Facebook’s optimization algorithm has greater potential for optimal advertising performance when it has either a broader audience or broad placement options. In the case of the desktop or mobile news feeds, advertisers can either target multiple ad placements at once and let Facebook optimize how the ads are placed, or specify the exact placements that they want. Facebook’s native ad optimization for media cost is called oCPM (optimized cost per mille/thousand impressions) 

oCPM is Facebook’s preferred system for buying ads, and it allows you to specify your campaign objective over four campaign goals: actions, clicks, reach, and impressions. In Facebook Power Editor it is often called “Optimize For”. 

Comparing the media costs and ad engagement rates of targeting the desktop and mobile feeds jointly utilizing Facebook optimization versus targeting each device segment individually, the results were very clear across all geographies. CPM and CPC are both significantly lower when targeting both placements together rathan than either separately, and the CTR is higher. For example, ads bought in USD had a $0.12 CPC for the combined placement, versus $0.28 for mobile feed and $0.71 for desktop feed in Q3 2014.

oCPM works because Facebook has more flexibility in choosing who to target and how much to bid. Facebook uses its proprietary data to optimize your bids and reduce your total costs. It alone has access to real-time impression-level data and can make bidding decisions on level in a manner similar to real time bidding (RTB) for display ads. They use this data to serve impressions to users most likely to take your desired action. No advertiser has access to that information or can use it to optimize ads because it’s not in the Ads API or available in either Power Editor or any partner’s tool.

We look forward to an exciting year ahead for advertisers in 2015 and look forward to bringing you more insights from the social advertising world throughout the year including a detailed look back at the all important Q4 in advertising.

The Social.com Advertising Benchmark report is here! You can download the full report here.