Facebook Pricing Models: Pros & Cons [Cheat Sheet]
| Pricing Model | Description | Pros | Cons |
CPM | Advertiser pays for every 1,000 impressions | – Effectiveness at scale and lower cost (assuming you know your audience) – Works for every audience size | Wasteful and costly if you a) don’t have a well-defined audience or b) don’t have the right creative or copy (failing to drive installs) |
OCPM | Facebook’s default model lets the Facebook algorithm optimize your goal (whether app installs or engagement) while you pay for impressions | – Easy to use (automatic) – Performs well – the larger your audience, the better the Facebook algorithm is able to optimize | – Can prove costly – Lack of transparency means inability to derive actionable insights or build your own audiences on other networks – Not suitable for small niche audiences, as Facebook won’t have enough data to work with |
CPC | Advertiser pays a predetermined price every time a user clicks on an ad | Good for more traditional marketing (like generating leads rather than installs), driving users to a landing page, and brand promotion | Not a good fit for performance campaigns |
CPA | Advertiser pays a predetermined price for a predefined action (i.e. app open, in-app purchase) | – Advertiser given most control – Performance-oriented – Risk free | – Can be difficult to scale. Facebook will show ads only to users who they determine are likely to take the desired action – Can’t run CPA campaigns from day 1, as its engine needs time to learn |
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