For those running Facebook Ads, the CPM index is no longer unfamiliar. This is an important metric in Facebook advertising reports that indicates high or low advertising bids. In this article, Optimal Agency will help you better understand this indicator and how to effectively reduce CPM when running Facebook ads.
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What is Facebook CPM?
CPM is an acronym for Cost Per Mille which indicates the cost per 1000 impressions. This is one of the forms of payment based on the number of ads displayed on Facebook whether users interact with the ads or not.
This metric is used to calculate profits from advertising campaigns and compare the effectiveness of different advertising campaigns on Facebook. Facebook CPM is currently calculated as the total amount spent on an advertising campaign divided by the number of impressions, multiplied by 1000.
This is an important indicator in Facebook advertising reports because it reflects whether your advertising bid is high or low. The lower the CPM, the cheaper the cost of advertising on Facebook. You should choose CPM when your goal is to increase brand awareness and reach the most users.
How much Facebook CPM is good?
Determining CPM is very important because it determines which budget your ad can display in which locations and which audiences it can reach. Before learning about how to reduce CPM when running ads on Facebook, let’s see what CPM index is good to come up with an appropriate adjustment strategy.
Compare your Facebook CPM with industry standards and if your CPM is at an average level, your ads are being delivered and displayed well. If the CPM is too high compared to the industry average, you should review the ad model: does the audience file or ad violate the policy,…
Additionally, you can refer to industry standard CPMs in reports from market research businesses like WordStream. Or you can compare yourself with your business’s past data to thereby reduce this index to the lowest level.
The main reasons why Facebook Ads CPM increases
There are many reasons why CPM increases, but below we give some main reasons causing this situation before applying how to reduce CPM when running ads on Facebook.
Target the wrong audience
Facebook is increasingly focused on improving user experience, so the platform’s algorithm often prioritizes delivering advertising content that is relevant and suitable to the target audience. If your advertising targets the wrong audience, the impact of display advertising will be on audiences that have no need. At that time, the Facebook algorithm will evaluate your ad as inappropriate and will limit its display, causing CPM to increase.
Advertisements are not attractive
If you target the right target audience but the CPM of Facebook Ads still increases. At this point, you need to review whether the advertising content is suitable for the target audience or not. Because users everyday access many posts with different content on Facebook.
In case the post is not attractive enough, it will not attract customers to interact. At that time, Facebook will consider your ad not good and limit its display, causing CPM to be pushed up.
Ads appear too much
One of the reasons why CPM in Facebook Ads increases is the high frequency of ad display. It looks like spam and makes users feel uncomfortable. When customers report a lot, Facebook thinks your ad is irrelevant, causing CPM to increase. Even if there are too many bad reports, your ads will be disabled.
Choose the wrong advertising time
During the year there are many special times such as holidays, Tet, Black Friday,… when businesses actively run advertising to increase sales. This causes Facebook advertising costs to increase, meaning CPMs also increase during these times.
How to reduce CPM when running ads on Facebook?
High advertising costs or CPMs prove that your advertising campaign content is not effective. To optimize costs and improve business, advertisers need to find ways to reduce CPM on Facebook Ads. Below, we will suggest some ways to optimize this advertising index.
Determine the correct campaign goals
Corresponding to each different campaign goal, Facebook will optimize and distribute ads in different ways, leading to different CPMs for each campaign. Before creating a Facebook Ads campaign, you need to determine the correct goal of your campaign. If your advertising goal is just to increase reach on Facebook or increase brand awareness, you should focus on maintaining the lowest CPM. As for conversion goals such as registrations or purchases, you should not pay too much attention to the Facebook CPM index.
Aim at the right target audience
Facebook’s algorithm often prioritizes the delivery of advertising content that provides useful, attractive, and relevant information to the target audience to enhance user experience. Each target audience group has different interests, behaviors, and needs, making it impossible for one advertising content model to meet them all.
Therefore, make sure you are targeting the right audience. This helps your ads be delivered to the right target customers who are most likely to interact with your ads and reduce Facebook CPMs.
Create quality ads
Advertising content is the factor that attracts the most target customers on Facebook. Therefore, when creating ads, you not only need to focus on attractive titles but also content that provides useful information. Design beautiful and high-quality images and videos that comply with size standards. Besides, you should add a convincing call to action to increase click-through and interaction rates on your ads and significantly reduce Facebook CPM costs.
Perform A/B testing
When running Facebook Ads, it is difficult to know which campaign, ad group or ad is most suitable for the target audience and brings the best results. You should not focus your advertising budget on creating one campaign or ad group with one single content.
Instead, you should perform A/B split testing and monitor and measure the effectiveness of your campaign to see if your ad group is performing well to increase your budget. If any group is ineffective, turn it off or tweak it to improve performance. This also helps reduce Facebook’s CPM significantly.
Reduce ad display frequency
The reason CPM on Facebook Ads increases is because ads appear with too much frequency. The optimal solution to help you reduce CPM costs is to regularly change the ads to avoid boredom.
You can change a new image or make small changes such as different color tones, adding or removing elements in the ad image. Or you can change the message to convey different values with different ads.
Choose the right time to advertise
The CPM of an ad depends greatly on the bid at the time you run the ad. On special occasions such as holidays and Tet, if your goal is to boost sales, you need to accept high CPM to increase competitiveness. If your goal is to increase your presence, you should adjust your advertising frequency accordingly to reduce costs. In addition, you can research people’s Facebook access behavior to determine the golden hours to run ads to increase reach and reduce CPM.
The above article has provided you with useful information on how to effectively reduce CPM when running Facebook ads. Hopefully, you can successfully apply it to improve the performance of your Facebook Ads campaign and reduce advertising costs.
Please refer to:
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Frequently asked questions
If you want CPM on Facebook Ads, go to Ads Manager and then in the Columns column, select Performance and Clicks. Scroll to the right and you will see the CPM column, where you can see the specific CPM of running Facebook advertising campaigns.
The CPM index directly affects advertising budget allocation as it represents the cost that advertisers must be charged for each 1000 impressions of their ad. Advertisers can strategically allocate CPM-based budgets to ensure efficient use of resources across different campaigns and target audiences.
