s charging variations. However, a good CTR will definitely determine the outcome of your campaigns. It is possible to sideline Facebook’s valuation of a click and get cheap traffic by placing only laser targeted advertisements in your campaigns. Make a difference as good affiliate and you will be rewarded and produce profit.
Bidding CPM is the best way to come close to reproducing the cheap traffic that existed during few years ago of Facebook Ads. Target your markets like a guru and made bold that there is still good money to make from Facebook CPM ads.
What then Is the Biggest Problem With CPM Bidding?
Facebook is very unfriendly when you want to implement day parting in your CPM campaigns. To be successful, you must be able to display your ads during certain period of the day and switch off at some unproductive periods.
However, you will have to make use of some tools and scripts to go around the problem and do manual day-parting, and if you are going to run profitable Facebook Ads day parting is absolutely critical to any CPM campaign.
Needless to tell you here that some offers do not only attract more clicks at some specific period of the day but they also covert better at that period. If you are running PPC campaigns, this may not be a necessary factor to put into consideration. However, with CPM campaigns, if you run your campaigns and clicks at off pick periods, you will damage your budget. If you’re running PPC, you at least have the safety net of only paying for clicks. If you lack access to the tools and scripts will be to manually pause your campaigns during dull periods.
If you want to optimize and prime your traffic, then, CPM with day parting is the right way to go.