Some advertisers on Facebook are seeing a new pricing option called “action-optimized CPM” in the Marketplace dashboard.
According to Facebook, this is a way to determine the interest in optimizing campaigns for actions such as page Likes or app installs, not a true test of cost-per-action pricing. Advertisers who select “action-optimized CPM” are still being charged each time their ad is viewed.
This test could be an indicator that Facebook is considering a new cost-per-action model for its self-serve ad platform. It’s also possible the company is reevaluating its cost-per-impression offering. Unless advertisers are linking to an external website, most campaigns on Facebook aim to get users to Like a page, install an app, attend an event or take another similar action within the social network. Paying per impression does not seem to be ideal for most advertisers in these cases.
Across the industry, advertisers are moving away from CPM models that do not ensure that consumers are truly seeing their ads. Cost-per-conversion, action or engagement are much more desirable because companies do not have to pay unless an ad is effective. In fact, some third-party ad providers that use Facebook’s API, such as AdParlor, charge and optimize for cost-per-fan or cost-per-install as opposed to the CPM or CPC options in Marketplace.
Facebook could provide something similar in the future to emphasize its strength in getting users to connect with pages or engage with Sponsored Stories. However, Facebook will need to consider how this sort of change would affect developers working with the ads API, which was brought out of private beta in August. It is possible that third-parties who sell on cost-per-action models could lose that advantage over Marketplace, but it is likely their ability to run large-scale tests to optimize creative will still make third-party vendors an attractive option for some.
Image credit: All Facebook.com
Article courtesy of Inside Facebook