How to Lower CPM on Facebook Ads? [2024 Guide]

May 31, 2024
- Ad Setup

A high CPM can quickly deplete your advertising budget, leaving you with little to no conversions among your target audience.

Conversely, a lower CPM can improve your overall ROI by increasing the efficiency of your ad spend.

But how to actually do it and make the most out of your advertising budget?

Dive into our list of 9 strategies to lower CPM on Facebook Ads while maximizing your ROAS(Return on Ad Spent).

Let’s start!

What is CPM?

CPM stands for Cost Per Mille and refers to the cost per 1000 ad impressions.

In other words, CPM represents the average cost of showing an ad to 1000 people or viewers.

Thus, it measures the efficiency and cost-effectiveness of online ad campaigns since it allows you to compare the relative costs of running Ads on different platforms.

A lower CPM means you pay less to reach more people, making your ad campaigns more cost-effective.

Why CPM Matters?

Perhaps one of CPM’s greatest benefits is that it tracks your campaign’s success more precisely and granularly, providing you with relevant insights about:

✨ Ad spend and how much you are investing in a campaign,

✨ The actual cost of your ads and how expensive they are to deliver to your target audience,

✨ The cost-effectiveness of your ads,

✨ Areas where you may be overspending, etc.

Thus, focusing on measuring and improving the campaign's impressions will yield more significant benefits than solely trying to optimize your spending for clicks.

Besides that, CPM can help you:

Indicate whether your ad resonates with your target audience or whether your targeting parameters are too broad.

Therefore, you can see if your targeting strategies are effective.

Set benchmarks and goals for ad campaigns and evaluate their success accordingly.

In addition, you’ll get insights about areas to improve and to make data-driven decisions to optimize your ad campaigns.

Determine which ad formats are most cost-effective for your business.
Realize if there is less interest in your products or services so you can either create new ad copy or even cater to a different audience.

How To Calculate CPM on Facebook?

Calculating CPM is straightforward - You divide the Total Ad Spend by the total number of impressions and multiply the result by 1,000.

For example, if your Facebook Ad Spend is $500 and it received 10,000 impressions, the CPM is:

CPM = ($50 / 10,000) x 1000 = $5

This means the cost per 1,000 impressions for your Facebook ad campaign is $5.

However, the figure you get doesn’t tell you much unless you know the benchmark for your industry.

What are The Facebook Ads CPM Benchmarks?

To determine whether your CPM is too high, you need to compare it to your industry’s current benchmark.

As you can see, the Food and Drinks industry is the least cost-effective, with the highest CPM.

Another critical factor to consider is fluctuations that happen throughout the year.

Seasonal holidays and special occasions can lead to higher CPM due to fierce competition.

When it comes to retargeting campaigns, the lowest CPM is in the Clothing and Accessories industry.

Knowing your performance can help you decide the next step to adjust and improve your ad campaigns.

What Are The 2 Main Culprits for High CPM?

Although multiple factors can contribute to high CPM, they all boil down to 2 key reasons:

Supply and Demand, and
Customer Experience.

While Supply and Demand covers a broad range, including your industry, target audience, and other factors that are harder to control, Customer Experience gives you more control.

High-quality customer service is a must regardless of your industry. Facebook recognizes that and prioritizes Ads from businesses with great reviews.

Facebook Customer Feedback Score measures customer satisfaction with your company's Ads on the Facebook platform.

It calculates the score using customer feedback collected over 90 days.

Consequently, it determines which Ads to deliver to customers and which to prioritize in the auction.

It goes without saying that Ads with a higher score are more likely to be visible and vice versa.

Now that you are familiar with all the nitty-gritty details about CPM, it’s high time to see ways to lower it.

How to Lower CPM on Facebook Ads in 9 Effective Ways?

1. Improve Your Facebook Ad Relevance

Ad relevance diagnostics measures how well an ad is performing based on factors such as:

✨ Quality ranking - Shows the ad's relevance to the target audience,

✨ Engagement rates - Provides info about clicks, views, etc., which show your audience’s engagement.

