Facebook Ads Audience WAY Too Expensive?
Summary
TLDRIn this video, Ben Heath from Lead Guru identifies six key reasons why Facebook ads may be too expensive, focusing on high CPM issues. He discusses factors like audience size, competition, seasonality, ad placements, geographical targeting, and ad engagement. Heath provides actionable advice on how to address these issues, such as increasing audience size, broadening targeting, adjusting budgets seasonally, diversifying ad placements, expanding geographical reach, and improving ad creativity to lower CPMs and enhance ad performance.
Takeaways
- 📈 Your Facebook ad's cost per thousand impressions (CPM) can vary greatly and is a key metric for assessing audience cost-effectiveness.
- 🌍 CPM is influenced by factors such as advertising location and industry, with the US generally having higher CPMs compared to places like India.
- 🔍 A high CPM could indicate a small audience size, limiting Facebook's flexibility in ad placements and leading to higher ad frequency and costs.
- 🏁 Increasing audience size can help reduce CPM by giving Facebook more options for ad placements and reducing the frequency of impressions per person.
- 💥 Intense competition for a specific audience can drive up CPM, as there are many advertisers vying for a limited, high-value audience.
- 🎯 Broadening your target audience beyond a highly competitive niche can potentially lower CPM and uncover new market segments interested in your product.
- 📅 Seasonality can affect CPM, with certain times of the year being more expensive due to lower consumer interest or demand for products or services.
- 🗓 Adjusting ad spend according to seasonality, by reducing budgets during low-demand periods and increasing during high-demand periods, can optimize CPM.
- 📍 Geographical restrictions can lead to high CPMs, especially if focusing on major, expensive cities. Expanding to less competitive locations can reduce costs.
- 📺 Restricting ad placements to certain platforms or formats, like Instagram only, can increase CPM. Diversifying ad placements can help lower costs.
- 🎨 Engaging ads that resonate with the audience can lower CPM as Facebook rewards advertisers with lower rates for ads that enhance user experience.
Q & A
What is the main topic of Ben Heath's video?
-The main topic of Ben Heath's video is explaining why Facebook ads audiences might be too expensive and how to fix those issues.
What does CPM stand for in the context of the video?
-CPM stands for Cost Per Mille (or Thousand), which is the metric used to assess how expensive an audience is to reach in terms of how much it costs for a thousand views on ads.
Why might a high CPM be an issue for advertisers?
-A high CPM might be an issue because it indicates that it is more expensive to reach the target audience, which can lead to higher costs for advertising campaigns without necessarily better results.
What is one of the factors that can significantly affect CPM according to the video?
-One of the factors that can significantly affect CPM is the location of the advertising, with certain locations like the US being more expensive on a CPM basis than advertising in other countries like India.
What is the first reason Ben Heath gives for an expensive Facebook ads audience?
-The first reason given for an expensive Facebook ads audience is that the audience size might be too small, which reduces flexibility for Facebook to target and increases the cost of advertising.
What is the second reason for high CPMs mentioned in the video?
-The second reason for high CPMs is the high level of competition for the targeted audience, especially when the audience is small and in high demand.
How can seasonality affect CPMs for Facebook ads?
-Seasonality can affect CPMs by making certain times of the year more expensive to advertise due to higher demand or less interest from consumers, which Facebook picks up on and charges more to reach the same audience.
What is one strategy to address high CPMs due to seasonality?
-One strategy to address high CPMs due to seasonality is to spend less during less favorable times of the year and allocate more budget to times when results are likely to be better, thus averaging out the cost over the year.
Why might advertising only on Instagram lead to higher CPMs?
-Advertising only on Instagram might lead to higher CPMs because recent data suggests that it is more expensive than advertising on Facebook, with costs being 30-35% higher for the same number of impressions.
What is the sixth reason for high CPMs mentioned in the video?
-The sixth reason for high CPMs is that the ads themselves might be boring and not engaging, which Facebook punishes with higher CPMs as they prioritize user experience and engagement on their platforms.
What does Ben Heath suggest to improve ad engagement and potentially lower CPMs?
-Ben Heath suggests focusing on more dynamic creative elements such as slideshows and videos to grab people's attention, which can help reduce CPM and improve the cost of advertising to the same audience.
What service does Ben Heath's company, Lead Guru, offer in relation to Facebook and Instagram advertising?
-Lead Guru specializes in creating, managing, and optimizing Facebook and Instagram campaigns for clients with a budget of 3k per month or more.
