When running a social media ad campaign, it is essential to track ad spending to determine if your Facebook ad costs are producing a return on the investment. But how can you accurately measure this? Facebook CPM is the metric you will want to check in this situation. It will help you optimize your spending and determine your Facebook ad campaign's performance. This post will outline everything you need to know about your Facebook advertising costs and how to improve your average CPM


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    Templates using this KPI

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    Integrations using this KPI

What is a Facebook CPM?

CPM stands for ‘cost per mile and indicates how much you spend on average for 1,000 ad impressions. If you want your ad seen by most of your target audience, you must ensure that your Facebook ads' CPM is optimized for the best conversion rate. This metric is not confused with Facebook CPV—cost per view for video ads, or CTR—the click-through rate.

Optimizing for Facebook CPM is an option to select within your Facebook ads manager, telling Facebook you want to spend your ad budget on getting your digital marketing campaign out to the most audience members to enhance your brand awareness, deliver your campaign objectives, and appear on the news feed of your custom audience. 

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How to calculate Facebook CPM

To calculate your CPM, Facebook determines the total amount you spent on your ad set, divides it by the number of impressions you got, and multiplies it by 1,000. See the formula below. 

Facebook CPM formula


(Total ad set spend/number of impressions) * 1,000

What is a good Facebook CPM?

Determining a good CPM will differ across industries. Still, there are benchmarks in various sectors that you can measure against your average cost to determine if your ad performance is successful or if you need remarketing strategies. Overall, the average Facebook CPM across all industries is around $14.40. However, in an industry like general retail, it is only $1.38 and goes as low as $0.78 for entertainment. 

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What is a bad Facebook CPM?

A bad Facebook CPM is one where your ad placements and engagement rates are not returning on your ad spend. The point of advertising is to increase business; if it isn’t doing that, you need to run ads or change your approach to reach the right audience. If you are in the negatives on your ad spend, figure out if you are pitching to the right demographics or if you are making selections on your ad settings that fail to succeed in facebook’s algorithm.

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Facebook CPM KPI examples & templates

Your Facebook CPM can be added to multiple different types of reports. Here are some of them:

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Social media report template Social media report template

Our social media report template has everything you need to get your marketing team started quickly: it’s pre-built with the standard social media metrics and KPIs you need, and it’s fully customizable so that you can visualize the data you want, the way you want. From tweets to Instagram analytics stats and hashtags, you'll be able to track your entire social media performance at a glance.

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Hotel marketing report template Hotel marketing report template

Make marketing and sales reporting a breeze with our sales report template. You can keep on top of your bookings, ad campaigns, organic search results, social media presence, and more with customizable reporting templates. Use DashThis to quickly and easily create your sales and marketing reports so you can spend more time on marketing activities and sales operations. 

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Community management report template Community management report template

Track all your social media performance, and show your social media strategy results to your boss in no time! Spend less time reporting and more time on growing your community with this all-in-one community management report template.

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Facebook CPM best practices

If your Facebook CPM isn’t performing for you, consider the following tips. 

Facebook CPM best practices

step 1 icon Avoid Ad fatigue

If your target Facebook users see your ad too often, they will inevitably ignore it, and you won’t get any link clicks. Determining what number of times is optimal takes testing, but ad fatigue could be responsible for the plateauing performance and ineffective Facebook CPM. Play around with your ad frequency numbers to keep your ad relevance boosted and your lower CPM within reach.

step 2 icon Focus on retargeting

You are making the most of lead generation and Facebook Pixel by emphasizing retargeting. Using your ad accounts, you can engage users who have already shown interest in your product and make the most of ‘warm leads.’

step 3 icon Conduct A/B testing

Figure out what works for your ad campaigns. Adjust your SEO, call to action (CTA), landing pages, and more to conduct a split test to see which formats perform better. This will help you boost your eCommerce strategy and narrow down what is and isn’t working between your lookalike ads.

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