Facebook Ads Bidding Changes: Optimization, Charging and oCPM

Facebook Ads Bidding Changes

Facebook has made several sudden changes to ad bidding that will impact how advertisers optimize their ad sets. Let’s take a closer look at what the change is, what it means and what the options now are for each objective.

What Changed with Bidding and Optimization?

Facebook put out the following explanation in the Help Center regarding what changed:

What you choose to optimize for is no longer tied to what you get charged for. This means that you now have three decisions to make: what to optimize for, how much to bid and when you get charged. For example, you could now optimize for website conversions and pay for link clicks using automatic bidding.

The way clicks are measured has changed for some objectives. For website clicks and website conversions objectives, you can now choose to optimize and get charged for link clicks. Link clicks are clicks on your ad that takes people off Facebook. Other kinds of clicks on those ads will not be counted and you won’t be charged for them if you’ve chosen to be charged for link clicks.

Optimized cost per-impression (oCPM) has changed. oCPM is no longer an option in the optimization for ad delivery dropdown. You can choose to optimize your ad for link clicks and get charged per impression, which, put together, is the equivalent of the old oCPM. However, this is not always the best choice. For some objectives, you may be better off being charged for actions, for example.

So let’s clarify each point here…

1. What you optimize for is no longer tied to what you are charged for.

There are three primary decisions to make.

  • What to optimize for? When using the Clicks to Website objective, for example, you can optimize for Link Clicks to Your Website (Default), Impressions or Daily Unique Reach
  • How much to bid? Choose either Automatic (Facebook bids for you) or Manual (you enter your bid)
  • When do you get charged? Regardless of the optimization, you determine whether you pay per link click or impression, for example

2. The way clicks are measured has changed for some objectives.

Under the old definition of a “click,” many advertisers unknowingly paid for clicks other than website clicks when choosing CPC bidding, for example. This led to misleading stats. Clicks now only refer to link clicks when the objective is Clicks to Website or Website Conversions.

3. oCPM has changed.

It appears to be gone for some objectives, but it’s simply moved. Previously the default option, paying for optimized Cost Per 1,000 Impressions is now secondary in some cases.

Let’s get to that…

Is oCPM Dead?

If you listen to much of the chatter, this announcement means that Optimized Cost Per Impression bidding (oCPM) is dead. It’s not.

Facebook’s oCPM has always been the default option for advertisers, and it’s led to a great deal of success. With this bidding method, Facebook optimizes your ad, showing it to people most likely to perform your desired action. Advertisers pay for the impression, not the action.

The result of this was that the cost to reach people was higher, but the likelihood of an action was also higher. Typically, this produced a lower cost per desired action.

While oCPM isn’t dead, it won’t always be the default going forward. But keep in mind that, depending on your objective, optimizing for your action and paying for impressions (essentially oCPM) will still be the default.

What Works Best?

This is bound to be one of the first questions people ask now that there are some new options. The answer will always be “it depends.”

Since I frequently run Clicks to Website campaigns with Link Clicks optimization using oCPM bidding, I’m curious regarding how the new options will change things.

What works best? Split test. When you’re done, split test and split test some more.

In my very early testing, I’m seeing a slightly lower price when optimizing for Link Clicks while being charged for impressions over link clicks. This is by no means a trend, but something to test yourself and keep an eye on.

Let’s take a closer look at bidding and optimization by objective…

Brand Awareness Objective

The “Brand Awareness” objective is new. It allows you to show your ads to people most likely to pay attention to them.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: Brand Awareness
  • Bid Amount: Automatic (Facebook helps you get the most brand awareness at the best price)
  • When You Get Charged: Impression

Optimization Options

The only other option for this objective is Reach.

Facebook Ads Optimization

In other words, Facebook will show your ad to the maximum number of people, regardless of whether they are the right people (still within your target audience, of course).

When choosing Reach, you get to make the unique decision of frequency: select the number of days between showing your ad to the same person.

Bidding Options

If you optimize for Brand Awareness, bidding will be automatic. If you optimize for Reach, you’ll manually set your CPM bid.

Charging Options

Regardless of how you set this up, you will only pay for impressions.

Clicks to Website Objective

Choose this objective when your primary goal is to drive traffic to your website.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: Link Clicks to Your Website
  • Bid Amount: Automatic (Facebook helps you get the most link clicks at the best price)
  • When You Get Charged: Link Click (CPC)

When you get charged, by default, for this objective is one of the biggest changes. Previously when running Clicks to Website ads, you would optimize for link clicks and pay for impressions. Now, however, you pay for each link click by default.

