The 0.1% Rule
There are two ways you can pay for ads on Facebook: pay per click or pay per thousand ad impressions. Pay per click is paying a fixed rate you agree to with Facebook when you create each ad and you pay it every time someone clicks your ad. Often you’ll pay less than your bid for a click, depending on the competition with other ads and their click bids that also seek your target prospects when your ad is clicked.
An ad impression is your ad appearing once on one of your target prospect’s screens. If you run ad campaigns for a few days with either payment method Facebook keeps track of your Click Through Rate (CTR) regardless of what payment method you use.
If you find over time your Click Through Rate is 0.1% then that means for every 1000 times your ad appears one person has clicked it once on average. So if you had paid 50 cents per click it would have cost the same as paying 50 cents for 1000 impressions. So the amount you pay per click when you have a 0.1% average Click Through Rate is the same as what you’d pay for 1000 impressions.
Now let’s say your Click Through Rate is 0.2%. That means you got 2 clicks on average for every 1000 times your ad appeared on screens. If you had paid 50 cents per click you would have paid $1, whereas if you’d paid 50 cents per thousand impressions then you’d have only paid 50 cents. So with a 0.2% average Click Through Rate it would be cheaper to pay per thousand impressions than paying per click.
But say your Click Through Rate was 0.05%. That means you got 1 click for every 2000 impressions on average. If you had paid 50 cents per click you would have paid 50 cents for this campaign, whereas if you’d paid 50 cents per thousand impressions then you’d have paid $1 for this campaign. So with a 0.05% average Click Through Rate it would be cheaper to pay per click than paying per thousand impressions.