The Executive Suite: Changes Coming to Facebook’s Cost Per Click Policy

Friday, July 10, 2015

Changes Coming to Facebook’s Cost Per Click Policy

Image courtesy of (arztsamui)/ FreeDigitalPhotos.net

Facebook advertisers are likely clicking the ‘like’ button over policy changes introduced by the social media network.

The changes involve how Facebook charges advertisers for interactions with users. Previously, through its cost-per-click policy, advertisers were billed when users liked, commented on and shared ads on their newsfeed. However, changes introduced Wednesday eliminated those charges with Facebook explaining, in a blog post, charges will now be applied only when users click on a link to an advertiser’s page or their app.

“Over the last few years, Facebook’s ad offerings have become increasingly tailored to helping advertisers meet specific business objectives,” the post explained. “This update is part of that effort: it’s 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.”

Facebook further explained the changes should pay off for advertisers because they will only be paying for “the most valuable outcome.” Advertisers’ budgets will be spent in a more efficient manner, the post added.

However, this change doesn’t necessarily spell out savings for advertisers.

Business Insider noted Facebook will likely increase its rates to reflect the change, but advertisers will still be able to reach potential customers and have the ability to track effectiveness.

It could be a financial gamble for Facebook, though. Twitter made similar changes, The Wall Street Journal reported, and reported a decline in advertising revenue in the first quarter of 2014.