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Facebook CPM, Facebook PPC, Which Way?

The life blood of any business, online or offline, is traffic. No matter how good your product is, if no one knows it exists, you won’t make any money. In this report, I will show you how to make Facebook PPC profitable with Facebook CPM ads.

If you have just done online business recently or you are new to Facebook Ads, i.e. you are a newbie in Facebook Ads, you may be wrong to focus too much on FB PPC only.

PPC stands for cost per click, i.e. you only pay for the number of clicks you receive on your FB ads. The upside of this is that you won’t waste your budget on zero clicks like other forms of FB ads. You need to know how to raise your FB PPC bids enough to start breaking even early on, even if you aren’t immediately profitable.

On the other hand, CPM is a cost per thousand. It just means you pay that much for a thousand impressions. What do I mean by impression? This means the number of views your FB ads receive. For example, if you display a banner on Facebook, the number of times people see the banner. So if you bid $5 per thousand, you will pay $5 for every 1000 views of your ads. The advantage of CPM over PPC is that you may only be paying a fraction of what it costs to get a click under the latter. With a very good click-through rate, you will easily make a profit. Facebook will easily send you traffic regardless of your clickthrough rate because they are sure to generate revenue whether you get clicks or not.

What I’ve discovered in my decades of working as an online affiliate is that many newbies are scared to death when it comes to bidding on CPM. Many prefer PPC over CPM because the former puts them behind the wheel while the latter puts you in the passenger seat.

But the reality of the matter is that it will be very difficult to make it as a Facebook affiliate by sticking only to the PPC model. With each campaign you launch, your objective should be to maximize the CTR and minimize Facebook’s propensity to inflate the price of a click. This means working on CPM and placing your ads in a way that motivates people to click rather than the other way around.

In this report, I am not trying to completely remove PPC bidding strategies. There are times when you will find them indispensable. However, I will highlight and teach how both strategies will work to give you profitable Facebook campaigns.

How to bid with PPC

In the very recent past, it was possible for an affiliate to bid on PPC and get tons of cheap clicks on their offer, I mean as cheap as a cent or two per click. Because the traffic converts and Facebook is one of the largest social media platforms in the world, many affiliates have become very wealthy. Hence, the influx of marketers has increased the completion and hence the cost has increased. The game is not over, but harder now.

It is still possible to get cheap clicks in certain niches and demographics. But if you’re targeting the most popular markets and demographics of the United States, be prepared for some very tough competition. The cheap clicks of the past are no longer available. Don’t get me wrong, PPC auctions are still very relevant and important.

Calculated tests with PPC

If I want to launch a new campaign on Facebook and assuming I’m green on converting the new launch, it makes sense to set the CTR such that at least I’ll break even. The math is very simple, if the click through rate is one in twenty, then and my bid payout is $10, then the max bid per click that will break me will be $0.05 .

It is reasonable to run these initial PPC tests to measure the conversion rate of any selected demographic on Facebook. Search PPC is not a fair enough indicator. The variation in conversion rates can be significant depending on the traffic source; especially if you are a direct link.

With an EPC of $0.50 and my personal preference being at least 100% ROI, my maximum cost per click will be $0.25. This then becomes my benchmark for a successful CPM campaign. If I can move to CPM and bid $0.25, I know I need to produce a CTR of 0.1 to get my 100% ROI.

There is uncertainty with the PPC results

The test analysis I outlined above will not work if the CTR is too low. Facebook is in business to make money and will serve ads to the customer who will put money in their bank account. If they serve a PPC client with 5000 impressions without a click, Facebook will earn $0.0. if they serve the same 5000 clicks to a CPM customer bidding a $15 cpm, Facebook will collect $75. It is reasonable that Facebook serves the CPM client with traffic rather than PPC.

Therefore, your CTR is very important. Using PPC bidding to determine your margin is a good idea, but you need to provide a good creative that will give you a good CTR otherwise you will continue to submit ads which will take almost a week to approve and take a few minutes and cease to receive traffic.

So what is the way out of this PPC imbroglio. The easiest way to overcome this challenge is to perform proper split testing. Submit at least 12 ad variations and make each one significantly different. This will attract a substantial amount of impressions and clicks from Facebook to sufficiently determine the test data. No matter how bad you are at managing your creation, the law of numbers will work in your favor.

Why are affiliates afraid of CPM?

From the analysis above, it is obvious that an unsuccessful PPC will waste time and effort and can ultimately lead to frustration. But no money will be lost. But an ineffective CPM will not only waste time and effort, it will drain your budget.

Facebook is probably the friendliest environment to test CPM. As I said above, Facebook gives you good traffic even with low click through rates since you are putting money in their bank accounts. It is a self-service advertising system, you can activate and deactivate your advertising campaigns at will. Therefore, you can easily stop campaigns that are losing your budget without favorable returns. Take note of this before you break away from your PPC patterns.

Do you want to work with good advertisers? CPM bidding is the way to go.

Marketers who fail with CPM bidding suffer from their own indolence and unprofessional work. The days of the cheap click are gone forever, but CPM can materially reduce the cost of your clicks. Keep in mind that if you get addicted to PPC bidding, you’ll still be limited by the synthetic cap of what Facebook decides to charge for that click.

By taking the lead in CPM, you will always be faced with Facebook billing variations. However, a good CTR will definitely determine the outcome of your campaigns. It is possible to put aside the valuation of a click by Facebook and get cheap traffic by placing only laser-targeted ads in your campaigns. Make a difference as a good affiliate and you will be rewarded and generate profits.

Bid CPM is the best way to get closer to replicating the cheap traffic that existed a few years ago on Facebook Ads. Target your markets like a guru and make sure there’s still plenty of money to be made with Facebook CPM ads.

So what is the biggest problem with CPM bidding?

Facebook is very hostile when you want to implement day parting in your CPM campaigns. To be successful, you need to be able to show your ads during certain times of the day and turn off during certain non-productive times.

However, you will need to use some tools and scripts to get around the problem and perform a manual day split, and if you want to run profitable Facebook ad split, day split is absolutely essential to any CPM campaign.

Needless to say here that some offers not only attract more clicks at a certain time of day, but also hide better at that time. If you are running PPC campaigns, this may not be a necessary factor to consider. However, with CPM campaigns, if you run your campaigns and click out of selection times, you will damage your budget. If you use PPC, you at least have the safety net of only paying for clicks. If you don’t have access to the tools and scripts, you’ll need to manually pause your campaigns during off-peak times.

If you want to optimize and prime your traffic, then CPM with day separation is the right way to go.

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