The word oCPM is getting thrown around a lot these days, but few understand the actual meaning – or rather – the implications of what this stands for and how to leverage it in campaigns.

For those of you who haven’t come across the terms before:

oCPM: optimised cost per thousand miles/impressions

CPM: cost per thousand impressions

oCPM vs CPM – THE SIMPLE EXPLANATION

Facebook can either choose to optimise ads for impressions (CPM) or optimise for a specific action.

Here’s how it works in practice: Facebook KNOWS that certain people in your audience will be more likely to perform on action over another.  This includes retargeting/warm audiences.

It knows this because it’s reading your emails, it’s following your online searches and behaviours, it’s seeing all your content and interactions through Facebook, it’s even listening to your actual conversation via Messenger! 

It has a lot of data on you.

It knows if you are in the Consideration phase of a marketing funnel, or the Acquisition phase – it knows the difference between you wanting to book a trip overseas and just looking for trips overseas or if you’re just an avid travel content junkie.

The easiest way to think of this is to compare it to Google Adwords. Google allows you to run display ads (blanket marketing) or to target people based on search (people in the consideration phase of the funnel)* (big props to Tom Hiscocks for this analogy!)

…Think of it like this 

Facebook is pretty much the same – it can feed your ad out to replicate a blanket display marketing approach OR show your ad to those most likely to perform action (search).  The latter is part of the algorithm called Expected Action.

The main difference here is that – unlike Google where you need to run one or the other (Search or Display), Facebook will switch between the two automatically and can also be controlled manually by you.

CPM is therefore blanket marketing – Facebook will try and get the best CPM (cost per thousand impressions).

oCPM is leveraging Facebook’s data brain to optimise your campaigns for an action you want.  The CPM will typically be more expensive here, however, results for that specific action will typically be more effective.

How do I Know If I’m Using oCPM?  

With the exception of Brand Awareness and Reach campaigns – every campaign objective has the ability to use oCPM.

The above illustrated the campaign objectives that allow for optimised cost per mile (oCPM).

When you are using one of these objectives – at your ad set level, you can select between CPM and oCPM by selecting the conversion event or link clicks.

oCPM = Link Clicks or Conversion ad set delivery optimisation 

CPM = impression or reach ad set delivery optimisation 

 

oCPM vs CPM – WHICH ONE SHOULD I CHOOSE? 

Facebook recommends that you use oCPM where possible.  While your CPM will typically be more expensive here, your results will be improved.

However, below is a general graph/guideline on the strategic application of oCPM vs CPM.

Using CPM is typically done in situations where: 

• Your ads are stalling (i.e: you are losing in the auction process)
• You need mass awareness/reach – popular with brands
• You’re CPM is costing you way too much (again: you’re losing in auction process – read more on why here)

In the above, you’ll notice that Link Clicks is also counted as oCPM – this is because it’s still optimising for a specific action (Link Clicks).

oCPM vs CPM – FINAL NOTE  

oCPM simply means bidding for an OPTIMISED ACTION on Facebook.  It’s using Facebook data to improve our results.  CPM simply means bidding for impressions.

Got any questions of oCPM vs CPM?  Pop ’em below of joining me in the Facebook ad Hacks group.