What is your CPM, why does it matter and how can you improve it?
One of the core metrics we always report on Meta campaigns is CPM, which is cost per 1000 impressions.
It’s one which clients don’t always understand - they know that, crudely, up is bad and down is good, and that it has something to do with how expensive their ads are. So, to give a bit of clarity on why this metric matters and what we do to influence it, we’ve distilled the highlights into a quick read.
Why does your CPM matter?
There is a core of ‘soft stats’ that we monitor on all accounts; click thru rates, costs per click and CPM, which give us an ongoing health check of campaigns and individual ads within them. In e-commerce, whilst the ultimate results might be number of conversions/cost per conversion/ROAS you’ll best find the opportunities to optimise those results by digging a little deeper.
Those key metrics which businesses care most about are impacted by the CPM. If it is costing more for a thousand impressions for your ad to be fed out than it needs to, it will push up your cost per conversion and lower your ROAS beyond where they need to be.
Depending on the season, and the account, on conversion campaigns we ideally like to keep all CPMs below £10-£15 (some will naturally fall much lower, some higher). What’s important is to monitor where your CPM is sitting and find a KPI which is realistic for your account. Depending on your audience, there will be natural times in the year when it increases, and then comes down again. Buckle up for Q4 when it will rise!
Expect CPMs to be higher on new campaigns and ads, and to lower as they bed in.
As well as using the CPM as a measure of how much your ads are costing, it’s a useful metric to look at cross platform to monitor where you are getting the most bang for your advertising buck. Again, the top level results of conversions, cost per conversion and ROAS will be your leading stats to compare, but it’s always important to keep an eye on the soft stats underpinning them.
How can you improve your CPM?
Understanding that your CPM needs to be kept as low as possible is one thing, being able to consistently keep it down is another. They can be very stubborn!
However, if you’re unhappy with the direction your CPM is moving, here are our top 3 areas to look at:
Ad creatives - Engaging, compelling ad creative will increase click thru and conversion rates and ultimately lower CPM. All campaigns need to be testing fresh, new creative to stay at the top of their game. Your winning creative today might not perform so well next week, or next month, so it’s important to always plan ahead and have something new in the wings.
Audiences - The better your campaign understands your audience, the more economical it will be. On campaigns with broader audiences, this may require some patience, but you can help it along by adding data in the shape of customer lists, email lists etc.
Ad frequency - Monitoring frequency and avoiding ad fatigue will help maintain an efficient CPM over time. Watch for creeping frequency, especially in campaigns with tighter audiences, such as retargets.
For fully optimised ads, you need to have one eye on your CPM, but campaigns have many moving parts, and getting all your metrics where you want them is an ongoing task. We’d recommend not obsessing over any one metric, rather understand the key ones and use them together to make informed decisions on optimisation.