Facebook Ads Audience WAY Too Expensive?

Summary

In 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.