Optimization Options

Facebook Ads Optimization

The other optimization options are Impressions (deliver your ad as many times as possible) and Daily Unique Reach (deliver your ads no more than once per day per person).

Bidding Options

Regardless of how you choose to optimize, you will have the option of using Automatic or Manual bidding. This is a big change as previously the “Link Clicks to Your Website” optimization option only allowed for automatic bidding while both Impressions and Daily Unique options required manual bids.

Charging Options

When choosing “Link Clicks to Your Website” optimization, you will have the option of paying for either Impressions or Link Clicks (CPC).

Facebook Ads Optimization

However, the other two optimization options only allow for charging by Impressions.

Desktop App Engagement Objective

Choose this objective when your primary goal is to encourage engagement with your desktop application.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: Engaged Users
  • Bid Amount: Automatic (Facebook helps you get the most results at the best price)
  • When You Get Charged: Impressions

Optimization Options

Facebook Ads Optimization

The other optimization options are Post Engagement (delivering to people who create the most comments, likes and shares), Daily Unique Reach or App Events (delivering to people who perform actions within your app).

Bidding Options

Regardless of how you choose to optimize, you will have the option of using Automatic or Manual bidding.

Charging Options

Post Engagement optimization allows you the choice of being charged for Impressions or Post Engagement. All others allow only for charges per impression.

Desktop App Installs Objective

Choose this objective when your primary goal is to encourage installs of your desktop application.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: App Installs
  • Bid Amount: Automatic (Facebook helps you get the most app installs at the best price)
  • When You Get Charged: Impressions

Optimization Options

Facebook Ads Optimization

The only other optimization options Post Engagement (delivering to people who create the most comments, likes and shares).

Bidding Options

Both optimization options allow for Automatic and Manual bidding.

Charging Options

If you optimize for App Installs, you will be charged for Impressions; if you optimize for Post Engagement, you will have the option of being charged for Impressions or Post Engagement.

Event Response Objective

Choose this objective when your primary goal is to increase responses to your Facebook Event.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: Event Responses
  • Bid Amount: Automatic (Facebook helps you get the most Event interest at the best price)
  • When You Get Charged: Impressions

Optimization Options

Facebook Ads Optimization

The other optimization options are Impressions, Post Engagement and Daily Unique Reach.

Bidding Options

Regardless of how you choose to optimize, you will have the option of using Automatic or Manual bidding.

Charging Options

When choosing Post Engagement optimization, you will be charged for each engagement. When choosing any other optimization option, you will be charged for impressions.

Lead Generation Objective

Choose this objective when your primary goal is to increase leads through a Facebook form using Lead Ads.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: Leads
  • Bid Amount: Automatic (Facebook helps you get the most results at the best price)
  • When You Get Charged: Impressions

Optimization Options

Facebook Ads Optimization

The only other optimization option is Link Clicks.

Bidding Options

Regardless of how you choose to optimize, you will have the option of using Automatic or Manual bidding.

Charging Options

When choosing Leads optimization, you will be charged for impressions. When choosing Link Clicks optimization, you will be charged for link clicks (CPC).

Local Awareness Objective

Choose this objective when your primary goal is to show your ad to people locally near your place of business.

There is little reason to get into the weeds on this one since the options are limited…

Facebook Ads Optimization

The only optimization option is Daily Unique Reach.

You can select either Automatic or Manual bidding.

You will always be charged for Impressions.

Mobile App Engagement Objective

Choose this objective when your primary goal is to encourage engagement with your mobile application.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: Link Clicks
  • Bid Amount: Automatic (Facebook helps you get the most link clicks at the best price)
  • When You Get Charged: Impressions

Optimization Options

Facebook Ads Optimization

The other optimization options are Link Clicks – Legacy, Daily Unique Reach and App Events. You’d use Link Clicks – Legacy if you want to bid using the old version of CPC (expect this to go away soon).

Bidding Options

Regardless of how you choose to optimize, you will have the option of using Automatic or Manual bidding.

Charging Options

The primary Link Clicks optimization option allows for being charged for impressions or link clicks (CPC). Legacy Link Clicks optimization only allows for CPC. If you choose the other two options, you’ll be charged for impressions.

Mobile App Installs Objective

Choose this objective when your primary goal is to encourage installs on your mobile application.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: App Installs
  • Bid Amount: Automatic (Facebook helps you get the most app installs at the best price)
  • When You Get Charged: Impressions

Optimization Options

Facebook Ads Optimization

The other optimization option is Link Clicks.

