Determining Either CPM or CPC Bidding on Facebook Ads

The bidding strategy plays a big role in determining the profitability of a CPC campaign. On Facebook, advertising is very effective but if you don't bid the right way then you might end up with a loss. Careful calculations must be made prior to spending any money. For your Facebook campaign you can either go for cost per click (CPC) or cost per 1000 impression (CPM) ads. Choosing the right one can be difficult. For some particular offers the former works better whereas for others the latter one is a better choice. You also need to have a look at you budget before choosing any one of them. The easiest thing that a person can do to check the profitability of a campaign is calculation of earnings per click (also termed are EPC). It is simply the profit that you earn from a single visitor. To calculate the EPC for your ads, just divide total earnings with number of visitors. Let's say that the result comes out to be 95 cents. So now you know exactly how much you can bid for a single click (less then 95 cents).

An important thing that every advertiser should know about Facebook is that it doesn't like it when people lower their bids. Often it happens that when an advertisers starts with a large number and keeps lowering his bid then his ads stop appearing altogether. So what you need to do is start with a very low bid and keep adding a few pennies to stay on the top. However, remember not to cross the EPC otherwise you will have to pay more than your profit. This bidding strategy will ensure your success in the long run.

Now that we have covered CPC ads, let us move on to CPM.

This type of ads can work in both ways - they can help you make a lot of money if the ad gets a lot of clicks or it can burn some of your own money if the ad doesn't work out well. So when should someone choose CPM? The answer is simple: one should choose CPM when one knows for sure that his or her ads will have a very good click through rate. In such a case, CPM is a lot cheaper than its counterpart. In case of CPC advertisers need to pay only when their ad gets clicked but that doesn't mean that every visitor will convert. Therefore don't bid higher than the required amount. Usually you have to pay at least 30 cents for a click otherwise the ad doesn't show up on Facebook. (This number may vary based on the demographics. In some cases it goes up to 90 cent per click).