If you are running Facebook ads right now. You may be seeing a slight increase in your ad spend. What does that mean? How do you measure it? And of course how to get over that expensive curve? Statistics as of the late 2021 state that Facebook's average CPMs have increased by an additional 34% in the last 12 months. Read the blog below to understand how this is measured and what you can do to combat this!
measuring expensive ads
The number 1 feature to measure expensive ad costs used in the metrics of the Facebook ads manager is CPM (or Cost Per Thousand Impressions).
This is the measurement of how much it costs in the auction for placement. So every 1,000 impressions, it will cost you $X amount of dollars to have your ad shown.
Impressions are the number of times your ad is shown to an audience. 1,000 impressions means your ad was shown 1,000 times.
This feature is a perfect indicator of how much competition is in your market. A CPM of about $40 means your market's competition is high for the audience you are targeting.
A CPM of $13 means your market's competition is weak. Therefore it won't cost as much to show your ads.
how to make your ads cheaper
Facebook has a rewarding platform (most marketing platforms do) that will reward you for performance.
So if you ad shown to a market cost around a $20 CPM and you are getting clicks for $4 per click (.4% Click-Through-Rate or CTR) then because your CTR is low you are spending about $4 per click.
Now let's say that out of those 1,000 impressions you get 8 clicks. If you are getting 8 clicks that means your CTR is .8% and thus your Cost Per Click(CPC) is roughly $2 per click.
You just sliced your cost in half by increasing your click through rate.
Your click through rate increased maybe because you changed your ad, or your copy and drove more people interested in clicking.
So what I am trying to say is if you have high performing ads, you increase your chances of the campaign generating results cheaper than your competition because your ad and "offer" is on point.
Here are some of the best ways to make your ads cheaper.
1. Change your Offer
2. Change your Copy on the Offer
3. Change your Image or Video
4. Target a different market whose more interested in your offer
You have to understand that coming right out of the gate will most of the time not generate you the best results. You need to test and retest your offers, messaging and creatives to maximize your performance.
You will eventually dial it in and generate cheaper and cheaper results while leveraging the platform.
Remember... Getting the best bang for your buck (positive Return on Ad Spend or ROAS) is the number one goal.
Scale your campaigns by increments of 25-50% based on your positive ROAS and then focus on improving your ad.
If you want to learn how to better improve your ad performance click here for a formula my clients use for building relationships with their audience using Facebook ads.