CPM is the cost per 1000 impressions the M is technically representing the Roman numeral for 1000. When CPM drops, your CPC, CPA, and CPL all typically decrease. Tips to lower your Facebook Ad costs,
Facebook is one of the most popular social media sites that provide an opportunity for advertisers to market their products. Facebook does allow marketers to put up adverts there, for a fee, and this is where the cost per mille ( Facebook Ad Costs) comes from.
In this article we're gonna be talking about a key topic to understand when it comes to Facebook Ads we're gonna be covering CPMs
I'm gonna explain to you
- What is CPM?
- How Does CPM work?
- How to decrease your CPM?
if you're seeing really high CPM within your campaigns this Article is gonna be tons of value and I'll show you exactly what I'm talking about with these cps let's get if you're interested in learning how to lower your CPM or make them perform better you have to first have an understanding of what the CPM is and actually how it is calculated
What is a CPM
So the first thing is what is a CPM we'll simply put the CPM is the cost per 1000 impressions the M is technically representing the Roman numeral for 1000 so that's why it's an M there instead of a 1000 but yes that's what your CPM is. Almost all online advertising platforms provide reports that show your CPM.
It’s one of the ways that you gauge the effectiveness of your campaign. Clearly, the lower your CPM the better your ROI.
How the CPM is actually calculated
It's really simple and nothing to complicate to understand but for the beginners and then people who are just getting into this stuff I figured I would cover that so now for the more advanced people it's important for you guys to understand how the CPM is actually calculated so that's what I want to break down now. here I describe three Factors that can calculate your CPM.
The demand on the facebook ads platform at the current point in time that you're launching ads on so the CPM is really really based on how many people you're going up against in the Facebook ads options.
if you didn't know the Facebook ads system is 100 percent an auction-based platform you are bidding up against hundreds of thousands of other marketers to purchase what facebook is selling you. what is facebook selling you real estate on the various placements to the social media platforms that they have access to so at various points in time throughout the year the demand for these platforms is going to go up and it's going to go down
so this is something that you have absolutely zero control over but it's crucial to understand when trying to determine why your CPM is high or why it's not doing so well.
Targeting a competitive space
The second point that I want to make about how is it calculated it goes into how competitive the space you're targeting is okay so what do I mean by this so if you're targeting in a specific interest like let's say cooking it's going to be more competitive than if you're targeting in something with fewer people that are trying to spend money on that specific target audience .
It's actually quite self-explanatory like I said it's an auction-based platform you're going up against people for something so Facebook is going to charge you more for the thing that everybody wants it's basic principles of supply and demand if you're going for an audience that isn't that competitive without that much demand you're going to have a cheaper CPM.
If you're going for an audience like kitchen gadgets in u.s. your CPM is gonna be through the roof try it try launching a cooking product and target the broad audience of cooking and make us and women you're demographic there's no possible way their CPM is going to be less than 32 hollers because that's one of the most competitive spaces that you could go into.
So those two things alone will give you a good grasp as to how the majority of the CPM is actually calculated so there are some other things too that go into it behind the scenes as to how it's all calculated and that's what this third reason here is actually for so the CPM is actually based off another thing that you have pretty much no control over so it's essentially based off of how the audience is reacting to your ad so your CPM right out of the gate is based on these two factors but your CPM can actually lower or increase over time and you're never gonna see a real drastic increase in this.
Audience feedback is a critical part of the communication process. It allows us—as public health communicators—to understand how our message is being received and how it is being interpreted. so when I say this I mean is the relevant score high are people coming and actually purchasing at your ad are people reporting your ad or marketing it as spam these various things are going to mess with your CE PM's and actually turn them up or turn them back down.
There is another point that could go into it as well but I don't really like to focus on this and I never have had huge explosions with this myself but I know it's out there.
The other factor as well could be your ad account or your business manager so when you have a business manager or an ad account that you're testing tons of tons and tons of tons of products on and none of them are sticking facebook is gonna see that and realize that the stuff you're launching is not being well-received by the customers that you're trying to show it to so
Facebook intern is going to make it more expensive for you to perform or place ads on their platform it's quite simple and it sort of really does make sense if you think about it they want to give the incentives to the best people on their platform and that's what they're gonna do but don't stress too much about this if you've tested a lot of products and you're not seeing results this probably isn't the thing that's holding you back the only time I would worry about switching an ad account or a business manager is if you're consistently testing products and every single time you're getting a CPM of over $30 and I want to add this key point in here
The country that you targeted really plays a huge factor into how high your CPM is I guarantee you a hundred percent I've done this split test a million times if you do a split test on a specific audience targeting just the US and then take that audience to worldwide targeting you're gonna see the worldwide targeting have a significantly less CPM because that is a less competitive audience because Facebook can spread your ad spent across various different countries instead of isolating it all into that one country US is obviously going to be the highest C pens because that's where some of the most high-profile buying audience is going to be
So those three things are main points that you need to consider in terms of ...
how is the CPM calculated and how you can understand?
how that all works so now that you know what a CPM is ?
how it's calculated what are the various things you can do to decrease your CPMs?
So there are a couple of points that come to mind and this is things that have worked for me so here's what I'll say
Target broad audiences
When you target super narrow down audiences to exact specific countries you're simply increasing the competition in that space that you're in and you're not allowing Facebook to freely spend your money.
Find those cheapest sets of data when you target a broad set of audiences it's going to allow Facebook to do. I just said and actually spread your budget out across those things and find what works and then properly optimize your spend for those things so not only do you target broad audiences but you do broad countries as well so whether that be
Big four countries
Whatever it may be but I really suggest that when you're testing especially if you're on a general store that you're not testing just the US or just the UK every single time because you're going to see high CPM this way when you test worldwide or when you test the big four countries which is US UK Australia and Canada you're going to see cheaper costs most of the time not every time because there are factors that you can't control and you have no say on as to why they're doing that but that's the first reason I can think of when it comes to decreasing your CPMs and honestly that's probably the biggest one that one has worked the best for me.
Create quality offers
The second one is really a broad answer but its true stuff is created quality offers so what do I mean by this you need to find good products that people are actually interested in. You need to create video ads that actually hook and entice your customers and get them interested in learning more about what you have to offer like. if you're just making a little crappy video out saying oh here's this product it does this you need to buy this now that stuff doesn't really work. you need to be telling a story with the video ads you need to show a customer a problem that they're having in their life.
I need to tell them that this product right here that you're selling them is going to make their life so much easier and it's gonna solve that problem that they really struggle within their day to day life and things like this is what actually gets people to come to your store and convert. if you're able to combine all of these things you'll actually be able to see better statistics across the line you'll be able to find winners quicker and ultimately you'll be able to lower your CPMs
So anyways this was a quick overview of CPMs and i have written article on difference between CPA,CPC and CPM the exact strategies that I'm using to lower them there is no cut and dry like three-step method of lowering your CPMs guys a lot of the CPM is calculated from stuff behind the scenes that you have no control over so that's why you can focus on these specific things that you do have control over so you can get better stats down the line