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How to Improve Facebook CPM in Ad Campaigns (2024)

In this guide, you'll learn how to calculate, track, and lower your Facebook CPM to maximize the profitability of your ad campaigns.

How to Improve Facebook CPM in Ad Campaigns (2024 Guide)

Facebook CPM is a direct measurement of your ad campaign's cost-effectiveness. 

But what exactly does it mean? 

How does it work and what can you do to improve it? 

In this guide, you'll learn how to calculate, track, and lower your Facebook CPM to maximize the profitability of your ad campaigns. 

Let's get started. 

What is Facebook Cost Per Mille (CPM)? 

Cost Per Mille (CPM) — also known as "Cost-Per-Thousand Impressions" — is the average cost advertisers pay for 1,000 ad views. It is calculated by dividing your total ad spend by the number of impressions, then multiplying the result by 1,000. 

Let's say you spent $15 and generated 22,000 impressions in a single campaign. That means you spent around $6.8 for every 1,000 ad impressions.

Tracking CPM is important for gauging the cost-effectiveness of advertising campaigns. The lower your CPM, the more efficient your advertising efforts are — especially if your primary advertising goal is to boost brand awareness and reach. 

CPM, alongside other advertising metrics like Cost Per Click (CPC) and conversion rate, will give you a more holistic view of your campaign's performance. It equips you with more than sufficient information to make better decisions and optimize your Facebook ad campaigns.

What is a good CPM for Facebook ads?

What constitutes a "good" CPM for Facebook ads will vary depending on your niche. 

Your best bet is to compare your Facebook CPM against the industry average. 

According to benchmark data from Lebesgue, the CPM of Facebook ad campaigns across most industries ranges between $5 and $12. The "health and beauty" niche, however, is an outlier with an average CPM (Facebook) of $18.30.

As a rule of thumb, you should aim to get a CPM lower than the industry average. 

For example, if you're in the sports niche and your Facebook CPM is over $15, there are probably holes in your strategy waiting to be discovered and patched. 

Just don't treat the industry average CPM as your end goal. 

Instead, keep monitoring your CPM as you adjust different aspects of your Facebook advertising campaign. 

A small change in your strategy can dramatically improve your campaign's efficiency and profitability in the long run. To find such opportunities, you must first understand the different factors that impact CPM in Facebook ad campaigns. 

What factors affect Facebook CPM?

  • Campaign objectives. Ad campaigns designed to generate conversions have a categorically higher average CPM than campaigns for video views. 
  • The competition. Facebook CPM tends to shoot up whenever the competition bids harder and higher for ad placements. 
  • Seasonality. Certain times of the year, like during sales holidays and the summer season, can drive up CPMs in some niches (e.g., travel, sports, fitness, and food). 
  • Audience targeting. In advertising, a broader audience often leads to lower CPMs. 
  • Ad quality. The quality and relevance of your ad creatives can affect your CPM in multiple ways, such as users hiding your ad due to irrelevance or through Facebook's Quality Ranking system. 

How to Track Your Facebook CPM? 

Before you find ways to lower your CPM, you need to know how to track it first. Otherwise, you won't be able to accurately assess if your new strategies are doing the job. 

Thankfully, you don't need to do anything technical to start tracking your Facebook CPM. 

Meta Ads Manager does this for you right off the bat. In fact, it's one of the default columns on your main campaigns page. 

For a more organized view of your Facebook ads CPM and other essential campaign metrics, use the built-in "Ads Reporting" tool. 

Click 'Ads Reporting' from the left menu and click 'Create Report.' 

The report builder lets you choose between three data visualizations for tracking campaign metrics: pivot table, trend chart, and bar chart.

Pick the one you want to use from the drop-down menu in the top-left corner. If your campaign already pulled sufficient data, Meta Ads Manager should automatically populate your data visualization with the latest figures. 

This time, CPM isn't one of the default columns in your report. 

