Why CPC, CPM, oCPM, and other bid types don't matter

Don't chase the trickster rabbit into the briar patch. Unless you are in the business of building ad optimization software (like me), it's a distraction for you. Back in 2007, it mattered. The Facebook ad algorithms weren't smart enough to know what a conversion was, so you had to spoonfeed targets, placements, and bids. That's still the case with Twitter, LinkedIn, Pinterest, and Apple's iAds platforms, but they'll get there. Objective-based bidding eliminates the need for you to specify bids. When you select the goal you want (leads, conversions, video views, RSVPs, app installs, etc), the system does the work for you. The default bid method on Facebook is oCPM (optimized CPM) and you should leave it there, except in rare circumstances. We used to be able to trick the system in all sorts of ways, the topic of another article, but now it's not necessary. The people who peddle Facebook ads advice for a living don't want you to know this. They might not even know this themselves, that oCPM not only bids for you, but selects the subset of the audience most likely to convert. That's why today you can get away with having such broad targets and doing things like boosting posts. The other fallout from this is that you don't need much in the way of Facebook ad consultants or software anymore. You can imagine what these people will say if you mention this-- you, a novice, shouldn't ever dare run your own ads. You might mess it up-- trust us experts to do it for you. But I'm not saying don't hire consultants. You might very well need help with a content strategy, building landing pages, doing community management, and clarifying goals. In other words, GCT (goals, content, and targeting). But beyond the necessary inputs into Facebook (what we call "plumbing"), let the machine do the rest. This is mostly true with Google, too, which has built a strong Conversion Optimizer that even takes into account seasonality. I've made a handy living as a high priest of Facebook ads for years. And like Big Blue beating Gary Kasparov, if I may dare compare myself in this way, the computer now wins. There is no shortcut, unless you believe in get rich quick schemes, magic weight loss and oceanfront property in Colorado. But if you have the necessary inputs, the heavy optimization work is done for you already. Trying to fiddle with CPMs by placement is like sticking your hand underneath a running lawn mower. Lowering CPCs often comes at the expense of conversion rate and hitting the wrong audience. The placements change, time of day variants affect performance, creatives burn out, and micro-interest targets vary. You might declare a false victory by claiming to have increased reach or gotten impressions for less, but don't be fooled. Now if I could have my fee for the amount of money and headache I just saved you. Just kidding. Try this out and let me know whether you can beat the machine. Give me specific examples and I'll publish some of the winners. Top image courtesy of Shutterstock.

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Why CPC, CPM, oCPM, and other bid types don't matter

Dennis Yu

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Dennis Yu