Facebook and Instagram Ads cost different for each business. This is because each advertiser is targeting different audiences with different ad types.
The first thing that goes into seeing how much an ad is going to cost is the CPM (Cost per 1,000 impressions).
An impression = every time that your ad is in front of someone. However, this doesn’t mean 1,000 people have seen your ad. It means that your ad has been seen 1,000 times but some people may have been shown the ad multiple times. If you really want to look at how many people have seen your ad then you need to be looking at reach, but I’ll save that for another day.
In order to really help your CPM, you need to understand the three things that go into it. Those three things are:
- audience size (aka the number of people in your target audience)
- how many other businesses are bidding on the same audience, and
- how relevant your ad is (aka your creative) to you target audience
You have no control over how many other businesses are bidding on the same audience so that is not one you should worry about. The other two, however, you can control to help bring your CPM down. The lower your CPM is the less you will pay.
Let’s chat about audience size.
The “right” audience size varies greatly depending on the type of business you are and who you are targeting. However, if you are going after cold audiences, then you need to make sure to check the “meter” when setting up a Facebook ad. This “meter” should be in the green meaning that your audience is broad enough that Facebook has enough people to serve your ad to.
Making sure that your audience is broad enough will help you drive down CPM. On the flip side though, you don’t want the audience to be so broad that your ads don’t resonate with your audience. Remember, your message needs to relevant to your audience.
This leads us to the next topic: relevancy score.
This score will tell you how much your target audience cares about your ad. If you relevancy score is high, and you are getting good engagement on your ad then Facebook typically will reward you with a lower CPM.
And there you have it. Those are the variables that go into determining how much your Facebook & Instagram ads cost.
If you’d like to learn more about how to use Facebook & Instagram ads to grow your business, check out this free training:
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