With digital advertising slated to account for ¼ of global ad spend next year, it’s important that you now how to properly utilize the money your business is investing in digital.
In this final installment on utilizing Facebook’s Power Editor Tool, we will review how to manage your spend and bidding strategy. By using the Optimization & Pricing engagement objective, you will be well on your way to improving your Facebook advertising performance.
3 Pricing Models – Broken Down
There are three options within Optimization & Pricing in the Power Editor Tool- CPC, CPM and Optimized CPM. We will assess all three to assist you in understanding how best to apply your budget.
1. CPC
CPC stands for cost per click. For your Facebook ads, this means that spend will used when someone clicks on one of your business’ ads. Facebook includes a Max Bid Per Click (USD) where you designate the specific amount you are willing to pay per click. This does not mean that every click will cost that amount, but that you would pay up to that price for clicks.
2. CPM
CPM stands for cost per impression. Facebook sets its pricing according to a Max Bid Per 1,000 Impressions. Meaning for every 1,000 impressions your ad receives, Facebook will charge you a maximum of your bid price. Facebook will put as many users as possible in front of your ad within your targeting constraints.
3. Optimized CPM
Optimized CPM offers advertisers a way to prioritize specific goals, letting Facebook work to most effectively maximize your budget with that goal in mind. You can use Facebook’s default bids, which sets a default bid at a price that will show to most of your target audience. This is helpful if you do not know what you should set your bid at.
Goal Setting
You can also manually set your goals for one of the following with whatever bid you deem most important:
- Clicks: Optimized to encourage clicks on your ads
- Reach: Optimized to reach people beyond your target audience
- Social: Optimized through social context, showing to people through friends as they interact with ads
- Actions: Optimized for people taking action on your ad
Pricing & Audience Optimization
Once your campaign has been created you can adjust your ad pricing based on which ads may be receiving more engagement. Be sure to read up on how to use the other categories in Facebook’s Power Editor tool as well to take full advantage of the tool- Creative and Audience.
Now that you know how to use each component of creating an ad in Facebook Power Editor, explore what works best for your business needs and audience. If you can find the right combination of specs for your ads, you’ll see a clear ROI on your advertising pursuits.
Additions & Feedback
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