Facebook Ads is a performance-based advertising platform that leverages demographic and social connection data to enable micro-targeted advertising at-scale. Facebook Ads allow advertisers to use incredibly rich user data to target ads, enabling advertisers to target very specific segments of people with a high degree of accuracy. Whereas traditional media companies only have broad demographic data, Facebook has, on an individual user basis, data on specific connections to and interactions with friends, companies and brands.
Fundamentals of a Performance-Based System: CPC and CTR
Before we start getting into different types of ads and where they are displayed, it’s important to first understand the fundamentals of performance-based advertising, where advertisers place bids to have their ads displayed. Understanding how Facebook charges advertisers is essential to optimizing the performance of your ads. Let’s start with the basics: