What is Facebook CPM?

Facebook CPM is probably a term on Facebook that  is extremely familiar to marketers, especially individuals who have experience running ads. Mastering CPM will bring many benefits in terms of cost as well as advertising communication efficiency. So do you know what CPM is? If you are a beginner in the field of Facebook Marketing , join Accnine to immediately learn about the concept and instructions for optimizing Facebook CPM right in the article below. Let's get started!

1. What is Facebook CPM?

Facebook CPM stands for Cost Per Mile Facebook, which is the cost for 1,000 ads displayed on Facebook (not the cost of reaching 1,000 users). 

CPM is considered an important indicator in Facebook reports. The lower the Facebook CPM, the lower the advertising costs. On the contrary, the higher Facebook CPM, the higher the advertising cost. If your business's goal is to promote your brand, you need to consider Facebook CPM pricing.

Facebook CPM is calculated using the following formula:

CPM = (Total advertising cost/Number of ad impressions) x 1000

For example: If you spend a total of 200,000 VND and get 10,000 impressions, your CPM is 20,000 VND. 

CPM = (200.000/10.000) x 1000 = 20.000đ

2. Why is it important to understand Facebook CPM?

Deciding on Facebook CPM is very important, because this index affects the effectiveness of advertising, through identifying the cost of advertising. CPM is also a key indicator for brand branding campaigns, campaigns to increase interaction levels,...

Facebook CPM also determines the level of advertising visibility to users, this is one of the indicators to keep in mind when running Facebook ads .

For example: With an advertising cost of 100,000 VND, you can get 10,000 impressions. However, if advertising costs are reduced to only 80,000, the number of impressions can increase to 12,000 impressions. Thus, ads will have the opportunity to reach more users, making the advertising campaign more effective.

3. How much CPM is effective?

Actually, to compare prices, you need to know the market price of that product. Similar to CPM costs, to know how much Facebook CPM is reasonable, you also need to know the cost for the product industry you are running advertising for. If Facebook's CPM price is at the average level or within the allowable threshold for that product, it is cost effective. You can refer to the popular Facebook CPM costs for each industry as shown below.

If the CPM unfortunately exceeds the industry average, you need to review the ad or edit the audience file accordingly to help improve advertising effectiveness.

4. How to view CPM index on Facebook

To view the CPM index of Facebook ads, follow these steps: Step 1: Access Facebook Ads Manager .
 

Step 2: At the Columns button , select Traffic or Delivery.

Step 3: Slide the screen to the right, you will see the CPM column (Cost per 1000 Impressions), which is the specific cost of the ads you are running on Facebook.

5. Factors that determine Facebook CPM

As shared, Facebook CPM depends on the effectiveness of the ads you are running. Therefore, factors that affect advertising effectiveness will all affect Facebook CPM. 

• Target audience : audience is an important element of advertising goals. The more quality and relevant the audience, the higher the campaign's conversion rate.
• Advertising time: Advertising time also affects Facebook CPM. If you run ads during holidays or big sales, CPM may increase compared to normal days.
• Ad position (Facebook or Instagram): Each different ad position will yield different CPM. 
• Ad frequency cap :  The maximum number of times someone will see your ad.
• Content type: The ad's content format determines where it appears, so how often it appears will affect CPM. 
• Goals and optimization: optimizing for video views or mobile app installs means different goals will yield different CPM results.
• Budget: The maximum amount you're willing to spend on a campaign.
• Degree of campaign duplication: If you are running two campaigns at the same time, targeting the same audience, it may increase the cost of that audience.

6. Causes and ways to fix CPM out of control

6.1. Inappropriate campaign goals

Facebook will have a way to distribute ads for each appropriate advertising goal, so advertising goals play an important role in the frequency of display of ads and also how the target audience reaches and performs. action on your ad, resulting in Facebook CPM prices will also be affected.

For advertising campaigns whose goal is brand recognition/awareness, the ad will be shown as many times as possible to as many people as possible without taking action. However, with advertising campaigns whose goal is to perform conversion actions, such as texting or filling out registration forms, Facebook must reach a more suitable audience group, leading to Facebook CPM prices at In this case, it will be higher than other targets.

How to fix:

You need to determine the exact goal type of your advertising campaign before running ads on Facebook. As shared, each type of goal will result in different CPM prices. If your goal is brand awareness, then what you need to do is keep Facebook CPM prices from fluctuating too much. On the contrary, if your goal is interaction and conversion actions, you need to focus on other indicators such as CPC, CTR in addition to CPM.

6.2. Wrong target audience

Target audience is one of the most important factors when running Facebook ads . If you incorrectly target your business's potential customers, even though they may reach your ad, they will not be interested and that causes waste and meaninglessness. When it notices that ads are displayed a lot but there is no interaction, Facebook can "punish" by causing Facebook CPM prices to increase beyond control.

How to fix:

Clearly defining the target audience group is extremely important when you run Facebook ads with any goal, not just goals that need to pay attention to CPM index. Besides the usual demographic information, focus on analyzing your audience's preferences, behavior and the topics they are interested in so your ads can reach the right potential customers. .

However, if the audience file you are targeting is too small or detailed, it can also make the ad difficult to deliver, leading to high Facebook CPMs. In this case, you may need to use Facebook Lookalike Audiences.

6.3. Advertising content is not attractive

If you notice your ads aren't getting a lot of engagement or are simply not effective, despite your careful targeting, it could be because your Facebook ad content isn't making an impact. image to the viewer. Not to mention the technical optimization of the ad, the attractive ad itself will automatically attract people who approach it and create a certain level of interaction. When your ad is not attractive, customers can easily ignore the article and Facebook will evaluate this ad as ineffective, thereby limiting display and causing Facebook CPM prices to increase.

How to fix:

Advertising content includes 2 parts: image/video and text content. You need to make sure these two elements are linked together and especially that the image/video must be attractive and clear, because that is the first element that will attract viewers. Next, the text content must be effective enough to direct customers to take the action you desire, and that is why you cannot ignore CTA (call-to-action), you can choose Choose from Facebook's built-in CTA buttons or call in your own.

Increasing the interaction rate for the ad will help reduce Facebook CPM costs significantly, while also helping the advertising campaign bring better results. 

6.4. Ad display frequency is too high

One of the reasons why Facebook CPM prices increase but not many people know about it is the frequency of displaying ads too much.

The frequency of display ads plays a big role, too low a frequency will make customers not aware enough of your brand, but if the frequency is too high it will look like spam and make viewers uncomfortable. When you receive a lot of negative feedback or no one interacts with that article, your CPM price will increase.

How to fix:

You can fix this situation quickly by setting a limit on the frequency of displaying Facebook ads. Facebook will automatically reduce your budget when your ad reaches the limit you set.

6.5. Advertising time is not appropriate

If you run ads during promotional periods such as holidays, New Year, Christmas, etc., your ads will have to compete with other sellers. This means that CPM will increase significantly if you want your article to be prioritized for display compared to other articles, because the ad display location and display frequency are limited.

How to fix:

This cause is an objective cause, the impact of the market and external factors, so you can only monitor and choose the appropriate time as well as build strategic solutions to deal with the problem. this topic. It could be accepting higher costs to get priority display, or if the goal is awareness, you can adjust the ad frequency to control Facebook CPM costs.

7. Conclusion

Facebook CPM is an important indicator for Facebook advertising. Only when you firmly grasp and understand the nature and concept of CPM can you adjust and optimize advertising effectiveness, thereby achieving your communication and sales goals.

Hopefully through the article Accnine has shared, you will have more useful knowledge to  optimize Facebook advertising to serve your business's business process.