How can potential clients of Lead Guru get in touch to discuss their advertising needs?
-Potential clients can book a free call with one of Lead Guru's team members through a link provided in the video description to discuss their advertising needs without any obligation.
Outlines
💡 Understanding High CPM in Facebook Ads
Ben Heath from Lead Guru introduces the topic of high cost per thousand impressions (CPM) in Facebook ads. He explains that CPM is a key metric for assessing audience cost and shows a range of CPMs in an ad account. He notes that CPM can vary greatly and is influenced by advertising location and industry. Ben emphasizes that while high CPMs are common in the US, there are ways to address this issue, such as increasing audience size to give Facebook more flexibility in ad placement and to reduce the frequency of ad impressions on the same users.
🔍 Factors Influencing Expensive Ad Audiences
The video script discusses six reasons for high CPM in Facebook ads. The second paragraph delves into the first two reasons: a small audience size which limits Facebook's ad placement flexibility and increased competition for a desirable audience segment, both of which can drive up CPM. Ben suggests broadening the audience targeting and testing different groups to find those who are interested and can afford the product, potentially leading to a lower CPM and more sustainable ad campaigns.
📈 Seasonality and Ad Placement Affecting CPM
The third paragraph addresses seasonality as a factor that can increase CPM due to lower consumer interest during certain times of the year. Ben advises adjusting ad budgets according to seasonal trends, spending less during slow periods and more during peak times to optimize costs. He also touches on the impact of restricting ad placements, such as focusing solely on Instagram, which can be more expensive than Facebook. Expanding ad placements to include Facebook can help reduce CPM.
🌐 Geographical Targeting and Ad Engagement
The fourth paragraph continues with reasons five and six for high CPMs: geographical targeting limitations and lack of ad engagement. Ben points out that focusing on expensive locations like big cities can increase CPM and suggests testing less expensive areas. He also highlights the importance of ad creativity and engagement, stating that Facebook rewards advertisers with lower CPMs for ads that resonate well with users, thus improving the overall ad performance.
🤝 Lead Guru's Facebook and Instagram Advertising Services
In the final paragraph, Ben introduces Lead Guru's specialized services in managing Facebook and Instagram ad campaigns. He invites viewers with a budget of 3k per month or more to book a free consultation call to discuss how Lead Guru can help optimize their ad strategies. Ben also encourages viewers to engage with the video by liking, commenting, and providing feedback.
Mindmap
Keywords
💡Facebook Ads
💡CPM (Cost Per Mille)
💡Audience Size
💡Competition
💡Seasonality
💡Ad Placement
💡Geographical Targeting
💡Engagement
💡Ad Creative
💡Lead Guru
💡User Experience
Highlights
Six reasons for expensive Facebook ad audiences and solutions to fix them.
High CPM (cost per thousand impressions) can be an issue solved by understanding audience targeting.
CPM varies significantly and is affected by advertising location and industry.
US advertising tends to have higher CPMs compared to other locations like India.
Audience size affects CPM; smaller audiences can lead to higher costs and frequency issues.
Increasing audience size can help reduce CPM and improve ad performance.
Competition for a highly sought-after audience can drive up CPM.
Broadening audience targeting can reveal new customer segments with lower competition and CPM.
Seasonality impacts CPM, with some times of the year being more expensive for advertising.
Adjusting ad spend according to seasonality can optimize CPM and campaign performance.
Restricting ad placements, like only using Instagram, can increase CPM.
Expanding ad placements to include Facebook can reduce CPM compared to Instagram.
Geographical targeting restrictions can lead to higher CPMs; testing other locations can help.
Engaging ads with high user interest are rewarded with lower CPMs by Facebook.
Boring or unengaging ads can result in higher CPMs due to reduced user interest.
Lead Guru offers Facebook and Instagram advertising services for businesses with a budget of $3k per month or more.
Book a free call with Lead Guru to discuss advertising services and campaign optimization.
Engagement and creative quality are key factors in reducing CPM and improving ad effectiveness.
