Facebook to Offer CPA Advertising?Written by Pace Lattin
December 19, 2011 # 8:50 pm # Industry News # 3 Comments
Despite Facebook’s obvious dislike for performance based marketers and affiliates, it seems that Facebook is playing with the idea of some sort of cost per action ability. The purpose, according to Facebook is to determine the interest from advertisers for having action-optimize campaigns. However, this could also be a part of their already secret facebook conversion tracking system that is only available for select advertisers
This unfortunately, despite the hoopla, is not a true CPA advertising mechanism, and is only an optimization of things like “Likes” and despite being called an action, is really just like a click – albeit a different type of click. Still, this could be a lead-in to looking at other CPA based campaigns in the future, as Facebook looks to continue growing their revenue.
Inside Facebook had really interesting comments about this:
Across the industry, advertisers are moving away from CPM models that do not ensure that consumers are truly seeing their ads. Cost-per-conversion, action or engagement are much more desirable because companies do not have to pay unless an ad is effective. In fact, some third-party ad providers that use Facebook’s API, such as AdParlor, charge and optimize for cost-per-fan or cost-per-install as opposed to the CPM or CPC options in Marketplace.
Facebook could provide something similar in the future to emphasize its strength in getting users to connect with pages or engage with Sponsored Stories. However, Facebook will need to consider how this sort of change would affect developers working with the ads API, which was brought out of private beta in August. It is possible that third-parties who sell on cost-per-action models could lose that advantage over Marketplace, but it is likely their ability to run large-scale tests to optimize creative will still make third-party vendors an attractive option for some.