There used to only be two options for Facebook advertisers: Pay for clicks or pay for impressions. Pay Per Click campaigns are favored by advertisers; Pay Per Impression by Facebook.
But now, Facebook has thought of the ultimate pricing option: "Just trust us to be fair with your budget."
They call it "Optimized CPM". It is now the default option for all Facebook ads. Essentially, the advertiser no longer has control of what Facebook will decide to charge them for views. Some Facebook advertisers have seen CPM rates as high as $330 when using the "optimized" option.
With new and inexperienced advertisers signing up for Facebook ads everyday, many are paying these ridiculously inflated prices because they don't know any better.
There is little doubt in my mind that Facebook will be reporting dramatically improved performance in terms of revenue, growth and engagement come October 23rd and after.
- Alex Marshi
Founder of Expert Online Advertising
I don't own shares in FB.