To use this metric, click open the 'Customize' panel on the right and switch to the 'Metrics' tab. From there, select 'CPM (cost per 1,000 impressions)' to automatically update your visualization. 

That's it — your report should now include the CPM metric. 

Meta Ads Manager's built-in reporting tool is nowhere near as robust as third-party data analytics and Business Intelligence (BI) software. But if your main priority is to track CPM, it's definitely up to the task. 

Top 5 Ways to Lower Your Facebook CPM and Make More Money

No matter how you slice it, your CPM adds to the expense side of your budget. 

You need to explore ways to minimize your CPM to boost the profitability of your Facebook ads. That said, here are five ways to lower your Facebook ads CPM:

1. Fine-tune your campaign buying type and budget settings

Let's begin with the obvious: optimizing your campaign on Meta Ads Manager. 

Start by optimizing your budget on a campaign level. You can find the settings you need by going to the campaign folder in your console.

Here, you have direct control over factors that affect your CPM. For one, you can specify a "buying type" for your campaign — be it 'Reach and Frequency' or 'Auction.' 

The "Auction" buying type lets Facebook automatically determine when to serve up your ads based on a number of factors. This includes your ad targeting, campaign objective, budget, and the relevance of your creative.

In terms of CPM, this buying type is less predictable and may lead to higher costs without proper optimization. On the flip side, it can improve the profitability of your campaigns as the auction system narrows down your audience to users who are most likely to interact.

Next, "Reach and Frequency" — to be renamed "Reservation" — is a buying type that lets you set a fixed CPM throughout your campaign. This is substantially less risky than auctions, but also limits the potential of your ads to exceed campaign goals. 

The "Reach and Frequency" option is recommended if minimizing CPM is your top priority. However, the "Auction" can deliver your ads to higher-quality leads. 

Using the "Auction" buying type also lets you use Campaign Budget Optimization (CBO) through a feature called "Advantage campaign budget." 

This is useful for campaigns with multiple ad sets. Instead of relying on trial and error, you can let Facebook's algorithm decide how to manage your budget more effectively. 

You can also use budget scheduling to ramp up your bids whenever you expect more sales, like Black Fridays or during long weekends. 

2. Pay less for impressions using ad relevance diagnostics

In Facebook ads, using relevant creatives and providing top-notch landing page experiences will help you achieve better results while spending less. 

Take advantage of ad relevance diagnostics to spotlight high-priority improvement opportunities in your ads. These are broken down into three Key Performance Indicators (KPIs): quality ranking, engagement rate ranking, and conversion rate ranking. 

  • Quality ranking — Similar to "Quality Score" in Google Ads, quality ranking is a tool for evaluating the relevance and quality of your ads against the competition. 
  • Engagement rate ranking — Your engagement rate ranking compares your ad's likelihood of generating user interactions to that of your competitors. 
  • Conversion rate ranking — Lastly, conversion rate ranking lets you gauge the expected conversion rate of your ads and benchmarks it against competitors' ads. 

These aspects of ad relevance diagnostics are rated into three brackets: above average, average, and below average. 

The first rule is simple: avoid changing anything that already received an "above average" rating.

"Average" rankings still have room for improvement. But if you have a quality ranking, engagement rate ranking, or conversion rate ranking at "below average," you should make them your priority. 

Here are some quick tips on how to improve underperforming ads based on their quality, engagement rate, and conversion rate rankings: 

  • Below average quality ranking — Use better-quality creatives or modify your Facebook ads targeting to reach users who are more interested in your brand. It's also important to avoid bad ad content practices, like false advertising, clickbaiting, misleading text, and overuse of sensationalized words (e.g., "mind-blowing," "miraculous," "revolutionary," and "ultimate").
  • Below average engagement rate ranking — Apart from using an attention-grabbing headline, sprinkle your ad content with just the right amount of CTAs and other visual elements. You may also need to review your audience targeting strategy to make sure you're reaching users who may actually need your products or services. 
  • Below average conversion rate ranking — Create more compelling CTAs that focus on the benefits awaiting potential customers. Also, optimize the user experience on your landing page while highlighting elements that encourage sales, like clear value propositions, positive customer reviews, and a seamless checkout process. 

