Why Facebook is scrapping ‘Likes’ in CPC calculations to revamp how it charges click-based campaigns
Click-based campaigns on Facebook will no longer be measured by likes, shares and comments but instead focus on clicks to websites and apps in an overhaul designed to give advertisers greater clarity of how their budgets are doing on the social network.
This means brands will be able to track users once they move from a Facebook ad and are taken from the social network’s walled garden to a third party site or app. The link-click price calculation will also cover when a user clicks a call-to-action button, which include 'buy now' and app installation buttons.
According to Facebook this is “intended to help advertisers better understand how their ads perform against their objective”. The change in calculation could mean fewer clicks at higher cost per clicks (CPCs). However, for those advertisers who care about link clicks, the social network added they are “likely to see better return on advertising spend, since they’ll be paying for only the most valuable outcome” – which means the ad rates should be a better a reflection of how their campaigns are driving business results.
Marketers can still choose to run their campaigns based on engagement clicks although those actions won’t be measured by the new CPC calculation. By separating the performance and engagement metrics, Facebook can now begin to inflate its costs for link clicks at an accelerated rate.
This is hinted at in Facebook’s blog post announcing the revamp: “As a result of this change, some campaign reporting metrics related to clicks may look different. By excluding likes, shares and comments, CPC may 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.”
While Facebook’s sprawling ecosystem is built to keep users engaged for as long as possible, the move to seemingly charge advertisers more to push people away from the platform shifts the emphasis on performance-driven campaigns. Some brands still think of Facebook as an engagement-focused platform despite its growing focus on proving its contribution to business results, particularly when it comes to linking its ads to TV and in-store sales.
This focus on performance is going to become increasingly important to Facebook efforts to forge its proposition around content creation and establish itself as an inbound marketing platform. It’s why it launched its CMS for publishers earlier this year and is why the rumour it is planning a music streaming service aren’t hard to believe.
David Zelniker, product manager for Kenshoo, said the social network's “shift to separating off-site clicks from social clicks makes logical sense as they continue their move towards objective based ad buying”.
“This change allows our clients, focused on performance marketing, to pay for the action they care about most: offsite link clicks - whether that be clicks to Shop Now, Install an App, Sign Up, or any other click that takes a consumer to an advertiser's desired destination,” he added.
Twitter introduced a similar change to its CPC model last year whereby advertisers only paid for specific ad outcomes like clicks rather than when someone favourited one of their ads. The change was cited as one of the reasons for a dip in revenue in its first quarter of 2015.
Facebook said its own CPC revamp would arrive “in the coming weeks”.