There is a rise in CPMs on Facebook Ads – Here’s What You Can Do

During a recent performance deep dive, we spent some serious human hours combing through months of campaign data to better understand what changes may have impacted increasing CPMs on Facebook.

As we compared data points from multiple verticals and clients, the usual suspects emerged: seasonality, ad fatigue, small audience sizes, facebook algorithmic changes, and increased competition to name a few.

Further research revealed a Quarterly Benchmark Report by AdStage.io. Their client research of over 100 advertisers showed a dramatic increase in CPMs - a whopping 90% year over year in 2019. Woof!

It's worth noting that as a primary metric, Cost Per Impression does have some inherent flaws. We hope it tells us how much it will cost for us to get 1000 eyeballs on our ads, but that isn’t always the case. Sometimes we are paying for the same eyeballs multiple times. Depending on the type of campaign you’re running, that may or may not be a problem. Other times, the eyes aren’t even human or - worst case scenario - the ads never reach their destination. But it remains as one of the most relevant advertising data points since the dawn of the internet’s banner ads age. And no matter how much you fight it, as a performance marketer or brand advertiser, you are still married to it.

 

While there are factors we can’t control such as rising competition and facebook’s algorithms, here are things we can do to improve CPMs:

  1. Explore broader audiences
    Getting too specific with your segments may actually be hurting you. If you're targeting niche categories, there's a good chance that other advertisers are doing the same.
  2. Geographic expansion
    If your business is ready for worldwide domination, emerging markets can be much more attractive and affordable.
  3. Diversify your creative assets
    Leverage gifs and video to expand your reach and evaluate whether previously excluded placements may be worth reinvesting in.
  4. Re-evaluate the entire media mix
    Do this quarterly. Take a step back and consider whether your overall channel performance may have become a part of a self fulfilling prophecy of investments. If I put $X in Y Channel, and received Z sales - then I must continue investing in Y. However, it might be worth investing in channels A, B, or C instead of risking diminishing returns.
  5. Or finally, reach deeper into your pockets
    The age old rule of “‘you get what you give”. However this last option isn't always ideal for clients.

 

It’s easy to feel bogged down by facebook’s algorithm and the increased competition in the digital ads space. The good news is that there are still ways to improve your campaigns and boost your CPM marketing. We’ll continue to paddle aggressively upstream and keep you posted on where it takes us.