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Facebook Cost Per Click (CPC)

Lost in translation: deciphering cross-channel cost-per-click

By Elizabeth Jackson, chief marketing officer

July 17, 2015 | 6 min read

Facebook is overhauling the way click-based campaigns are measured, focusing on clicks from ads through to websites and apps, rather than likes, shares, and comments. The change is designed to give advertisers a clearer overview of the results of their ads and will empower brands to track user interactions as they leave the social network and continue their journey elsewhere.

Marketers rely heavily on the use of cost-per-click (CPC) to distribute their advertising across social media channels as well as retail sites, search engines and news sites, and Facebook’s changes highlight the need for clarity as consumer click intent differs greatly between platforms.

So, what is the true value of a click, how does the value vary from one website to another and what does this mean for marketers?

Search engines

According to MarketTree’s Online Shopping Behaviour study, conducted in May 2015, nearly a third of consumers used search engines when researching products, highlighting how useful the channel is for brand marketers looking to collect data on these users. Upper-funnel search terms can be useful to large brands attempting to target consumers early on in their purchase journey, although the risk is that these terms often drive clicks on topical and branded searches and are more focused on where the shopper will buy from than what they will buy.

Most brand marketers calculate the success of search advertising solely based on the resulting sales on their own brand websites, not accounting for the keyword search results belonging to other sites on which their product can be found. Marketers must therefore understand that a click through to their brand website from a search engine represents just a small percentage of total conversions to truly understand its value.

Social networks

There is no denying social media is a powerful tool for digital marketers looking to target the modern day consumer. However, visitors to these sites are faced with a huge variety of content and are not usually actively looking to make a purchase.

Therefore the likelihood of conversion is much smaller on social networks. Social media platforms should be used as a means to connect with the audience and promoted content should be used more as a branding tool than a platform for conversion.

However, the UK boasts the second largest social media ad spend globally, behind the US, accounting for 8.2 per cent of global ad spend in 2014. With both Snapchat and Facebook announcing developments to their video advertising offerings, and Instagram and Pinterest introducing ‘buy buttons’, marketers need to continually analyse the cost of advertising on these platforms against the likelihood of interactions becoming conversions, as this is a space that is undergoing rapid change. Facebook is joining the ranks of forward-thinking marketers that understand the need to create a clearer picture of consumer behaviour and the true intent behind each click.

News sites

It's no secret that news sites are making the shift to native. News UK announced the launch of its dedicated native advertising division in September 2014, following the introduction of Guardian Labs and and Metro’s Story earlier in the year.

Despite uncertainty as to whether they will lead to conversion or not, these ads are well placed on news sites. Not only do they provide the consumer with information at the time they are seeking it, but they also provide the publisher with data about the services and products that promote clicks from consumers, the news content that influences consumer decisions and the best placement of ads to boost engagement.

Retail sites

Perhaps unsurprisingly, shoppers who begin browsing on retail sites are far more likely to purchase a product than those who have clicked through from search engines, news sites or social media platforms, and two-thirds of high-intent consumers start searches on commerce sites when deciding what to buy.

This real-time insight allows brands and retailers to target active category shoppers with the right product, at the right time and can be used to place promoted listings within search results, increasing the value of clicks for paid search on these sites.

Additionally, the value of clicks that lead the consumer directly to a product description page that offers further product information, reviews and alternative options, is far more valuable than a click occurring earlier on in the shopper’s journey. A click that takes the consumer straight to the point of purchase can play a vital role in driving sales for a brand’s business through retail sites.

The number of channels on offer to marketers is only going to grow and companies need to understand the value of each of these – and where they sit within the purchase journey. Deciphering how the value of a click varies from one media site to the next will help marketers to invest wisely in each channel. Frequent review is critical, as so many online media opportunities, like social and native, are changing so rapidly.

But ultimately, the fundamentals stay true: appreciating the difference between upper-funnel consideration and lower-funnel conversion – and adapting strategies accordingly – is more likely to help lead consumers down the path to final conversion.

Elizabeth Jackson is chief marketing officer at HookLogic

Facebook Cost Per Click (CPC)

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