How to reduce your CPM?
If you already ran at least one Facebook Campaign you know what CPM is, or at least, you should know.
CPM is your “cost per 1,000 impressions”. Usually, the lower your CPM, higher your ROAS.
Usually, a high CPM is a symptom of a weak campaign.
I won’t get too much into details here, but basically, Facebook has a limited publicity space and advertisers bid through an auction process to win the right to display their ads.
But, Facebook takes into consideration a lot of things besides how much you’re willing to bid.
Facebook’s most important asset is active users. And as users, we don’t like ads spamming our news feed, right?!
Since CPM is the cost for 1000 impressions, it’s logical to think that if I’m going after an audience that is very competitive, there is nothing I can do to have a better CPM.
It’s a competitive audience. It is what it is.
No! There are a few things you can do to ensure a better CPM for your campaigns.
To avoid annoying users with poor ad experience, Facebook rewards “good ads” with a lower CPM and “bad ads” are punished with higher CPMs.
So, if you have a high CPM, is very likely that your ads are not relevant to your audience!
The key to start with the right food and get a good CPM from the beginning is to make sure you’re making relevant ads. You should always keep an eye on Relevance Score, on the Ad level.
Here a few tips on how to start well your campaigns.
1 – Target the right audience
You segment your audience in the Ad Set level. There you can tell who Facebook should go after to display your ads – you can select age, gender, interests, location, a lot of things. If you’re not brand new to Facebook Ads, you know what I’m talking about.
Selecting the wrong audience will cause Facebook to show your ads to people who don’t care about your offer, which tells Facebook that you’re running a “bad ad” with low relevance for that audience. Therefore you will be punished with higher CPM.
Do your homework, find out how to target your customer and test different audiences.
Take advantage of the lookalikes as well. If you have enough sales, you can try building lookalikes based on purchases, if not you can always try based on everyone that visited your store!
2 – Have a good offer
It doesn’t matter if you have the best audience possible, if you don’t have an offer that compels them to take action, they won’t click your ad and buy from you, and again, Facebook will see your ad as irrelevant.
Split test different products, free shipping, bundles, discounts, or better yet, make sure clients see enough value on your product. You can split test different value propositions as well.
When the perceived value is higher than cost $ the customer buys.
3 – Attention Grabbing Images
Even if you have a great offer and the right audience, if people don’t stop scrolling their news feed to check what your post is about, you won’t sell.
Attention-grabbing images are great to make people stop to see your offer, if you fail to have an excellent creative, your low CTR (click through rate) will tell Facebook that people don’t care about what you’re advertising and guess what? High CPM for you!
Split different test creatives to see which ones get you better CTR and CPM.
Those three items above are the very basics of tailoring a good ad. There is way more than that for a killer campaign, but those three tips are a good start.
Okay, but if I’m already doing those things? I already have a good CTR and a good Relevance Score.
Well, if your CTR is already above 2% for cold audiences and your Relevance Score is above 8, there are a few things you can still do to try to reduce your CPM.
1 – Try a broader audiences
If you already have ads running with good CTR and Relevance score, you can try a broader version of this audience.
A broader audience will allow Facebook to bid in more auctions for you; therefore you have better chances to get cheaper bids.
2 – Automatic Placements + Ad Formats
For the same reason as above, if you’re bidding for more placements and have more ad formats, Facebook will have more chances to get you cheaper bids, therefore, cheaper CPM!
You can duplicate your high CPM ad set and go for “Automatic Placements,” there, have multiple ad formats. I like to have Video, Carousel, Single Image, Catalog with Image and Catalog with Video.
3 – Optimize for something cheaper, like “link clicks.”
Well, this one is the most likely to get you the lowest CPM of all the tips, BUT be careful here! When you change optimization, Facebook will go after people that are more likely to perform the action you asked for, in this case, Link Clicks.
Usually, this audience is cheaper than “Purchase” optimization, but it won’t necessarily bring you a better ROAS.
It’s worth trying, especially if you have a killer offer with great soft metrics in your conversion campaigns.
Those are just a few tips to help you reduce your CPM.
The bottom line is, make sure your ad is relevant to your audience and you won’t have problems.
Work on your backend, have good profit margins, high AOV, and LTV that allows you to handle high CPM when they come.
Every month I choose a few entrepreneurs to personally help them scale their Facebook ads and businesses.
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