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Consumers have been more concerned about Facebook privacy than usual since the social network introduced "instant personalization." And now it looks like advertisers might have a reason to be wary of Facebook policy changes as well.

According to a letter that Facebook sent out to advertisers late last week, brands that have been buying CPM ads on the network may soon find their campaigns becoming less effective.

AllFacebook has a copy of the letter, which reads in part:

"Among other ongoing improvements, we are refining our ads delivery system to better reflect the goals of our advertisers. This change will take place over the next few weeks and, assuming current bids remain unchanged, will mean that:

  • CPC advertisers (advertisers who have chosen to bid “cost-per-click”) may receive more clicks.
  • CPM advertisers (advertisers who have chosen to bid “cost per thousand impressions”) will continue to receive impressions but may receive less clicks."

One advertiser tells AllFacebook:

“This is a HUGE deal since I am getting CPM clicks for about $0.40 by writing good ads, and CPC costs me almost double.”

Paying for impressions can be better than purchasing click-throughs if brands are confident that their ad copy will bring in higher click-through per impression than most. But if Facebook repositions CPM ads in places that aren't conducive to clicks, the savings would disappear.

As commenter Don Synstelien puts it on Silicon Alley Insider:

"I can't think of any way that FB could do what they are indicating within their current layout unless they swap the CPM ads to the lowest placement on the totem pole of ads they have on page.

If that is the case, they really are screwing buyers of CPM ads - being lowest on page also indicates that users may not actually ever "see" the ad even though the ad will be technically "loaded" on the page and counted as an impression, perhaps even below the fold."

CPM ads on Facebook also allow advertisers to take advantage of user demographic information, which can make ads more effective. If this feature gets added to CPL ads, it could increase their click-throughs in relation to CPM. But the change could simply close the door to a loophole many advertisers have enjoyed until now

As an AllFacebook commenter writes:

"Rats, they finally fixed it. Smart Facebook advertisers have always stayed away from CPC because CPM was so much cheaper (if you know what you’re doing). Disappointed that I will no longer be able to take advantage of this strategy."

Image: David Boyle

Meghan Keane

Published 3 May, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

721 more posts from this author

Comments (2)

Geoff Andrews

Geoff Andrews, Lead Generation Manager at Kumon Educational UK

That is a blow for CPM advertising unless we can opt out of "application" ads.

If a user is playing Farmville on a Netbook then they will never see those impressions based on Don Synstelien's assumptions.

over 6 years ago



I would love to hear some positive stories about using Facebook's platform vs. other CPC (or even CPM based) campaigns. When they first launched the platform I felt I could get decent rates in the auction from a CPC standpoint and the impressions you get with poor click rates warmed my heart. Loved some of the profile-based targeting options, but my experience was ultimately that post-click follow-through is abysmal and I'm increasingly cynical about the value of the impressions given the size/format/placement of the ads. To Geoff's point, the opt-out on applications might be a helper.

over 6 years ago

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