Should I Choose CPC or CPM for Facebook Ads?

Facebook holds the title of being the world’s most popular social media network. While the exact number of users remains unknown, some estimates indicate that more than 1.4 billion people log into the site each month. With such a massive user base, it should come as little-to-no surprise to learn that Facebook is a powerful marketing tool for small and mid-sized businesses (SMBs).

But you don’t have to rely strictly on Facebook’s organic posts to connect with your target audience. The social media giant has a self-serving advertising platform that can be used to reach a larger audience. Facebook Ads allows SMBs and advertisers to create custom ads which are placed in front of their specified demographic of users. When promoting your brand on Facebook Ads, though, you’ll need to choose between a cost-per-click (CPC) or cost-per-impression (CPM) format.

CPC vs CPM: What’s the Difference?

Let’s first go over the basics of CPC and CPM, because some people are likely hearing about them for the first time. CPC is a model in which the advertiser pays a small amount for each qualified user who clicks on his or her ad. As explained in this article, the minimum CPC bid for Facebook Ads is $0.01. However, that’s typically not enough for an ad to display, meaning you’ll need to bid higher for maximum visibility.

CPM is different in the sense that advertisers pay for every 1,000 users who see their ad, regardless of how many users actually click the ad. If your CPM is set at $2, Facebook will charge your advertiser account $2 for every 1,000 ad impressions. Assuming 10,000 people see your ad, you’ll pay $10.

Choosing Between CPC and CPM

There’s really no clear answer as to which model is most effective when using Facebook Ads. For some businesses, CPC may deliver a higher return on investment (ROI). For others, CPM may work best. With that said, most seasoned advertisers will agree that it’s best to start with CPC when directly promoting a product or service on Facebook Ads. CPC gives you more control over your spending, meaning you can really optimize your campaigns for a higher conversion rate and lower spending cost.

But this doesn’t mean that CPM should be ignored. On the contrary, if your goal is to sell a product or service AND build greater brand recognition, CPM is probably the better choice. Even if your ROI is low, the increased brand recognition from CPM is added value that’s not found in the CPC model.