Posted on August 26, 2011 ยท Posted in PPC

I recently went to activate an old Facebook campaign that was set to CPC bidding when I noticed that the suggested bid was now $5.40 when it had been around $1.20. I thought it might be something related to that particular campaign’s performance but then I went to create a new campaign earlier today and the suggested bid was $9.67 – $12.24! The ads were going to an external URL but suggested bids for ads pointing to Facebook Pages are noticeably higher as well.

What happened to the days when Facebook advertising was ridiculously cheap? There are three components:

1) The company put its pricing in line with it’s competitors
2) There are more companies bidding on the same ad space and the company wants to avoid showing ads for lower bidders
3) If the company does plan to go public, they need to show the best possible revenue figures before their IPO

CPM ads are still cheap and if you can produce one with a high CTR then you can still enjoy cheap traffic but unless you are confident in generating a conversion you should really stay away from their CPC model.