Why does Facebook remarketing cost more than regular ads?

I tried looking for an answer on Google and to my big surprise, I couldn't find a single article that could answer this relatively simple question.

To my knowledge, Facebook sets the CPC on your ads based on the market. Meaning that if there are a lot of people bidding a lot of money on the same audience that I am bidding on, my CPC will be higher (if set on automatic). Following that logic, if I collect a remarketing pixel on 10 000 people that have clicked on my ads on Facebook at $0.50 per click, shouldn't my remarketing CPC by around the same amount for that same audience?

So far, remarketing on Facebook to past website visitors (90% of which came from a Facebook ad campaign) has a CPC almost double my ad campaign CPC.

If CPC is calculated based on the "market" and the other bids on the audience that I'm targeting, why is my CPC on remarketing so much higher than an ad campaign running alongside, for the same audience?

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8

Hi Konstantin, I agree with David. If you're asking for the rationale, think of it as you would your business. You likely have tiers of products/services, priced accordingly - based on value to client, time and expertise and other factors. We can forget that Facebook is a business. There's a risk to them going after your market again. The thinking is "just in case".

You may be remarketing because that target group responded well (& Facebook should know that), but just in case some of those group targets were unhappy, the risk of Facebook being attacked for showing content they already said No to is high. We, the business doing the remarketing bear that cost. Does this make sense (even if it is upsetting)? Hope it helps a bit, anyway.

Hi Crystal-Marie,

Thanks for your answer, everything you wrote about the risk to Facebook makes perfect sense (although it's pretty upsetting). Although it makes sense, I wasn't able to confirm this theory on any official Facebook communications nor have I seen any articles explaining it this way. I don't mean to undermine your theory but how sure are you about this?

In any case, I guess that the answer doesn't really matter. Remarketing ads drive much more value than traditional ads for a number of reasons. But at the end of the day, what really counts is the CAC and the lifetime value of these clients. I'm just curious whether Facebook literally charges us more for remarketing because they know that these ads have more value to us or if there's another reason we're paying big bucks for remarketing.

True, Konstantin. (Apologies for the late reply). I won't say I can actually prove it. It's just how other marketing services work in general, and so that would be my best guess. For Facebook, and any business, there will always likely be more than just one reason or factor driving what we pay for ads.

5

Konstantin,

Your remarketed ads could definitely cost more. The good news is that these are a higher engaged market so they are also worth more. Following the training that our team has received over the years, the idea is to narrow audiences down after having them filtered down by clicking on 1 or 2 or 3 etc... pieces of content and then bid a high amount for a daily unique reach for your offer to this smaller audience. So you might be paying more per click, but the value of what you are getting is WAY better.

Hope this helps.

Thx,

Dave

2

Hi Konstantin, as far as I know, remarketing ads should cost less than the regular ads because there's no competition. Do you think running 2 campaigns with same targeting is the reason?

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What is Facebook Remarketing?

Facebook remarketing works similar to Google AdWords remarketing, but rather than showing your ads across websites within the Display Network, your ads are shown on Facebook. Facebook also more commonly refers to remarketing as “Custom Audiences.” The concept is the same: someone visits your site or interacts with your brand, they’re tagged with a code you implement to track them, and then while they’re scrolling through their Facebook feed your ad pops up to remind them what they’re missing.

Facebook remarketing funny image saying "don't you forget about me."

But there are actually a few different flavors of Facebook remarketing, including customer lists, website traffic, and app activity. you can get the full detail at https://www.amazon.com/Soufull-Japanese-Stainless-Professional-Ergonomic/dp/B01M656OBW.

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0

It boils down to market economics. Supply and demand, as well as plain old greed. What does it cost for either the original ppc or the remarket?

Anonymous User
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Because they use clickfarms to make it look more effective. A clickfarm is a bit like a sweatshop where underpriveledged folks sit and click like on the articles and ads that have paid for premium ad service, not only does it give false impressions to customers it can actually ruin your metrics, But Facebook has pretty much always been evil I think.

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