On Wednesday the folks at Facebook announced that they have modified the way they calculate cost per click. It’s part of their new marketing API. From now on, Cost-Per-Click (CPC) will no longer be measured as likes and shares, but measured as link clicks to websites and apps. Bottom line: advertisers will no longer have to pay for likes, shares or comments.

The New CPC?

Cost of the Click will shift from engagement only ‘likes’ and ‘shares’ to a specific ad objective. Some examples of the new CPC include:

• Clicks to visit another website
• Call-to-action clicks that go to another website (i.e., “Shop Now”)
• Clicks to install an app
• Clicks to Facebook canvas apps
• Clicks to view a video on another website

The new definition serves ad objectives that Facebook believes are more closely aligned with the business objectives of advertisers.

What Does This Mean?

With the new CPC calculation in play advertisers are likely to enjoy a better ROI on their ad spends, because the outcome of driving traffic to their website will yield greater value. As certain campaign reporting metrics related to clicks change advertisers will have to bear a higher cost per clicks. But in the long run marketers will end up paying only for valuable clicks.

“If you think back, a lot of advertisers thought of Facebook only as a social platform and were strictly engagement focused,” Richard Sim, Facebook’s head of ads product marketing, told Marketing Land. “Over the past few years we’ve really been focused on driving business results. The transition to clicks being only link clicks is a big step in this transition.”

What Happens to Likes, Comments and Shares?

Advertisers will still be able to bid for the engagement clicks (including Likes, Comments and Shares) but under the new CPC definition this will not be tracked. A high number of engagement clicks will continue to be an indicator of valuable and engaging content.

What Next?

According to Facebook, it could be one of three things:

• If you buy Ads through a Facebook interface (like Ads Manager or Power Editor), sit tight and wait for the changes to be rolled out in the interface
• If you buy through a Facebook Marketing Partner, find out how they intend to implement these changes
• If you buy through the API, you can begin buying ads with the updated CPC starting July 8, 2015 in v2.4 of the Ads API. If need be, you can continue using the existing CPC definition through October 7.  But after that date, only the updated CPC will be available

Is this the beginning of the end for Cost Per Engagement model? Let us know what you think about this change?