Are Facebook quoting different prices for the same ad based on your profile? Guest contributor Desi Velikova thinks so. In a cross-post from her own blog, she writes how the same ad campaign would have cost her employer 8 times more depending on which user account it was purchased from.
A month ago I needed to set up a Facebook Ad Campaign for web agency eGorilla. We agreed on a budget of $15 per day and the plan was to run it as follows:
- 1st week CPM (pay by traffic)
- 2nd week CPC (pay per click) with the same target parameters
- 3rd week Promoted Post (with specific promotion)
- 4th week – whatever worked best from the previous weeks.
The bid price I set up for 1000 impressions was $0.25, which was a bit higher than the recommended bid. So far, so good. The first week we generated a click-through rate of 0.005% which was far from great, but considering the essence of the business (web design), we didn’t expect it to be much higher. For us, even a single website order from the 4 campaigns would be success.
Then the second week came, and when I had to run the CPC campaign, I noticed that the price I was given for a click was much higher than the previous week.
It was around $7 – but in the previous week it had been around $1.
We were in a rush to run the new campaign and I didn’t stop to think twice. I discussed it with my teammates and we all agreed that we should run the CPM campaign again instead, because with this quote we would be entitled to only 2 clicks per day, while with the CPM we were getting around 10 daily.
Considering the bad CTR there was nothing to lose: CPM for us was still better. So we changed our initial plan and decided to postpone the CPC campaign until our third week.
When the third week came I checked the bid prices for a click: they were now around $8.
I was suspicious, because I could not imagine how the price could jump by 800% in just over a week.
So, along with one of my teammates, we decided to check it out from his Facebook account. We sat side by side and started setting up the parameters for our Facebook ad (Check the screen shots below).
We chose exactly the same URL, image, copy, target options. Everything was 100% identical.
When we checked the suggested bid, I was offered $8.43 – $17.68 per click, while he was quoted £0.44 – £1.06.
To put those figures into context: at the lower end $8.43 (around £5.19 at today’s exchange rate) is more than 11 times £0.44. At the higher end, $17.68 (around £10.88) is over 10 times £1.06.
Why the difference? The first theory we came up with was that Facebook was quoting me this price based on the performance of my ad so far.
Facebook’s algorithm knew that the CTR this ad achieved last time was not brilliant, so perhaps it assumed that it would have the same performance. To justify the impressions, they might have given me a much higher price for clicks.
And because my mate hadn’t run this ad from his account before, he might have got a much lower price.
This didn’t appear particularly fair, considering that they have a clear algorithm for CPC campaigns, but it still made some sense: had Facebook decided that my ad was a “bad ad” and that I had to pay much more than other people?
We decided to test this theory. The test disproved the ‘bad ad’ theory.
We set up a completely new CPC campaign for another website, with different url, image, etc.
And again, I was given 8 times higher price than my colleague.
My suggested bid was $7.40 – $17.87, while his was £0.47 – £1.14.
Apparently the problem is not a “bad ad” only, but a “bad profile”.
For some reason Facebook has decided to charge me more, whatever campaign I want to run on their website. I am a “bad profile”, or a “rich profile”, or a “mugged profile”.
Every marketer can imagine what a disaster this is for an online professional, considering that I needed to run a couple of campaigns for clients and I was always given consistently higher prices than people around me.
I have a couple of questions here: Can we trust Facebook Advertising? How reliable is the data coming from Facebook? And most importantly – how many people have already been charged in this way?
Since then, I have sent Facebook 3 emails to ask for an explanation without response. I will update this post if they do reply.
Screenshots
Facebook Ad Campaign for eGorilla:
This one is from my profile:
This one is from my mate’s profile:
- Absolutely same campaign parameters from another Facebook profile
New Facebook Ad Campaign for MyBeachWedding.co.uk
This one is from my profile:
This one is from my mate’s profile:
- The same Facebook Ad Campaign from another profile
If anyone has experienced the same issue, please let me know.
*Disclosure: Desi is a graduate of my MA in Online Journalism at Birmingham City University.
Online Journalism Blog 
The facebook price suggestion feature is know to be terribly shonky. Did you try running both sets of ads at the same price and see if it let you run?