✨ Conversion rates - Shows if and how well you achieve your ad’s objectives.

By taking all the metrics into account, Facebook Ad Relevance Diagnostics detects underperforming ads.

So, for example, if you want to improve quality ranking, avoid low-quality attributes from your creative.

If you want to improve engagement, enhance your ad’s relevance by making it more eye-catching, attractive, etc., or target an audience that will receive the ad better.

Finally, if your conversion rate needs enhancing, improve the CTA of your ad or customer experience.

Although each metric can give you good pointers, you’ll get the most optimal picture if you view them as a whole rather than individually.

📌 Note:

You can’t run diagnostics if your ads have fewer than 500 impressions. Furthermore, the diagnostics won’t optimize ads already meeting your advertising objectives.

2. Optimize and Change Your Audience Targeting

Audience targeting is a must because it allows you to create tailored ads that meet your audience’s requirements and needs.

Break down your target audience into more specified groups to enhance relevance and engagement.

Then, develop customized advertising content for each group to make it easier to follow your ad campaign’s performance.

For instance, you can break your audience based on demographics, interests, age groups, behaviors, etc.

In addition, you can use tools such as "Lookalike Audiences" to target customers who are similar to current ones.

On the other hand, the "Custom Audiences" allows you to focus on people who have already engaged with the business in some way.

💡 ProTip:

With ADTools, you can segment your audience based on regions, countries, or even a single postcode.

This way, you can be much more specific and break down the audience into more manageable units.

Furthermore, if you run a local business, being able to pick a single postcode can expand your local reach even further.

3. Invest In Facebook Ads Retargeting

Retargeting your audience through Facebook ad campaigns enables you to target people who have already shown an interest in your brand or product, increasing conversion chances.

Moreover, you can remind people of products they might have abandoned in their shopping cart or items they’ve viewed on your website.

Meta Pixel provides insights into your web traffic and helps you better understand your audience’s behavior so that you can optimize your campaigns better.

You can also see when customers took a desired action after seeing your Facebook Ad.

💡 ProTip:

Interpreting analytics and results can be complex and overwhelming for a beginner but also for a more seasoned marketer.

ADTools provides easy-to-understand graphs showing you ad impressions and clicks.

Therefore, you don’t need to set up your own analytics or try to understand complicated data-packed tables.

Unlike Facebook Ads native analytics, which allows you to check only the current or end metrics, our comprehensive graphs enable you to:

Check the progress of your campaign,
See whether it is getting more popular or declining, and
Pinpoint the highest and lowest-performing moments.

4. Manage Ad Frequency

Audience fatigue can occur when you show the same ad repeatedly to the same audience.

Hence, it can cause the audience to become bored or annoyed, ultimately decreasing the ad's performance and increasing CPM.

Consequently, people are less likely to interact with your ads and might even hide them from their feeds altogether.

One way to prevent this is to use a Frequency Cap option to limit the number of times an ad viewer sees your ad, preventing them from becoming tired of it.

A general rule of thumb is to start with a low-frequency cap of 1-2 impressions per user per day.

Then, depending on the results you see, you can decrease or increase impressions.

Again, a lot will depend on your campaign’s goals, budget, and strategy.

Another way is to create different ad variations and use them in a sequence to tell a story or highlight different aspects of your product.

Speaking of creating ads, let’s examine how important that aspect is to lowering CPM on Facebook Ads.

5. Create Showstopping Ads

With so many ads an average Facebook user is exposed today, creating an ad that truly stands out is not only hard but also a must.

If you add a declining overall attention span, creating a scroll-stopping ad may seem like a Herculean task.

Depending on your ad campaign’s objectives, you may choose to create your ad using a video, image, only text, or a combo.

In order to create a visually appealing ad, you should include:

High-quality images
Persuasive but not salesy copy
Attention-grabbing headlines, and
Clear and compelling CTAs.

