From oCPM to Optimized Bidding - Navigating Facebook’s New Bidding Terminology

Miikka Jokela

Marketing

Since oCPM, CPC and CPA bidding merged into Facebook’s new optimized bidding setup, people have been shell-shocked of where they went. In reality, nothing but their names changed and more optimization options were introduced.

Today, you can choose from 15 different campaign objectives on Facebook. Altogether you can select from 50 different combinations of what your objective is, what to optimize for, and when you get charged. Fifty options may seem like a lot, but this way Facebook enables you to target and optimize your ads towards the best suited audiences and get the best possible ROI for your campaigns. Therefore, choosing the right objective is important to indicate what you want people to do when they see your ads and enable Facebook to help your campaigns meet that specific objective.

Optimized Bidding on Facebook

The campaign objective you select reflects what you want to achieve with the ads. Choosing the right objective for your campaign is important because it defines what optimization goals, bidding methods and ad formats are available and therefore how well your ads can be optimized for the people most likely to take the actions you want.

After identifying your primary goal and deciding on your objective, you need to choose what you’ll optimize your ads for. However, this isn’t necessarily what you get charged for. This means that after deciding your objective, you have three decisions to make when advertising on Facebook:

1. What to optimize for (16 options)

  • Facebook’s algorithms will focus on showing your ads to those people in your audience who are most likely to perform this action, or in the case of reach, to as many people as possible.

2. How much to bid (Automatic or Manual)

  • Facebook’s automatic bidding is very easy and provides reasonable results. However, as you learn more about how the system works, it makes more and more sense to manage bids manually because only you know what you’re willing to pay per converted user. That way you’ll be in control of balancing price versus delivery volume.

3. When you get charged (6 options)

  • Depending on your objective, you may choose to get charged for either Impressions, Link Clicks, 10-second Video Views, Page Likes, Post Engagements, or Installs.

 

Dude, Where’s My oCPM?

Facebook changes fast and bidding is no exception. Though in reality, only the names have changed - all the old options are still available and they’ve actually been spiced up with some newcomers like Brand Awareness optimization!

Previously the default option for many advertisers was oCPM but there’s no longer an option with that name in the bidding setup. oCPM has always been about optimizing your delivery so that your ad is shown to the people most likely to perform your desired action (e.g. Link Clicks or App Installs) but paying for the impression, not the action.

In practice, oCPM now simply means paying for impressions and optimizing for anything else. CPA and CPC, on the other hand, simply mean you optimize towards and pay for the same action, be it post engagement, link clicks, app installs, or something else. In many cases, optimizing for an action and paying per impression is the option recommended by Facebook, but for some objectives you may be better off being charged for actions instead.

So, while the previous bidding system required an understanding of the logic behind each term, e.g. CPC bidding actually optimized and charged for post engagements instead of link clicks, you now need to identify your primary goal and then answer two straightforward questions: 1. What do you want to optimize your ads for and 2. When do you want to get charged.

What do you think about the new optimized bidding on Facebook? Did it knock your socks off or is the abundance of options simply too much? Let us know in the comments!