I generally pay 0.70 to 0.90 cents for US traffic and tend to ignore whatever Facebook suggests (although it never really suggests a max above $3)
What you describe above is exactly how Google do it on their ad platform. If your account or even parts of your account perform badly, it can poison future ad campaigns that you run (but he converse is also true, good past performance can positively influence future campaigns). In some cases it it better to start with a fresh Google ad campaign than try resurrect a poisoned account
If you would like to do some interesting Facebook ad testing, you might want to check out http://www.qwaya.com/ which is a very cheap multivariate facebook ad testing platform. (Ill be sharing some of my data over the coming months, ill try remember to post it here)
Stephen
Hi Stephen,
Thanks for your comment. I’ve just tried and set up a campaign with a CPC price similar to the one suggested to the other profile (the “cheaper” one) and I’m waiting for an authorisation. It’s interesting to see whether they’re going to approve it. And still, it’s shockingly manipulative that they’re suggesting such different bid prices to different accounts. Because in this case, we don’t talk about the same ad only, but for a brand new ad campaign (me second example).
Thanks for recommending Qwaya! I will be checking out http://firstconversion.com/ for updates.
p.s. And my ad, with the cheaper bid, was not approved…
I just tried to place that egorilla ad and got quoted £0.33 – £0.97.
At least my account is apparently one in good standing?
Yes, that’s the lowest price I’ve seen so far 🙂
I wonder what the magic criteria is, then?
My account history has involved placing highly targeted, short-run, per-click adverts, all on behalf of a single company for a period of two years (and a handful of promoted posts more recently.) Due to the nature of the ads I’m highly unlikely to have had any of them flagged by users as inappropriately targeted/misleading/offensive/etc. which I imagine is a greater risk for an account placing ads for large target groups on behalf of multiple external organisations.
The account itself is about eight years old, has about 400 active accounts befriended and interacts regularly with maybe 50 of those. It manages five groups and three pages, only one of which is especially active. It’s also a Developer account responsible for creating three Facebook apps. (Although that seems a ridiculously grand title for what was actually just a few Javascript quizzes in an iFrame.)
How does that stack up to the ones you were using for your test. Or, for that matter, to anybody else who’d like to play along at home and try placing the advert…
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Hi Clare,
Thanks for your detailed comment. As I’ve already mentioned a couple of times, I don’t have a clue what their real algorithm for the ad prices is. It’s bizarre and irrational to me, especially after I tried to run a campaign from a 3rd profile (a fake one, not the 2 mentioned in the post) and the price was different again (a bit higher than my friend’s one, but still considerably lower than mine).
My personal profile has around 5 pages (one of them is the official page of a really big brand which I’m administrating), it has almost 500 friends and I’ve set up a couple of application in the past, as well. So, let’s say, I’m an active, average Facebook user, which apparently uses it for business purposes. I don’t have a clue what the algorithm behind their suggested bid was. That’s why I asked them for an explanation and I never got back a reply, considering the fact that they were really speedy a couple of weeks ago, when I was setting up the 1st campaign.
i’m pissed off. i paid a 5 USD add on a pot of mine, and when i go to my Paypal they actually charged me more than 9 USD.
It sounds like youre are comparing CPC bid ranges to CPM bid ranges.. CPC is naturally higher.. That’s normal.. Now if your suggested CPM bid increased, it was probably due to the horrible performance of your ads. Account history plays a role in how much facebook charges you.
Actually, it sounds like you dont really understand the difference between CPC and CPM. If your paying $0.25 per CPM with a CTR of 0.005, you are effectively paying $5 per click.. Im guessing, if you bid $7 CPC, you actually cost per click would be lower than $5. Facebook, delivers you ads to users more likely to click ads when you bid CPC, so your CTR would probably have increase. Which may have resulted in facebook lowering your bid. When you bid CPC you pay not more than your bid for each click (possibly less). When you bid CPC, your bidding for ad views.. Therefore a CTR of 0.10, would result in you paying what you bid for each click, as your CTR drops below 0.10, your actual cost per click increases exponentially. A CTR of 0.005 is effectively 1 click for every 20,000 impressions.. Your paying your bid 20 times for one click.
Just noticed that your friends prices are quoted in British pounds.. Perhaps facebook, is just mugging Americans. I would be interested in seeing a side by side comparison with another USA account. The bid prices on my own account have doubled, over the last two months. Facebook created a new account for me, and the new account had the same high suggested bids.. So, unless the bad profile affect followed my credit card, the prices for Americans have went up drastically.
Very intriguing article. I have never heard of such a problem with Facebook ads. After reading through the article, my assumption would be that the price difference is made from the previous ad experience that profile had before. I would be interested in reading more about what happened when two totally new profiles were made with identical information. How are these prices determined if everything is exactly the same? I would be curious for a second post on a response from Facebook. Thanks for this interesting experiment.
Check out similar information on my blog at http://nataliebsnyder.wordpress.com/ or email me at nsnyder2@mix.wvu.edu.
Did you ever figure out the answer to this or how to fix it? I am experience this same thing. I have an old account, been on hiatus for a year. When I try to start campaigns my suggested bid ranges are extremely high and when I tried bidding above the range, the ad was flagged as having a low bid.