Bidding Options

Regardless of how you choose to optimize, you will have the option of using Automatic or Manual bidding.

Charging Options

When optimizing for App Installs, you will have the option of being charged for the impression or by install. When optimizing for link clicks, you can be charged by impression or link click (CPC).

Offer Claims Objective

Choose this objective when your primary goal is to increase claims using the Facebook Offer ad unit.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: Offer Claims
  • Bid Amount: Automatic (Facebook helps you get the most offer claims at the best price)
  • When You Get Charged: Impressions

Optimization Options

Facebook Ads Optimization

The other optimization option is Post Engagement.

Bidding Options

Regardless of how you choose to optimize, you will have the option of using Automatic or Manual bidding.

Charging Options

When optimizing for Offer Claims, you will be charged for impressions. When optimizing for Post Engagement, you can be charged by impression or post engagement.

Page Likes Objective

Choose this objective when your primary goal is to increase page likes

Like the Local Awareness objective, your options here are limited…

Facebook Ads Optimization

The only optimization option is Page Likes.

You can select either Automatic or Manual bidding.

You can choose to be charged for either impressions or per Page Like.

Page Post Engagement Objective

Choose this objective when your primary goal is to encourage engagement (comments, likes, shares or general clicks) with your Facebook post. This objective is best for photo posts.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: Post Engagement
  • Bid Amount: Automatic (Facebook helps you get the most post engagements at the best price)
  • When You Get Charged: Impressions

Optimization Options

Facebook Ads Optimization

The other optimization options are Impressions and Daily Unique Reach.

Bidding Options

Regardless of how you choose to optimize, you will have the option of using Automatic or Manual bidding.

Charging Options

If you choose Post Engagement optimization, you can be charged for either impressions or post engagements. Otherwise, you’ll be charged for impressions with either of the other two optimization options.

Product Catalog Sales Objective

Choose this objective when your primary goal is product catalog sales using Dynamic Product Ads.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: Link Clicks
  • Bid Amount: Automatic (Facebook helps you get the most link clicks at the best price)
  • When You Get Charged: Impressions

It is a bit interesting that Dynamic Product Ads optimize for link clicks instead of conversions and that the only option for charging is impressions. Meanwhile, the Clicks to Website objective allows for charging per link click.

Optimization Options

Facebook Ads Optimization

The other optimization option is Impressions.

Bidding Options

Regardless of how you choose to optimize, you will have the option of using Automatic or Manual bidding.

Charging Options

Regardless of your optimization choice, you will be charged for impressions.

Video Views Objective

Choose this objective when your primary goal is video views when promoting a Facebook video.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: Video Views
  • Bid Amount: Automatic (Facebook helps you get the most video views at the best price)
  • When You Get Charged: Impressions

Optimization Options

Facebook Ads Optimization

The other optimization option is Daily Unique Reach.

Bidding Options

Regardless of how you choose to optimize, you will have the option of using Automatic or Manual bidding.

Charging Options

When selecting Video Views optimization, you can choose to be charged by impression or 10-second video view. Otherwise, you’ll be charged for impressions when using Daily Unique Reach.

Website Conversions Objective

Choose this objective when your primary goal is a website conversion of some kind (sale or registration, for example) and you are optimizing using the Facebook conversion pixel, standard events or custom conversions.

Default

Facebook Ads Optimization

By default, you will use the following options:

  • Optimization: Conversions
  • Bid Amount: Automatic (Facebook helps you get the most results at the best price)
  • When You Get Charged: Impressions

Optimization Options

Facebook Ads Optimization

The other optimization options are Impressions, Link Clicks to Your Website and Daily Unique Reach.

Bidding Options

Regardless of how you choose to optimize, you will have the option of using Automatic or Manual bidding.

Charging Options

When optimizing for Link Clicks to Your Website, you will be charged for link clicks (CPC). Otherwise, you will be charged for impressions when choosing any of the other three options.

I find it curious that you can choose to be charged for either link clicks or impressions when choosing to optimize for Link Clicks to Your Website while using the Clicks to Website objective, but you can only be charged for impressions when doing the same with the Website Conversions objective.

Your Turn

The bottom line is that Optimized CPM is not dead. Instead. Facebook is simply providing more options and more control (and possibly more confusion) for how you run your ads.

What do you think about these changes? Let me know in the comments below!