Transcripts
hi guys it's ben heath from lead guru
and in this video i'm going to give you
six reasons why your facebook ads
audience is too expensive i'm also going
to show you how you go about fixing
those issues if you're seeing really
high cpm so i'm going to get into that
more in a minute that's an issue and
it's an issue that can often be solved
that's what we're going to be covering
in this video before we're going to very
quickly answer hit that like button
that'd be much appreciated and really
help me out okay so i'm in one of our ad
accounts and i've sorted these campaigns
by cpm by cost per thousand impressions
now that's the metric that we're
basically always going to use when we're
assessing how expensive an audience is
to reach how much does it cost you to
get a thousand views on your ads when
targeting that audience okay and you can
see from this column here that the cost
per thousand impressions varies
massively right at the top here we've
got 35 almost 36 pound cpm that's really
quite expensive all the way down to five
pound fifty six pound thirty eight that
sort of thing which is much well far far
far less expensive okay
and
i do need to very quickly state that
your cpm is going to be affected
significantly by where you're
advertising and what you're advertising
certain industries have higher cpms
certain locations
the us is going to cost a lot more per
cpm
on a cpm basis than advertising in india
for example that's just
a fact
nothing you could do about that so
working out what a high cpm is for you
is going to be somewhat relative and
you're going to have to look at
potentially how your campaigns are
performed historically versus the new
ones maybe you know other people in the
industry you can compare with that sort
of thing but we often see
facebook advertisers coming up with cpms
often in the us
which is probably the most expensive
market to advertise it that's
60 70 even 80 cpms and these are
monstrously high in my opinion cpm's
they're a problem that's a problem there
are things you can do about it okay so
why might your cpm be much higher than
it should be first reason is because
your audience is too small if your
audience is too small facebook has a lot
less flexibility around which
who they can advertise to so you're
basically forcing it you're having to
bid against the advertisers and having
to advertise to those people because
facebook's going okay well those people
are really expensive right now they
can't do this right they can't go those
people are really expensive right now
but those over there are far less
expensive let's go with those over there
they can't do that because they don't
have as much flexibility
um
it also means that you rack up multiple
impressions per person you get a higher
frequency number so once people start to
see your ads again and again they become
disinterested facebook doesn't like that
they charge you more as an advertiser um
in order to advertise to people multiple
times than just the ones
and you end up with higher cpm so the
simple answer there is increase your
audience size and i'll include a link in
the video description below to a video
all about facebook ads audience size
what i recommend it's not very long
strongly recommend you go through okay
so that's reason number one
reason number two is that there's tons
of competition for whoever you're
advertising to i often talk to
advertisers that i'm like oh we want
only one to reach really high net worth
individuals and you look at their
product and maybe it's a little bit on
the expensive side but you think but
there's a lot of people that don't have
to be really high net worth individuals
to afford this and might be interested
or maybe they just decide to spend a
large proportion of their budget on this
particular thing because that's what
they're really into
and you know if you just try and reach
the top one percent or even smaller
fractions within that that audience is
incredibly expensive to reach why
because that audience has a lot of money
it's in demand a lot of other
advertisers
there are other examples but that's
probably the most common what can you do
about it potentially try advertising to
other people don't just get fixated on
we only have to reach this specific
small audience that we know is
interested or know is right at the top
end of the market
there may be other people that would
happily buy your products and services
that don't necessarily fit into that
criteria
and this can often work in conjunction
with the two smaller audiences test
broadening things out right test
advertising to other audiences the worst
you'll find out is that it doesn't work
which might cost you a bit of money but
it's absolutely worth it because the
potential upside of going oh actually we
thought we
only wanted to advertise to the top one
percent of net worth individuals but
actually if we advertise to the top 15
or 20
those people can afford our product and
they're happily buying it and that's
amazing because that gives us so much
more audience to advertise to that gives
us um a much lower cpm and um
much more longevity on your facebook ad
campaigns all that sort of stuff so
don't get fixated necessarily on a
specific audience that may have a ton
and i mean a ton of competition because
there are audiences that are just
bombarded how can you work around that
how can you target other audiences worth
thinking about reason number three is
seasonality okay
are your cpms much higher right now
because this is not the best time of
year to be advertising your products or
services people aren't that interested
facebook is picking up on those signals
and they're charging you more to reach
the same amount of people
this happens to a lot more businesses
than people think
um
how do you go about addressing that i
wouldn't recommend that there are times
of years when well i would rarely
recommend not advertising for certain
times of the year but what we will often
do once we've established that there is
a high degree of seasonality within an
industry is we might spend significantly
less during certain parts of the year
like if you know that people aren't as
interested in your business through the
winter months perhaps you drop your
budgets down to
15 20 25 of what they usually are for
those months keep things ticking along
keep those warm audiences and being
advertised and things like that and then
