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Facebook changes the way it charges for advertising

9th Jul 2015
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Facebook has seemingly diluted the commercial value it places in users liking and sharing content, by announcing that it will no longer charge advertisers when users apply ‘social’ clicks to paid-for ads.

Brands will instead be charged solely for external clicks or off-site calls to action, such as ‘shop now’.

In a Facebook for Business blog post, the social network highlighted the difficulty of brands attaching ROI to social clicks contained within the Facebook website and app, stating that external clicks were a more profitable metric to advertisers.

“Advertisers come to Facebook to drive business goals, like in-store traffic and website clicks, and they need to know how effective their ads are at driving their stated goal,” the blog post states.

“This update is intended to help advertisers better understand how their ads perform against their objective. In the coming weeks, this change will take effect in Ads Manager and Power Editor as well.”

Cost-per-click (CPC) charges will now only apply to the following actions:

•             Clicks to visit another website
•             Call-to-action clicks that go to another website (i.e., “Shop Now”)
•             Clicks to install an app
•             Clicks to Facebook canvas apps
•             Clicks to view a video on another website  

Back in March 2014, Forrester’s principal analyst, Nate Elliott put the heat on Facebook by writing a well-publicised open letter to Mark Zuckerberg stating that the current advertising process was “failing marketers” and that paid ad products weren’t “delivering results”.

The new iteration of the social network’s CPC offering appears to have this type of comment front of mind, stating that the update is “designed to provide measurement that’s more closely aligned with how advertisers are bidding so they can better optimize their campaigns against their stated goals” and that brands could expect a better return on spend as a result.  

“Facebook's shift to separating off-site clicks from social clicks makes logical sense as they continue their move towards objective based ad buying,” says David Zelniker, product manager for advertising platform, Kenshoo.

“This change allows our clients, focused on performance marketing, to pay for the action they care about most: offsite link clicks - whether that be clicks to Shop Now, Install an App, Sign Up, or any other click that takes a consumer to an advertiser's desired destination.”

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