Facebook ad CPMs: What it is and how to maximize it
Lower CPMs (cost per thousand impressions) are desirable as it means reaching more people for the same amount of money and is a sign of good content quality.
In the advertising industry, lower CPMs (cost per thousand impressions) are generally considered desirable as they represent a more cost-effective approach to reaching a large audience. When a lower CPM is achieved, it indicates that a larger number of impressions can be obtained for the same budget, which means that the content is able to reach more people. Additionally, lower CPMs are often viewed as a sign of good content quality, as advertisers are willing to pay less for impressions when the content resonates well with its target audience and is perceived as engaging. This can make lower CPMs an attractive metric for advertisers, as it demonstrates that their content is effectively reaching a broad audience.
Broad targeting (age, gender, and location) is cheaper than specific targeting (interest groups, lookalikes, behaviors, etc.) as it provides fewer restrictions to the ad’s audience and allows for a better user experience.
Broad targeting, which refers to targeting based on characteristics such as age, gender, and location, is generally considered to be more cost-effective than specific targeting. This is because broad targeting provides fewer restrictions on the audience for an ad, allowing for a broader reach. This can result in a lower cost per impression or click, as the advertiser is able to reach a larger pool of potential customers. On the other hand, specific targeting based on interests, lookalikes, behaviors, etc., is more restrictive and therefore may reach a smaller, more specific audience.
Historically, this did result in higher engagement rates and conversions, as the ad is being shown to a more relevant audience. Facebook used to operate like Google Display and Programmatic, but now the end-user experience and behavior is how targeting works. Ultimately, the advantage of using these audiences became obsolete as Facebook adopted “Advanced Matching” and changed its algorithm in 2018. Since this change, inventory costs operate in a Game Theory economy, with a currency of attention, weighted by merit.