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Facebook is changing how advertisers get charged

Facebook is updating how it charges advertisers for click-based campaigns on the social network in an effort to ensure brands are getting what they pay for — and not simply social cachet.

The update, which is part of Facebook’s latest API release, will change to definition of a cost per click (CPC) to only include clicks to websites and apps. ‘Likes,’ shares and comments will no longer count as CPCs, which previously had all been additional charges to advertisers.

“Advertisers come to Facebook to drive business goals, like in-store traffic and website clicks, and they need to know how effective their ads are at driving their stated goal,” the company wrote on its blog. “This update is intended to help advertisers better understand how their ads perform.”

The new CPC charge will only account for “link clicks,” i.e. those clicks related to ad objectives, including clicks to visit another website, call-to-action clicks to go to another website, clicks to install an app, clicks to Facebook canvas apps and clicks to view a video on another site.

The move is intended to help advertisers better tailor their Facebook (FB) ads by comparing measurements that more closely align with how they’re already bidding, thus optimizing the types of ads they place on the social site.

Advertisers who care about about link clicks will likely see a better return on advertising spend with this new setup, since they’ll be paying for the most valuable outcome, not for social cachet that comes from ‘Likes’ and comments, which may not lead to a link click. However, the reverse side of that is that companies will likely see an increase in CPCs since there will be less (but potentially more valuable) overall clicks.

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