If you're running Facebook ads, you probably already know that a high Cost Per Thousand (CPM) can eat into your campaign budget quickly. A high CPM means that your ad is being shown to people who are not interested in it, which lowers your click-through rate (CTR), drives up your cost, and ultimately reduces your ROI.
Luckily, there are a few things you can do to lower your Facebook Ads CPM, and most of them are not overly complicated either.
But before you can start lowering your CPM, you need to understand what it is and how it's calculated. Only then can you take the necessary steps to bring it down.
In this article, we'll talk about what CPM on Facebook is, how to find it in your Facebook ad account, plus some of the most common reasons behind a high CPM. Finally, we're also sharing our top advice on how to lower your CPM and improve your Facebook advertising campaigns.
Let’s get started!
What is Facebook ad CPM?
Facebook Ad CPM is the cost per 1,000 impressions your ad receives. In other words, this metric measures how much you're paying, on average, for every 1,000 views of your ad. Keep in mind that an impression only counts if someone sees your ad; it doesn't count if they merely scroll past it.
Importance of Facebook ad CPM?
CPM for Facebook ads is only one of the many metrics you should be tracking when it comes to your ad campaigns, but it's one of the most important.
It offers valuable insights into various parts of your paid social strategy, including the strengths, weaknesses, and opportunities of your ad campaigns, helping you make better-informed decisions that can result in a lower CPM.
Here are some reasons why monitoring your Facebook ads CPM matters:
1. Your CPM can tell you if your ad is being seen by the right people
If your target audience is women aged 25 to 34, but your ad is being seen mostly by men aged 55+, then your CPM will be higher than it should be. That's because you're paying to show your ad to people who are less likely to be interested in what you're selling.
In this case, your Facebook ad CPM will serve as a warning sign that you need to revisit your targeting options.
2. Your CPM can tell you if your Facebook ad is facing too much competition
If other advertisers are bidding on the same audiences as you, then your ad will have to compete for space on the page. The more competition there is, the higher your CPM will naturally be.
By monitoring your CPM, you can get a sense of how much competition there is for the keywords you're bidding on. It can also alert you to trends in your niche or industry – if you see a sudden spike in your CPM, it could be because a new competitor has entered the market or because there's more interest in your niche than usual.
3. Your CPM can tell you if your ad copy is effective
If people are seeing your ad but not clicking on it, then that's a sign that something about your ad copy isn't working. Maybe it's not relevant to what they're looking for, or maybe it's not creative enough to stand out from the other ads on the page.
Whatever the reason, tracking your CPM can help you troubleshoot problems with your ad copy so that you can improve your click-through rate (CTR), a metric that's closely related to CPM.
4. Your CPM can tell you if people are finding something wrong with your ads
Sometimes, a high CPM can be caused by technical issues with your Facebook ad, like a broken link or a low-quality image. If people see your ad and then quickly leave your landing page, that sends a signal to Facebook that your ad is not relevant or useful, which can lead to a higher CPM.
5. Your CPM can tell you if people are losing interest in your product or service
If you've been running ads for a while and your CPM is slowly creeping up, you need to pay attention ASAP. This could be a sign that people are becoming less interested in what you're selling, which means it's time to freshen up your ad copy or switch to a new target audience.
How to calculate CPM
Calculating your Facebook ad CPM is quick and easy. All you need is your ad spend and the number of impressions your ad received.
Here's the formula: CPM = (total ad spend / impressions) * 1000
For example, if you spent $1000 on an ad campaign that received 5000 impressions, your CPM would be $200, or 1000 * (1000/5000).
How to find CPM in Facebook Ads Manager
Finding your CPM rate in Facebook Ads Manager is just as straightforward. To get started, simply follow these steps below:
- First, go to your Ads Manager account and log in.
- Next, open the "Ads" tab by clicking on the Ads option in the top right-hand corner.
- After that, click on the column drop-down menu and select "Performance and Clicks."
- Then, Find the "CPM (Cost per 1,000 impressions)" metric and note the number.
- That's your CPM rate.
Note that you can manipulate the date range over which your CPM is calculated by changing the "Date" options at the top of the page. This can be helpful if you want to compare your CPM rate over time or see how it's changed since you made a particular change to your ad campaign.
You can also segment your CPM data by ad set, ad, campaign, or delivery method by using the options on the left-hand side of the page. This can be great if you want to see which of your ad campaigns has the highest or lowest CPM rate.
Tips to lower Facebook ads CPM
Now that you know how to calculate and interpret your CPM rate, it's time to start thinking about ways to lower it. Here are a few tips to keep in mind:
1. Improve the relevance score of your Facebook ads
The first step to lowering your CPM is to improve the relevance score of your Facebook ads. The relevance score is a measure of how relevant your ad is to your target audience, and it ranges from 1 to 10.
The higher your relevance score, the lower your CPM will be because your ad is more likely to be shown to people who are interested in what you're selling.
2. Optimize audience targeting using Facebook ad tools
Facebook Ad Manager offers a variety of tools that you can use to target your ads more effectively.
For example, the "Detailed Targeting" tool allows you to target people based on interests, demographics, and behaviors. The "Lookalike Audiences" tool allows you to target people who are similar to your current customers. Finally, "Custom Audiences" will enable you to target people who have already interacted with your business in some way.
You can also use data from other aspects of your digital marketing campaign to refine your Facebook ad audience. For example, if you have a list of email subscribers, you can upload that list to Facebook and target those people with your ads.
