How much does Facebook ads cost?

Do you know that the right bid can make you do more with less, save a lot of white flowers of silver?

Do you know that there are other ways to charge besides CPC?

Do you know what CPM, CPC, CPI, CPV are?

Do you know that whatever method of charging is ultimately CPM at its core?

If you've been dizzy and drink, let's explain how a Facebook ad is a charge method with a vivid, white chestnut!


(I, II is a technical basic knowledge, you can skip straight to III)


I. Find out the supply and demand first:


Whether buying chestnuts or advertising, you can't do without the balance between supply and demand. When buying chestnuts, supply is the total number of chestnuts, demand is the amount of chestnuts bought, when buying ads, supply is the total user ad consumption (can take advantage of advertising space), demand is advertisers to serve the advertising space. What is total user ad consumption? and watch the movie. 


Of course, we must admit that the world is cruel, some buyers are more rich, snapped up more chestnuts, resulting in some buyers will not get 10 chestnuts, which involves the bidding mechanism. 


II. Say also the basic bidding mechanism:


Suppose there are now two boxes of chestnuts lined up for auction, with 12 large boxes and six small boxes. 3 buyers in the rush. Buyer A has 50 yuan, willing to pay 3 yuan to buy a chestnut; buyer B has 50 yuan, willing to pay 5 yuan to buy a chestnut; buyer C has 100 yuan, willing to pay 6 yuan to buy a chestnut. Who gets a few chestnuts?


C bid the highest, spent 72 yuan to buy a large box, an average of 6 yuan per chestnut;

B appearance, spend 30 yuan to get a small box, the average per chestnut 5 yuan;

A There's nothing.


It's simple, isn't it? You're cajoling, there's no computer in this model that costs you. Let's look at two scenarios for real bidding:


Scenario 1: It is stipulated that the person who gets the chestnut will only pay the price that the next buyer is willing to pay, for example, C is willing to bid the highest, but actually only pay B's bid, because B's bid is the opportunity cost to sell to C. So:

C to 60 yuan to get a large box, the average per chestnut 5 yuan (negative is the price of B);

B to 18 yuan to get a small box, an average of 3 yuan per chestnut;

A There's nothing. 


Scenario 2: It is stipulated that the person who gets the chestnut should pay the average bid of the remaining buyer, for example, C actually pays 4 yuan, so:  


Scenario 1 is the GSP mode used for Google's keyword bidding, and Scenario 2 is the VCG model used by Facebook. The advantage of the VCG model is that there is no need to manually adjust prices from time to time, and that average prices are generally low. 

But the market customers are not everyone like chestnuts, everyone's price is not the same, so how to do? 


III. Different prices for different customers, how to close? - How to bid


There are always some friends in life: some people show up in front of you all day, see many times a day, but have no feeling for you - for example, sitting opposite my colleague Zhenbrother (shock brother cried, lying down and shot); The question is, today you are wearing a very beautiful brand-new dress, who should you talk to first? 

A. With the earthquake brother said: not at all effort ah, anyway, a look up to see, but see also no sense, so this 'impression' has no effect;

B. Say to the eye-catching man: it will take a little effort to hook up, but nothing but than others to get a few flattering eyes, so this 'click' also has no effect;

C. Tell a friend of Tuhao: It will take a little more effort, but once successful, it is possible to get the meal, this 'conversion' is what you want.


Let's compare the prices of these three audiences: 

So if you bid with CPC, you may be exposed to B, and CPM bidding, will be exposed to A. If the result you care about is purchase (CPV), then it's best to use oCPM (optimize the cost of a thousand presentations). What's the difference between the three? In addition to CPC is a charge per click, CPM and oCPM are charged every thousand times. The difference is that CPM optimizes the number of deliveries, so the cost per delivery is lower; OCPM optimizes delivery quality, that is, optimizes the actions that the audience does when they see the ads, so the cost of each action is lower.

 

Bidding is an effective way for you to communicate with the system. Bid way to tell the system what you care about, bid high and low tell the system how much you care if you care about brand awareness and advertising touch rate, use CPM bidding; If you care about the website conversion rate/post interaction rate/movie viewing number/program download, use OCPM.

 

The system knows what you care about, and it will run your ad to the people most likely to do this action (which, of course, is tied to your advertising purpose). Example 1. You do site click ads, cast CPC, the system will try to your ads to the most likely to click into the audience to see; 

At this point you may be in question: How does Facebook know which ethnic groups and what "behavior" will happen? We are based on real identity to log in. The system understands people's preferences and patterns of interaction with similar ads in the past, so it's very accurate in delivering to your audience - and that adds to the importance of giving the system the right instructions. For example, if you run an interactive ad for a post and use oCPM, the ad will be prioritized for the audience who is most likely to interact with the post. 


IV. How do i compare different bidding methods? - Advertising quality is evident 


Choose the right way to bid, and then the next bid is high and low. In real-time bidding (real-time bidding), many other advertisers compete for a certain audience at the same time, if a user can only see one ad in a second, the system will bid the highest ad to the user, this is known. But suppose advertisers A, B, C each use CPM, CPC, oCPM, how to compare the system? Then use the ad and its ad quality and other related factors to convert the ad is running the possible click-through rate (CTR) or conversion rate (CVR), and then convert the various bids into comparable benchmark bids, so that A, B, C can bid with the same.


Let's continue with an example:


Advertiser A out CPM $30;

Advertiser B out OF CPC $1, the system expects CTR s click/browse s 2%;

Advertiser C out oCPM, optimized purchase, bid $35 for a purchase, system estimate CTR s/browse s/browse s 2%, system estimate CVR s buy/click s 10%


So all converted to CPM, that is:

A: $30

B: $20;

C: $70.


This allows you to continue bidding on the same horizontal line. In fact, in the system, you will add and subtract relevance scores, that is, advertising quality-related scores, which will also have a big impact on you. Therefore, the quality of advertising determines the final competition with the same taiwan win or lose. 


Once we understand the infrastructure, we want to respond to some of the usual questions:

 

ISee the system suggested the bid range, has used the recommended maximum price, but the ads still can't go out:

 

The system suggests that the bidding is for reference only, is based on the audience's past average price and other factors, but just as the CTR is expected to adjust in real time, the effect of the real delivery of the ads will also make the proposed bid change. So it is still recommended that you calculate the marketable cost as the bid price.

 

Website conversion ads with OCPM, ads can not go out:

 

The above mentioned the auction type, high and low, audience group, and advertising quality will affect the ad delivery .oCPM conversion to CPM with CVR (conversion rate, online conversion rate), if the CVR is too low, the final effective bid will be pulled down, advertising will have delivery difficulties. In addition, the system will be based on the target audience's past conversion rate, as far as possible to the lowest-cost audience, 100 people may have 50 (here is just an example) frequently browsed Facebook (CPM low), 30 people often click into the ads (CPC low), and the regular online purchase (oCPM low) usually fewer people , therefore oCPM needs more target audience, in order to run a good according to the above theory, we suggest that the site conversion with oCPM advertising form, more suitable for hot goods, less suitable for high unit price, or more difficult to persuade customers to place orders online goods. If you are not sure whether to use OCPM, you can first use CPC test, see CVR reasonable, large audience, you can change the setting to oCPM, while increasing the bid, as well as setting the spending limit. Continue to see the release of normal words, you can increase the budget, accelerate the promotion if the CVR is not ideal at first, you can try to convert pixels to the next level of the web page, to see if the CVR will improve in general, or can not be separated from four basic points: . Bid method, bidding high and low, advertising quality, audience size.



The next episode we have an in-depth analysis of why advertising can't go out. Keep a close eye on it!

To read past articles, press the QR code below to the public number 'View History'.

Author's profile: Facebook's Greater China SMEs Channel Manager, based in Singapore, currently focuses on China's cross-border e-commerce market development. Having studied at Peking University and the University of Hong Kong, Hong Kong has drifted through the financial industry for 7 years, and has also drifted through the consulting industry, or believed that the technology industry is the fundamental to changing the world. Hope to use the time off from work, through the public to cross-border e-commerce to bring the inspiration of Facebook advertising, to help more high-quality Chinese brands to the world.