“The higher cost a Facebook ad has, the more impressions it will get” is a popular misconception in the digital marketing world. However, by knowing how to lower CPM Facebook Ads effectively, businesses can launch a more successful and cost-effective campaign. Explore more about CPM and tips to optimize this metric with NEMI Ads!
1. Overview on Facebook Cost Per Mille (CPM)
CPM is a familiar term when it comes to ad costs on Facebook, directly affecting ad campaign performance. By understanding the connection between CPM and campaign effectiveness, you can optimize your overall campaign.
1.1. What is Facebook Cost Per Mille (CPM)?
CPM, or Cost Per Mille, represents the cost for 1,000 ad impressions on Facebook, serving as a key metric to maximize brand awareness and reach.
| CPM Formula: CPM = Advertising cost x 1,000/Number of impressions Example: For a $6,000 ad spend campaign earning 5,000 impressions, your CPM would be: 6,000 x (1,000/5,000) = 1,200. Your CPM is $1,200. |
1.2. Why is CPM Facebook Ads Important?
In the awareness phase of an ad campaign, CPM is a valuable metric for tracking ad performance and guiding businesses in making informed decisions. Here is why this metric matters:
- Boost brand recognition: CPM is paid for ad impressions, especially for new brands, products, or services. It also allows you to gauge how well your ads are raising awareness.
- Make data-driven decisions: CPM (whether too high or too low, compared to the average CPM of your industry) serves as an indicator of when to take action to improve your campaign. Each solution hinges on the specific situation of the ad.
- Ensure effective audience reach: CPM helps you assess whether your ads are effectively reaching your target audience and whether your message is connecting with the right people. If it’s not, it’s crucial to revisit your target customer research and make necessary adjustments to your customer persona.
- Measure Ad Effectiveness: Comparing CPM across different ads within the same campaign helps identify what is working and what is not – whether it is the product, content, or ad format – so you can make the necessary adjustments.
2. Why is my Facebook Ads CPM so High?
Before answering how to lower CPM on Facebook Ads, you need to figure out: What is a good CPM on Facebook Ads?
| Average Facebook Ads CPM Generally, the average Facebook CPM varies depending on the industry, but it typically is around $11. CPM can be as low as $2, but it can also be $30 and above.According to Databox’s Benchmark data from 400 companies, average Facebook Ads CPM is $7.20/month. |
If your CPM for ads significantly exceeds this level, it is likely that you are running an inefficient campaign. High CPM can be caused by:
2.1. Ad is not Relevant with Target Audience
Your business needs to track this index in Facebook Ads Manager to improve the Facebook Relevance Score. The more relevant your ad is to your target audience, the more likely Facebook is to prioritize its delivery.
Conversely, a low relevance score increases CPM, as Facebook needs to push harder to get the same number of impressions.
2.2. Ad Appears Too Often
Even if your ad is relevant, overexposure can lead to ad fatigue. When your audience sees the same ad repeatedly, they may start ignoring it, or worse, report it as spam. This negative feedback can cause Facebook to limit your ad’s reach, leading to Facebook CPM increase.
2.3. Unattractive Ad Copy or Image
If your ad’s visuals or messaging are not compelling, users are less likely to engage with it. Ads with higher engagement rates generally have lower CPMs because Facebook’s algorithm favors content that resonates with users.
Video ads, in particular, tend to perform better in terms of engagement and CPM.
2.4. Split Testing is Missed Before Running Ads
Failing to test different versions of your ads can result in higher CPMs. Without split testing, you might be running ads that are not optimized for your audience, leading to lower engagement and higher costs. Testing various ad sets helps identify the most effective combinations of audience, content, and format to apply to your campaign.
2.5. Expensive Ads during Peak Times
During peak times, such as holidays or significant events, the competition for ad space intensifies, leading to higher CPMs. Businesses need to pay more to get their ads seen during these periods, so planning your budget and timing accordingly is crucial.
2.6. Ad gets Low Customer Feedback Score
A low customer feedback score can severely impact your ad’s performance. Facebook tracks this score, which ranges from 0 to 5, with anything below 2 leading to penalties like higher costs or reduced ad visibility. If your score drops below 1, you might face a substantial increase in CPM.
If you’re struggling with high CPM rates, NEMI Ads can assist you. Our experts specialize in optimizing Facebook ad campaigns to lower costs and improve performance. Contact us today to find out how we can enhance your ad strategy and drive better results.
3. Top 7 Tips to Lower your Facebook Cost Per Mille
Businesses can choose their approach to ROI growth. However, to ensure long-term ROI and optimize investment costs simultaneously, building a clear and effective strategy is vital. Here are expert tips to help you reduce your CPM:
3.1. Improve your Relevance Score in Facebook Ads Manager
The higher your ad’s relevance score, the more likely Facebook will prioritize its delivery, leading to a lower CPM. This score is measured by the following metrics: perceived quality, engagement rate, and conversion rate. It is advisable to improve the quality of your Facebook Ads.
To access and improve ad relevance score, follow these steps:
- Access Relevance Diagnostics in Facebook Ads Manager.
- Monitor the evaluation of the metrics with ratings: Below average, Average, or Above average.
- Focus on improving the quality of Ads rated Below average through Facebook’s diagnostic Causes and Recommendations (switching from “Below average” to “Average” has a greater impact than from “Average” to “Above average”)
NOTE: This metric should be monitored when the ad has passed the machine-learning stage for the most accurate results.
3.2. Adjust Frequency of your Ad to avoid Ad Fatigue
Even when ads appear to be interesting to the audience, high-frequency ones can lead to ad fatigue, causing ads to be skipped or reported as spam by audiences. Businesses should take control of the ad frequency.
