Facebook is a fantastic place for promoting your products. However, it can be a double-edged sword that “munch on” your money and make you end up over-splurging. In this post, we’ll show you a thorough guide on how to lower Facebook CPM and, hence, increase your conversion rates. Don’t worry that it is too complex for you to understand. We’re going to make it brief while covering all the critical aspects of the problem. So, read on!
Table of contents
What is Facebook CPM?
Facebook CPM, or Cost Per Mille, is the cost you pay to have your ad shown to a thousand people on the platform. “Mille” originates from Latin, meaning a thousand, and in Roman numerals, M represents 1000.
Essentially, Facebook charges advertisers based on every 1000 times their ad is displayed. When placing an ad on Facebook, advertisers bid a certain amount for the opportunity to have their ad shown.
Impressions, or the number of times an ad is seen, do not necessarily translate to unique views. A single user can see the same ad multiple times, and each viewing is counted as an impression.
Why Does It Matter?
Why is it so paramount to learn how to lower CPM Facebook ads? Because not all campaigns aim solely for more conversions. In some cases, the goal is to reach a wide audience and create awareness about a brand.
For example, new brands or those introducing new products may prioritize exposure over direct sales or sign-ups. By measuring and optimizing campaigns for impressions, which is what CPM does, advertisers can better reach a broader audience and increase brand visibility.
This approach is especially useful in identifying the most effective marketing channels. To illustrate, comparing Facebook ads CPM to search engine, CPM can reveal which platform provides better value for future advertising efforts.
What Affects Facebook CPM?
The most significant factors that can affect Facebook CPM are audience, time, Ad Objective, Bidding, industry. They all fall under the umbrella of demand and supply dynamics.
Audience
The audience determines your CPM on Facebook. For Audiences with high purchasing ability, CPM will be much higher than CPM for Audiences with low purchasing ability. This also refers to supply and demand. Supply and demand of Facebook users vary based on many more factors. Let’s continue to explore the next reasons below.
Time
Time is inherently invisible, but it determines whether CPM is high or low at different times in a year, in a month, or in a week. For example, if you run Facebook Ads over the course of a year, you will notice many changes in CPM. CPM will increase and cause you a lot of discomfort around the time of sales on e-commerce platforms. A typical example is Black Friday.
Besides, important events in the country will also change CPM. The US election will cause Facebook Ads CPM to increase. Or around the end of the year, November and December, CPM will also increase because the demand for purchases at the end of the year is huge (customers buy things to prepare for Christmas and New Year).
However, from mid to late January, purchasing demand decreased and CPM therefore also decreased. CPM varies weekly and monthly depending on the country where you run your ads. It’s best to test low-cost ads to see what time period is best to run to get good CPM for Facebook Ads while still having high conversions and ROAS.
Ad Objective
For Ad Objective, ads that increase interaction such as PPE (Page Post Engagement), Brand Awareness Ads, and Engagement Ads have low CPM. For ads that generate direct profits such as Messenger Ads, Lead Ads, Conversions Ads, CPM will be higher.
However, a high CPM does not mean that you are not allowed to use that Ad Objective. You need to carefully calculate the effectiveness of these Ad Objectives to combine many types of ads at the same time.
Bidding
Bidding strategy also determines the increase or decrease in CPM. Although Automatic Bidding has a higher CPM than Manual Bidding, Manual Bidding is not always effective.
Automatic Bidding from Facebook ensures to suggest you a good strategy to not spend too much money and create the most reasonable profit. Manual Bidding is very easy to control costs at all times. If possible, you should run a test ads campaign to test both of these bidding strategies.
Industry
For industries with high customer competition, such as Insurance and Finance, CPM can be very high and exceed $14 at times.
For other industries, the CPM can be very low (possibly less than $2), such as Food & Beverage or Pet Accessories.
Although the competition is like that, you can completely see that it is too reasonable. Revenue of industries such as insurance and finance is always high. Profits per conversion are also much higher than other industries. That’s why its CPM is high, quite easy for understand, right?
