This is the most complete guide for you to clearly understand what is a good CPM for Facebook Ads. Besides, if you are an advertiser who is stuck with CPMs that are too high or CPMs that are low but do not generate conversions. Then this article is perfect for you right now.
Don’t skip any content, I will analyze from basic to advanced things about CPM on Facebook Ads. We will start with the first content:
Table of contents
What Is A Good CPM For Facebook Ads?
The first part of the article includes the definition and calculation formula of CPM. I also share some information in this section about average CPM and good CPM for Facebook Ads in 2024 for your convenience.
What is CPM?
CPM stands for Cost Per Mille (Mille is simply another word for Thousand). That means the cost per 1000 ad impressions. Note that this separate metric does not depend on Facebook Audience engagement like Facebook Ads CTR.
CPM in Meta Ads Manager is displayed next to other easy-to-understand metrics such as CPC (Cost per click), CTR (Clich through rate).
How to calculate CPM?
The CPM calculation formula is actually quite simple. You can look at the image below to clearly understand the CPM calculation formula:
For example, let’s say you spend $10 and get 5,000 impressions, then your CPM is $2.00. This means you need to spend $2.00 to get 1,000 impressions (($10 / 5,000) * 1,000 = $2.00).
What is the average CPM for Facebook Ads in 2024?
According to research by Revealbot. As of May 2024, the average CPM on Facebook Ads is $9.2. However, this is only a reference number because it changes very quickly. Just in April this number was $9.87, and by May there was a slight decrease.
However, this number may fluctuate a lot because there will be many changes in related industries and verticals in the near future. Facebook Ads is a potential platform for every industry. Therefore, if there is a rise in certain industries, this number will change a lot in the future.
Expert knowledge: CPM also varies according to Ad Placement. According to research by Madgicx called ‘Average CPM by placement in 2024’, benchmarks show that placement is ‘too visible’ to the audience, CPM will be between $14 – $20. And of course locations where the audience ‘pays little attention’ or is ‘too hard to see’ will be much cheaper even under $2.
For placements that are more likely to be seen by your audience (Newsfeed, print video, Facebook Stories), CPM will be more expensive. This term similar with Average CTR for Facebook Ads.
On the contrary, CPM will be cheaper if you place ads in positions that the audience is less interested in such as Instant article, Search, Right hand column. However, choosing the best location still requires you to test ads many times to understand clearly.
What is a good CPM for Facebook Ads in 2024?
A good CPM for Facebook Ads is determined depending on the industry, product, or service being advertised. For industries with large purchasing power and high competition (cosmetics, retail), a CPM of around $10 may be a good number.
For less in-demand industries, this number can be extremely low, at just under $3. Such industries are Manufacturing, Real Estate, Travel, Construction, Automotive, etc. If you are advertising for industries like this, try to optimize your CPM below $2 as best.
>>> You also can refer: What Is A Good CTR For Facebook Ads? How To Get A Good CTR?
Why Is My Facebook Ads CPM Too High?
Basically, after carefully researching ads over the past year with Facebook Ads experts. I think some of the main reasons why CPM for Facebook Ads is too high could be:
Poor quality advertising
Poor quality ads are one of the main causes of high CPM. If you actually created an Ad Copy that has nothing to do with the target audience. It has no effect and causes CPMs to skyrocket (making it extremely difficult to generate conversions).
My advice in this situation is to be careful in creating Ad Copy. It is a process of creativity and understanding your customers. Don’t rush and read the next content, the end of this article has some good tips for you to use.
Competitive time
Competitive times relate to ‘hot’ times of the year. It could be Christmas, Thanksgiving, New Year, Lunar New Year, Black Friday, etc. Even on some unexpected weekends, you turn on Ads Manager and see the CPM suddenly crazy high.
This is extremely understandable because these times receive a lot of attention from audiences on Facebook. Number of visits, visit time and searches for products/services skyrocketed. And of course, the skyrocketing demand makes many advertisers want to capture the audience’s attention and create conversions.