you take that budget that you've saved
during the three four winter months
let's say and you
absolutely
smash it out the park in the summer by
spending a lot more and loading budget
into months where you know your results
are likely to be much better
you will see this in your cpm data
obviously you'll see it in your cost per
conversion things like that but if
you're thinking why did our audience get
expensive all of a sudden you go yeah
well we're selling something that
there's more demand through the summer
months than there is in the winter
months and and maybe that's what yes
that can be why it's not just going to
affect your cost per conversion it'll
also affect your cpm by weighting budget
more towards the better times of the
year you'll have much better cost per
version you will also find that when you
average it out over the year your
audience is cheaper to advertise to even
though this is the exact same people one
of the nuances of how facebook
advertising works
reason number four for overly high cpms
an aggressively expensive facebook ads
audience is are you restricting where
you're putting your ads too much one of
the classic cases here is just
advertising on instagram now new data
has come out recently that is
might be quite shocking to some people
for those of us that live and breathe
this it's it's it's not but instagram is
now more expensive than facebook to
advertise on
for the cpm number that we've been
talking about in this whole video to get
a thousand impressions on say instagram
feed it's gonna cost you a good chunk
more 30 maybe 35 percent more than it is
on facebook so are you just advertising
on instagram because you think that's
where your audience is or just
advertising on say instagram stories
because you think that's the best
placement try opening it out try opening
up other locations particularly adding
facebook back into the mix if you've
previously written it off that might
really help reduce your cpms make your
facebook ads audience much less
expensive and give you better results
reason number five is that much in the
same way that you don't want to
necessarily get fixated advertising to a
small group of people from a targeting
standpoint you also don't want to get
fixated on just advertising in certain
locations i've talked to a lot of
advertisers they're like oh we know that
our um
best customers come from cities like la
or new york
yeah okay i understand that but
those are the most expensive places to
advertise to in the world and facebook
is sophisticated enough to work out that
someone living in
um you know rural wisconsin might be
really interested in the product that
you offer and advertising to that person
is going to cost you a fraction of what
it costs for you to advertise to someone
in la um and that might be a much better
result for your business so if you
haven't already tested it and you're
seeing really high cpm's really
expensive facebook ads audiences
definitely try opening in other
geographical locations particularly ones
that aren't big cities or less expensive
states there are far less expensive
states than for example california and
new york um in the u.s
you can even have it expand to other
countries we've
worked with this on lots of clients
where they're only advertising in say
the us canada uk australia and we go
well you know we could advertise to
other european countries maybe other
asian countries are still going to be
demand for your products but they're
going to sell a lot better now this will
only work for certain businesses because
i'm not saying you should advertise out
of where you can deliver your product or
service that might be a real local area
in which case that's fine but something
to keep in mind and last but not least
reason number six is that your ads are
boring facebook really care about the
user experience on facebook and
instagram if your ads are boring if
they're not engaging
punishes advertisers with higher cpms
they're like yeah you can advertise that
but our audience doesn't like it we
don't want them to be bored or
annoyed by your ads on the platform
therefore you can advertise but we're
going to charge you more for it
conversely if your ads are really
engaging the creative is grabbing people
there's lots of people watching it you
get rewarded as an advertiser with lower
cpms facebook's going okay well look we
know you're running an ad but we can see
that people love this we really want to
put things in front of people that in
front of our users that people love
that's fantastic this is super i'm super
happy about this let's go ahead and
reward you with lower cpms so people
think that cpms and expensive facebook
ads audiences is all about the audience
itself and often it is about the
audience but it can also be about the
ads those engagement signals are really
really important so if perhaps you've
been going through the other reasons and
you've gone like no i'm advertising to
broad audiences i'm doing this i'm doing
that i've done all things recommended
what's going on well it could well be
your
ads
are they just boring no one cares no one
wants to look at them not no one that's
probably too harsh but you know what um
you know what i mean they're not
engaging enough focus on that
more dynamic creative slideshows videos
get people's attention that could help
reduce your cpm reduce your um the cost
of advertising to the same people the
same facebook ads audience and help you
improve your results
okay so before you go something i'll
quickly mention and that's our facebook
and instagram advertising services so my
company lead guru is a specialist
facebook and instagram as agency we
create manage and optimize facebook
instagram campaigns for our clients if
you have a budget of 3k per month or
more and you're interested in finding
out more about our service what you
should do is book a free call with one
of my team members there's a link in the
video description below no obligation
call you can find out more about us we
can find out more about you see if we'd
be a good fit and hopefully we get a
chance to uh to work together and thanks
for watching guys please hit that thumbs
up button uh comment below to let me
know if you've got questions comment
below with feedback was this useful et
cetera et cetera and i'll talk to you
soon
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