How To Lower Facebook CPM?
To answer the above question, you need to follow my small instructions below. And don’t be lazy, grab a notebook and pen to jot down the most useful things.
Branch out marketing campaigns
One of the best ideas when it comes to how to get lower CPM on Facebook is to diversify your marketing campaigns. Running various campaign types can be an effective strategy to manage costs effectively.
If your current budget is yielding positive outcomes with lead ads throughout your sales or marketing funnel, it’s advisable to stick with your existing ad strategy.
However, if you notice significant cost increases when trying to scale your current approach, exploring a full-funnel strategy with different campaign objectives might be worth trying.
Target the right audience
Another crucial tip on how to lower CPM on Facebook ads is to aim for the right audience. Facebook ads face tough competition, but targeting the right audience boosts visibility over rivals.
Choose criteria wisely, ensuring your ad resonates with the intended users. Relevant ads connect better, resulting in a higher Click-Through Rate (CTR). Meanwhile, Facebook charges based on ad relevance, lowering CPM for audience-aligned content.
Raise your relevance score
Ensure your ads resonate with your target audience to achieve a high relevance score on Facebook, ranging from 1 to 10. When your audience engages with your ads, the relevance score increases, leading to increase Average CTR For Facebook Ads and eventually lower Cost Per Click (CPC) and Cost Per Mille (CPM).
In a $60k Facebook test, the table illustrates that a higher relevance score significantly improves CTR while decreasing both CPC and CPM. If your relevance score remains stable and CPM increases, it may indicate heightened competition for the same audience, requiring a slight budget adjustment for auction success.
Improve your ad content
A must step you can’t skip regarding how to lower CPM Facebook is to enrich your ad content. With a surge in content and dwindling attention spans, your ads must stand out. Basically, here is the checklist you need to follow:
- Craft unique visuals with compelling copy and a clear call to action for maximum impact.
- Take cues from high-performing ads to infuse trending elements into your content.
- Incorporate popular memes or gifs to captivate users and boost engagement, ultimately reducing your CPM.
In a world where users may be displeased with frequent ads, ensure your ads resonate with trends and capture attention. This will maintain a favorable engagement rate, positively impacting your overall ad performance on Facebook.
Constantly track the frequency
One more reminder – Don’t forget to watch your Facebook ad frequency closely! The frequency is the average times your ad appears to a person in your target audience. High frequency, achieved by dividing total impressions by total reach, can lead to user disengagement, potential spam reports, and increased CPM.
For acquisition campaigns, maintain a low-frequency score by implementing a frequency cap through automated rules. This cap limits how often your ad appears, preventing user fatigue.
Keep an eye on the frequency column in Facebook Ads Manager for insights. In retargeting campaigns, where displaying ads too frequently can cause audience fatigue and harm relevance scores, vigilant monitoring of ad frequency matters.
Create appealing offers + CTA
Last but not least, here comes a very wise tip on make a good CPM for Facebook Ads: CTA! Even with a great audience, an unappealing offer can hinder clicks and purchases, leading Facebook to view your ad as irrelevant.
So, try to be as creative as possible and create the most compelling CTAs accompanies with enticing offers. For example, experiment with different products, free shipping, bundles, or discounts to find what resonates with your audience.
Prioritize value, ensuring that the perceived value exceeds the cost. A clear and effective CTA button is vital for prompting action, whether it’s visiting your website, contacting you on Messenger, requesting a quote, or making a purchase.
More importantly, ensure your CTA button is highly visible and easy to understand, using clear and concise text. Be specific, guiding your audience with direct prompts like “Buy Now”, “Read More,” or “Download Now.”
Key Takeaways
To close the guide on how to lower Facebook CPM, we want to emphasize that a relevant audience and refined ad content are the cores. You don’t overwhelm your audience and maintain positive user experience -> you’re marketable!
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