Here’s how to get lower CPM on Facebook:
- Go to the Frequency Control section in Facebook Ads Manager. There are two metrics you should notice:
- Target Frequency: Average number of times per week you want people to see your ad within a set period of time
- Frequency Cap: Maximum number of times you want people to see your ad.
- Adjust the metrics according to your campaign goals.
- Ex: Set Frequency Cap to 3 impressions in 5 days, Target Frequency to 2 impressions in 7 days.
- Subsequently, Facebook will automatically distribute the frequency evenly during the campaign.
- Exclude audiences that have already interacted with your ad to reduce the frequency of ad exposure to these users.
3.3. Align your Ad with Audience’s Preferences and Behaviors
To ensure your ad resonates with your target audience, digital marketers should create audience-specific ads tailored to their preferences and behaviors. This approach enhances engagement and lowers CPM. Additionally, optimizing ad distribution to these audiences can generate more leads or conversions, further boosting ROI.
To customize your ad to audience’s preferences and behaviors, make sure that you follow these steps:
- Access Meta Business Suite tool to analyze demographic information, interests, behaviors, and Ad reception habits.
- Determine specific strategic goals to build appropriate messages, CTAs, and images (impressive or compelling) that are customized to suit the audience.
- Opt for the best copy, image, format, and placement based on the above analysis data to improve your ads quality.
3.4. Nail Down your Target Audience
Targeting a broad audience can dilute your ad’s effectiveness. Instead, NEMI Ads suggests focusing on a more specific audience, which increases relevance and reduces CPM.
These are the steps you can follow to nail down your audience:
- Open the Audience section in Facebook Ads Manager.
- Select Create Custom Audience.
- Select Customer List, then follow the instructions on:
- Prepare List of customers
- Add List: Enter your audience’s description
- Match Columns: Provide necessary and accurate information that can be encrypted.
- Select Import and Create.
3.5. Use Split Testing for your Ad
Split testing, or A/B testing, is crucial for identifying the most effective elements of your ad campaign. This testing can help to find all aspects of your ad that resonate with your customers, since relevant ads are more likely to be liked and remembered by customers, thus increasing customer engagement and ROI.
To conduct split testing, stick to these steps:
- Select your campaign to test in Facebook Ads Manager.
- Click ‘A/B Testing’ on the toolbar and choose Start.
- Select the variables to test (Audience, Creative and Placements).
- Evaluate performance and choose the right version.
- Edit and publish the final version.
3.6. Allocate Ad Budget Effectively, Invest More in Peak Seasons
During peak seasons, businesses usually face increased competition as many other advertisers also ramp up their campaigns. “Preparing and launching ads campaigns before peak season can build momentum for the main stage, while mitigating risks and providing a competitive edge over rivals.” – according to experts from NEMI Ads.
To allocate budget effectively, consider these strategies:
- Run ads early: This stage allows ads to go through the machine-learning stage and achieve the best possible state when entering a more competitive stage.
- Foolproof content plan from early stages: Prepare a teaser for the campaign in order to create momentum, encourage customers to update regularly before entering the main stage.
- Always adapt: At early stages, analyze the results and see if any adjustments need to be made before the busiest period.
- Effective spending: Spend more on CPM right before the peak period when there is less competition and lower prices.
NEMI Ads suggests businesses to consider increasing the budget by 30-50% for the peak period campaign, depending on the campaign’s goals and scale.
3.7. Improve your Customer Feedback Score
Customer Feedback Score is also a noteworthy metric that should not be overlooked. By constantly maintaining a high feedback score and positively improving weak points, you can increase your overall feedback score, ensuring better ad visibility and lower CPM.
Improving ad creatives by:
- Select Account Quality in Facebook Ads Manager.
- Select Business Account in the left menu.
- Select your page and view your current customer feedback score.
- Find the aspect that receives a lot of negative feedback and actively improve
- Regularly monitor and make appropriate adjustments according to customer feedback.
In addition to the top tips mentioned above, there are other factors that can lead to abnormally high CPM:
1. Violations of Facebook’s Advertising policies
If your ad features products or services that violate Facebook’s advertising policies, Facebook will restrict the display of your ads, making it harder to reach your target audience. This results in higher costs per impression compared to ads that fully comply with Facebook’s guidelines.
2. Unoptimized content
Ads with unconvincing CTAs or overloaded with keywords may be limited in display by Facebook’s algorithm. This can lead to your ad being shown to the wrong audience or not shown at all, driving up your CPM. To avoid this, ensure your CTA is clear, concise, and compelling.
3. Using the same pixel and via set camp to run multiple campaigns simultaneously
Relying on the same pixel for multiple campaigns can confuse Facebook’s algorithm, leading to higher costs and even the risk of your ad account being restricted. To prevent this, consider adjusting your campaign settings and using a new pixel for different campaigns. It is also advisable to use a specialized advertising account for better management and to avoid unnecessary account restrictions.
If your CPM remains higher than expected despite following these guidelines, it might be time to seek professional assistance. NEMI Ads offers specialized services, including strong ad-running accounts and unlimited domain support. Our expert team can provide tailored ad optimization advice to help ensure your ads are not restricted, ultimately lowering your CPM and improving campaign effectiveness.
4. Conclusion
We hope this article has provided you with a deeper understanding of how to decrease CPM on facebook and the key factors that can impact it. By implementing the strategies and tips discussed, you can significantly reduce your CPM, optimizing your ad budget and enhancing the effectiveness of your campaigns.
Stay connected with NEMI Ads to keep updated with more valuable insights and tips to achieve your advertising goals efficiently!