3. Retarget your Facebook ads to "warm" visitors
Retargeting is a form of online advertising that allows you to target people who have already visited your website or interacted with your business in some way. These people are considered "warm" because they already have some level of awareness about your product or service.
Retargeting can be an effective way to lower your CPM because you're targeting people who've already demonstrated an interest in what you're selling.
There are a few different ways to retarget your Facebook ads. One is to install the Facebook pixel on your website and create a "custom audience" of people who have visited your site. Another is to target people who have taken a specific action on your website, such as filling out a form or adding an item to their shopping cart.
4. Use Facebook ad delivery optimization
Facebook offers a variety of delivery optimization options that you can use to control how your ads are delivered. These options include "reach," "clicks," and "conversions."
"Reach" optimization delivers your ad to the maximum number of people in your target audience. "Clicks" optimization delivers your ad to the people in your target audience who are most likely to click on it. Meanwhile, "conversions" optimization delivers your ad to the people in your target audience who are most likely to convert, such as by making a purchase or signing up for a newsletter.
You can use delivery optimization to lower your CPM by choosing the optimization option that is most likely to result in the desired action.
5. Monitor the frequency of your Facebook ads
The frequency of an ad is the number of times someone sees it over a period of time.
If someone sees an ad too many times, they will become "ad blind" and will stop paying attention to it altogether. On the other hand, if they don't see an ad enough times, they may forget about your brand completely.
How does this lead to a high CPM? If people become ad blind, they are less likely to take the desired action, such as clicking on your ad or making a purchase. In turn, this will lower your relevance score and increase your CPM.
6. Present compelling Facebook advertisements
Facebook users are bombarded by ads every day, so it's important to make yours stand out in their newsfeed.
There are a few ways to do this. Here are some of them:
- Use high-quality images or videos in your ads. People are more likely to pay attention to ads with visuals that are compelling and eye-catching.
- Use persuasive copy in your ads. Your ad copy should be clear, concise, and persuasive. It should also include a call-to-action that tells people what you want them to do, such as "click here to learn more."
- Use an attention-grabbing headline. Your Facebook headline should be short, sweet, and to the point. It should also be relevant to the rest of your ad and capture people's attention so that they want to read more.
It's also a good idea to get feedback from other people on your ads before you publish them. On top of that, you can also try checking out what your competition is doing and see if there's anything you can learn from their ads.
7. Include social proof in your Facebook advertisements
Social proof is a powerful influence on people's buying decisions. So, if you can include social proof in your Facebook ads, you'll increase the chances that people will take the desired action.
For example, if you're selling a new product, you could include customer testimonials or reviews in your ad copy. Additionally, you could also include a count of the number of people who have already purchased the product or service.
8. Target a narrow audience
One easy and effective way to lower your CPM is to target a very specific audience with your ads. When you target a smaller group of people who are more likely to be interested in what you're selling, you'll waste less money on impressions that don't convert into leads or sales.
You can use Facebook's targeting options to narrow down your audience by factors like age, gender, location, interests, and more.
9. Encourage interaction with your Facebook advertisements using a clear CTA button
The purpose of a Call to Action (CTA) button is to encourage people to take action, such as clicking through to your website, contacting you on Facebook Messenger, requesting a quote, or making a purchase.
If your CTA button is not clearly visible or easy to understand, people are less likely to take action. So, ensure that your CTA button jumps from the page and that the text is clear and concise.
Be as specific as possible, so your target audience doesn't have to waste time trying to figure out what you want them to do. For instance, instead of using "Learn More," use "Download Now" or "Buy Now."
Of course, your CTA still has to be relevant to the rest of your ad. Make sure that it's consistent with your overall message and that it leads to a relevant landing page.
10. A/B test all aspects of your Facebook advertisements
A/B testing (also known as split testing) is a method of comparing two versions of an advertisement to see which one performs better. You can A/B test different aspects of your Facebook ad, such as the headline, image, copy, and CTA button.
To A/B test your Facebook ads, create two versions of your ad with different elements. Then, run both ads at the same time and see which one performs better. You can use Facebook's built-in A/B testing tool to make this process easier.
11. Determine the best timing to reach your targeted audience on Facebook
The time of day that you publish your ad can have a big impact on its performance and, consequently, your Facebook ad CPM.
To illustrate, if you're targeting working professionals, you'll want to publish your ad during working hours when people are more likely to be on Facebook. On the other hand, if you're targeting stay-at-home parents, you'll want to publish your ad during afternoons or evenings when they're more likely to be on Facebook.
Experiment with different times of day to see when your target audience is most active on Facebook so that you can maximize the reach of your ads.
Timing also covers the time of year. For example, expect your CPM rate to shoot up during the holiday season as businesses compete for ad space. You can take advantage of this by running ads early before the competition increases, so you can still reach your target audience at a lower cost.
12. Test different ad formats
Finally, one last tip for reducing your CPM is to experiment with different ad formats until you find one that works well for your business.
Facebook offers several different types of ads — including video ads, carousel ads, canvas ads, and more — so there's bound to be one that performs better than the others. So test out a few different options and see which one gives you the best results in terms of reach and efficiency.
On top of that, remember that the right ad format for your Facebook ads will depend on factors like who you're selling to, what kind of product or service you're selling, and what your overall marketing goals are. Younger audiences, for instance, are more responsive to video ads, while older audiences may prefer static image ads.
Wrapping it up
Lowering your CPM takes vigilance, patience, and a deeper understanding of how Facebook advertising works. But if you're willing to put in the work, you can definitely see a significant reduction in your CPM over time. As a result, you'll be able to reach more people with your ads while also saving money in the process.
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