Jump to our blog, Ad Creation Unleashed: A Beginner's Guide to Crafting Compelling Ads, for more details on creating a successful ad.

💡 ProTip:

ADTools can help you create a compelling ad campaign in a matter of minutes.

Not only will you get multiple headline suggestions, but you can also add longer headlines and descriptions.

Furthermore, you can add images from our Image Library or upload your own for more customization options.

Finally, you can preview your ad campaign to see how it will appear across multiple platforms.

6. Add Social Proof for Good Measure

Social proof is yet another effective way to improve the performance of your Facebook ad campaigns and lower your CPM.

It involves using elements such as:

Reviews,
Testimonials,
Ratings, and
User-generated content to show potential customers a positive experience other people had with your product or service.

People tend to relate to and trust word-of-mouth reviews, which can lead to better engagement and increased conversions coming through your ads.

For example, you can show positive reviews and testimonials from satisfied customers in your ad content or use images or videos of customers using your product.

Or, you can try to encourage customers to share their experiences on social media and feature UGC in your ads, such as photos or videos of customers using your product.

Naturally, offer an incentive, a small gift, or a discount to reward those who do.

7. Don’t Forget a CTA

It’s almost funny to think that something as short as a CTA is a powerful and final trigger to convert your ad viewers.

And somehow, including a compelling CTA seems to still be an issue for many businesses.

In a nutshell, be clear and transparent in what you expect your audience to do.

Including a clear CTA can lead to higher engagement rates, such as clicks, likes, subscriptions, etc.

When the Ad and its CTA are engaging and relevant, it mostly leads to having a lower CPM.

If you don’t convey that message to your audience, it’s a bit hard to expect them to know what you want from them.

In the case of CTAs, the less is definitely more.

8. Test Your Ads

Running split tests allows you to make informed decisions and not rely on your gut feeling or assumptions.

So, what are some of the ways you can test your ad campaign?

Try out different ad formats, visuals, copies, and CTAs to find the most effective version that leads to lower CPM.
Experiment with different audience targeting options or exclude specific segments to reach a better audience.
Check the ad relevance to identify any obstacles and gain insights into areas for improvement.

📌 Note

Compelling as it may be to change all aspects simultaneously, it is much wiser to change one element at a time.

This way, you’ll get a clearer picture of what works and what doesn't and what triggers a better or worse audience response.

9. Choose The Right Time to Run Your Ads

Even the best-crafted and optimized ad campaign doesn’t stand a chance if you run it at the wrong time for your audience.

This is especially important if your audience resides in different time zones.

Thus, take into consideration when they are engaging most with other relevant content you post and adjust the time accordingly.

Wrapping It Up

Lowering CPM on Facebook Ads is crucial if you want to minimize your ad spend and enhance your campaign’s efficiency.

With our 9 strategies, you’ll be off to a great start in reducing CPM and further optimizing your ad campaigns.

ADTools can be a great assistant because it guides you through every step of the ad-creating process, from ideation to realization to post-publishing.

Why Should You Opt For ADTools?

ADTools is a digital advertising solution that allows you to create, run, and track ad campaigns from a single dashboard.

The single dashboard provides a centralized place to seamlessly manage your Google Ads, Facebook, and Instagram campaigns.

Based on 3 fundamental premises: speed, efficiency and cost-saving, our tool simplifies campaign creation and automates its multiple aspects.

Besides enabling you to create thumb-stopping campaigns, our solution helps you with:

🔥 Smart Budget Balancing, which automatically determines which campaigns should receive less money and which should receive more.

Therefore, you can efficiently distribute your budget between campaigns to ensure optimal resource utilization and maintain control of your ad spend.

🔥 Monitoring Your Campaign to get a clear overview of overall performance, pinpoint underperforming ads, and cancel them so you can retarget your budget.

🔥 Identify the best-performing days and times to run your ads on Facebook thanks to our robust analytics tools.

Entices to learn more?