Facebook To Roll Out ‘Pay-Per-Engagement’ Ad Model: An End Of CPC ?

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From last couple of months Facebook is on launch spree of various features to attract more advertisers. Maintaining the trend, today, it has  reported that company is running several tests on its Ad platform. The new test is in association with German Facebook Tab developer “247 Grad”. Under the new test, Facebook will charge advertisers on the basis of pay-per-engagement. Which means now advertisers can pay according to engagement rate with their Ads.

Facebook clarifies that per engagement includes ‘Liking a page’ or ‘Installation of any App’ where users take some concrete action towards the ad. This can also be considered an extension of CPC (Cost per Click) model.

“We will try to get as many people to like your page or install your app given your budget, by delivering the ad to those people most likely to take action. You will be charged each time your ad is viewed. Please choose this option only for ads for pages and apps on Facebook,” as said by 247 Grad.

Interestingly, in last one week it’s the second test which Facebook is conducting for advertisers. Company is also testing a feature to offer discount coupons to users via advertisements.

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However, Facebook has said that the test was conducted exclusively to allow marketers to designate that they are interested in organizing campaigns and advertisement on Facebook pages. This unswervingly indicates that Facebook is testing such skin textures to ensnare more advertisers. In current ad revenue model, Facebook is collecting payment on the basis of per-impression basis not on action basis.

Facebook is having a deep look at marketers’ as well as advertisers’ response as company want to pre-ensure the success of such feature – especially when company’s IPO is around the corner. If advertisers are satisfied then it will bring this particular test into action.The success of such test will also ensure revenue boost for the company which would indirect help upcoming IPO.

Personally, I think if such tests come into action then it might be possible that users will have to pay heavy plum in Facebook accounts. But, from other point of view, it’s really a good initiative since many advertisements are not being viewed by users but advertisers need to cough-up the cost. Also, addition of new features in advertisement field will definitely benefit advertisers since they will get a better return on their investments and will be charges only when any user will take some concrete action on his ad.

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