Competitors are too strong
Competition from competitors can be a major cause of too high CPMs. Just imagine if you were advertising some very popular and well-known product. The possibility that competitors are also competing for audiences with demand for that product is very high.
From there, bid prices will increase, CPC and CPM will also increase. Actually this is healthy competition in advertising. However, it is better for you to learn about Niche Product to reduce competition stress as well as reduce CPM.
Expert knowledge: Niche products are not too prominent and well known. However, user demand is still enough for you to make a profit. You can learn about Niche Products through filtering e-commerce sites, or product search groups running ads on Facebook.
New Ad Account
A new advertising account with no spending history will not be prioritized by Facebook in the advertising process. This can also be a reason why CPM will be too high at times. A new advertising account is assessed by Facebook as not reputable and not capable of running large budget ads. Facebook will also suggest higher bid, CPC, CPM, and CTR for these accounts. To handle this situation, continue reading the next content.
How To Get Good CPM For Facebook Ads?
To get good CPM for Facebook Ads in 2024, I want you to focus on the basics right below:
Optimize three ranking factors
In the latest version of Meta Ads Manager, Facebook offers three ranking criteria to evaluate the relevance of an Ad Copy. It also determines CPM so I want you to optimize the following 3 things:
Ad quality
This section deals with the quality of your ad content. Facebook evaluates Ad quality ranking based on content, user feedback and user experience after viewing the ad. So try to be honest and improve your content all the time. It’s better to master the skill of using A/B Split Test. This feature helps you compare the performance of different assets and find the best content with the best metrics.
Ad Engagement
Ad engagement is how much your audience interacts with your ad. So you can see ads that get Angry or are hidden or skipped will not receive good interactions.
It’s also will not be suggested by Facebook to the right people (they can cause your ads to be interrupted too). This leads to bad too high CPM.
Try to use new interactive elements appropriately. It could be adding attractive emojis, adding surprise effects in Ad Creative, using famous memes appropriately or using questions to interact with the audience, etc.
Ad Conversion
Ad conversion involves the audience’s conversion and action towards the ad. The more audiences buy the product, the higher this number becomes.
This part is quite simple, I want you to focus on improving your CTA and Landing Page. If you can add a CTA in the promotional image or video, even better (and it must be really reasonable).
If optimizing CTA and Landing Page is not really effective for you, you can think about increasing your weekly advertising budget to compete better. Or find new potential audiences to target. This may reduce CPMs in certain situations.
Expert advice: In this section, I want you to pay attention not to use things Facebook hates. Mainly from advertisers cheating to gain advantage in advertising. Facebook has become stricter with inappropriate ads techniques, content, and elements such as:
Besides that, you must focus on improving “Below Average” rankings first. Then optimize ‘Average’ to ‘Above average’ level.
Use Agency Account
This content focuses on handling the problem of CPM being too high for New Ad Accounts. New accounts always appear inferior and have many problems because they are not trusted by Facebook.
This situation will end when you Rent Facebook Agency Account. An agency account is a premium account recognized by Facebook as having a history of spending large budgets, running large ads, and not violating any of Facebook’s guidelines.
It also receives priority consideration, unlimited ad set duplication and most importantly, the CPM is cheaper than a personal ad account.
Listening to advertising Expert
Real experts know what you’re missing. More specifically, SpeedX Agency Expert has excellent individuals and many years of experience in advertising optimization.
If you are having difficulty improving CPM, or other advertising metrics such as CPC, CPA, CTR, bid, etc. You can contact us immediately and always. It only takes us about 24 hours to evaluate ads and give you the most reasonable suggestions.
Even the most reasonable strategies will be shared if you use service from SpeedX Agency.
Besides, you can also participate in communities, blogs, forums anywhere to learn content about optimizing advertising metrics. Optimizing CPM is a very small part and can be completely overcome when you are equipped with in-depth knowledge from many different places.
Final Words
After understanding what is a good CPM for Facebook Ads and related things to improve CPM that I have shared in this article. Take note of the best things to use for your advertising in the future. Facebook Ads is a long process, a big picture. So don’t be lazy and continue to take the time to read more important knowledge. Wishing you success with Facebook Ads.
