If you ever use Facebook Ads for your business, you’ve more than likely calculated a “cost per like” average every time you’ve paid for an ad to determine how much you’re actually spending to get new likes. While the phrase has a nice ring to it, it’s not an official term Facebook acknowledges.
How can you use the unofficial calculation to your advantage, and how can knowing that information benefit you as a business? And are the cost of a like and the value the same thing?
First off there’s a simple way most people think of this: you pay for an ad, you spend a certain amount of money over the course of time promoting certain posts, showing up in people’s feeds, and marketing yourself in the side bar. Once that budget is spent, the amount of likes you got from that campaign, in relation to the amount of money you spent to get those likes, determines how successful the campaign was. Right?
As of now, Facebook has three ways to calculate your campaign’s value/success. There’s cost per thousand impressions (CPM) for starters, when advertisers can bid on a targeted group of users and will be charged any time the advertisements are seen by a thousand users.
Then there’s cost per click (CPC), meaning that advertisers will pay any time an advertisement is clicked on. This still won’t guarantee any action after the click. The only guarantee will be that an ad is seen, and/or your page is seen.
Earlier in April, Facebook also released a new metric to us for calculating advertising efforts: cost per action (CPA), which will allow advertisers to pay for more than just impressions or click-throughs. Instead, businesses will be able to pay for the specific actions they’re looking for.
Say your new business is trying to build likes for a fan page in order to gain more visibility and presence. If you’re willing to pay a dollar per like, you can specify that. As a result, you will only be charged if a user “likes” your page. The drawback of the CPA route is that it is only available currently through Facebook’s Ads API, so you won’t be able to do it through the Ads Manager or Power Editor yet. Yet.
Let’s step back for a second, though. Even if you can kind of calculate the “cost per like,” what exactly is the value per like? It’s obviously a subjective calculation, and one there is no real “right” answer for.
Evaluate your client and fan base and figure out what works for you.The bigger your social following, the further your reach; however, plenty of brands do really well with a small but zealous following. That’s why “actions” are such a vital metric: if they didn’t like your page yet, were they viewing photos? Commenting? Liking other posts?
It’s like the Internet’s beloved Wil Wheaton says about being a nerd (which totally translates to being a fan of anything): “it’s not what you love, it’s how you love it.”
Regardless of the number of fans you have: are the fans you have engaged/committed/enthusiastic? Because that is where a fan’s value comes from, and the cost of earning a life-long fan isn’t something you can really calculate.
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