3. Broaden your audience

Targeting a broader audience seems counterintuitive, especially if you have conversion-related campaign objectives. 

But with awareness and traffic campaigns, these hyper-targeted audiences can be too expensive for your end goal.

You can easily broaden your audience targeting for your ad set through Meta Ads Manager. One by one, test how your CPM changes as you remove detailed targeting layers, like age, gender, and interests. 

If possible, also consider increasing your geographic targeting settings. This can considerably widen your target audience and reduce your CPM — at the expense of Click-Through Rate (CTR) and conversion rate. 

4. Lower your ad frequency

If you're running a reservation or "Reach and Frequency" campaign, you have the option to reduce your ad's delivery frequency.  

On an ad set level, scroll down to the "Optimization & delivery." You'll be able to set your target impressions per user within a specific timeframe. 

Showing your ad several times to the same people, especially when they're still not in the buying mood, greatly contributes to ad fatigue. This inadvertently inflates your CPM as you waste impressions on users who aren't interested in your brand — at least, not at the moment. 

5. Streamline your Facebook ads reporting

Remember that CPM isn't the end-all and be-all of Facebook advertising. 

It's definitely important if your primary advertising goal is to raise brand awareness. But for other campaign objectives, like increasing app installs or product sales, your CPM is just a small part of the equation. 

You also need to track other metrics and KPIs, like Customer Acquisition Cost (CAC), Return on Ad Spend (ROAS), and Customer Lifetime Value (CLV). 

This calls for a more powerful data analytics and dashboarding solution to streamline your Facebook ads reports

Polymer, for instance, features advanced data visualization and AI-powered tools to quickly turn your Facebook ads data into actionable insights. 

Create scorecards to easily track metrics like CPM and CTR — or, design interactive data visualizations to make raw campaign data more digestible. Best of all, you can do all of this without writing a single line of code.

Track Your Facebook CPM with Polymer

Polymer is among the top Facebook ads reporting tools on the market. 

To use it, you must first add a new data source for your Facebook ads account. 

Simply log in to your Polymer dashboard and click the "Data Manager" button (plug icon) in the top-right corner. 

On the Data Manager window, click 'Add New Data Source.' 

Select 'Facebook Ads' from the list of available data connectors and follow the on-screen instructions to link your account. Once you're back in Polymer, select the ad account you want to use and click 'Connect.' 

Finally, select the breakdowns (optional), data columns, and date range you want to import. Click 'Finish' to start pulling data. 

Polymer features for tracking your CPM on Facebook

  • Free, seamless integration with Facebook ads. Some third-party Business Intelligence (BI) platforms charge a fee for data connectors. Not only is Polymer's Facebook ads connector free, all integrations are also designed to work seamlessly — allowing data integrations within minutes. 
  • Speed up your workflow with customizable templates. Skip the number crunching and jump straight to analysis with Polymer's free Facebook ads dashboard template. It includes scorecards for KPIs, a pivot table, interactive charts, and a gallery of your Facebook ads (with performance metrics). 
  • Extract insights on command. Sail through the learning curve using PolyAI — a ChatGPT-like assistant that turns questions and instructions into ready-to-use visualizations. The Polymer dashboard builder also includes AI-generated "suggested insights," which automatically detect and create meaningful visualizations from your data. 

Start Using Polymer for Free

Ready to manage your Facebook ads data with Polymer? 

There's more good news — you can explore Polymer's entire library of data analysis tools free of charge.

Click here to start a 14-day free trial and discover cutting-edge ways to view, manage, and analyze your Facebook ads data today. 

Posted on
March 22, 2024
under Blog
March 22, 2024
Written by
Saif Akhtar
Growth Manager @ Polymer Search. Passionate about all things Startup, RevOps, and Go-to-Market. Ex-VC and startup accelerator who loves hacking MVPs.

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