One thing that
always seems to confuse people more than anything else is whether to pay for
clicks Pay per Click (PPC) or for impressions using the Cost Per Mille (CPM)
option. So which is the better option for you to get more bang for your buck?
What's the difference anyway?
When you pay for clicks (PPC) you are paying a pre-defined amount of money for every time someone clicks on your advert, so if every click costs 0.20c and you get 5 clicks you owe Facebook 1 Euro. - You can remember it as mobile credit- each sms has a price - each sms will cost you a few cents - once you spend all your budget you will not be able to send out any more messages and you would need to top up again.
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So
which is the better option?
To decide which option to go for, you have
to consider and work out which gives the lowest price by using these 3 factors:
o
the rate at which people seeing
your advert are clicking on it and going through to your page (Click Through
Rate or CTR)
o
the price of one click (for
PPC)
o
the price of one thousand
impressions (for CPM)
THEN WORK IT OUT IN THIS WAY
Say we have a CTR of 1% (so for every 100
times the advert is shown, one person clicks on it). The price of one click
using PPC is 0.20c and the cost of one thousand impressions is Euro 2.80. Using PPC, for every click you are paying
0.20c while using CPM it will cost you 0.28c (1000 impressions with a CTR
of 1% gets you 10 clicks that cost 2.80 collectively which is 0.28c per click).
In this case therefore, it would be better to go for the Pay Per Click option.
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What does this mean?
Although prices
for PPC clicks and CPM impressions vary according to your target audience, CPM
will most often prove to be the cheaper option once your CTR is high enough.
In the example above, if we had to improve the Click Through Rate (CTR) by another 1%, getting it up to 2%, the cost per click for your CPM impression would start to cost you only 0.14c, saving 0.6c from every click which might not sound like a big deal for one click but over the entire campaign it would mean that a whopping 30% of your marketing money is still in your pocket to be invested in more clicks or other priorities.
Improving CTR
involves some skill. We will happily give you some good tips on improving your
CTR or other needed advice FOR FREE by asking us directly.In the example above, if we had to improve the Click Through Rate (CTR) by another 1%, getting it up to 2%, the cost per click for your CPM impression would start to cost you only 0.14c, saving 0.6c from every click which might not sound like a big deal for one click but over the entire campaign it would mean that a whopping 30% of your marketing money is still in your pocket to be invested in more clicks or other priorities.
