When you first think about running Facebook Ads you may wonder what factors will affect the cost of the Ads. In this article, we'll cover 3 main factors that influence the CPM.
Relevance score is known to be one of the most important factors that influences the CPM. Relevance score shows to what extent Facebook users will be interested in your Ads. Relevance score is calculated by the Facebook algorithm. The maximum you can reach is 10/10 that would mean that your Ads efficiency is very high, while the minimum 1/10 means that your advertising strategy better to be changed urgently. As you understand, the higher the Relevance Score, the lower the CPM. Relevancy Score is calculated by "positive" and "negative" actions that Facebook users perform. You earn a higher Relevance Score when people like, comment, save, share your Ad, in other words, they show interest in your Ads. In case they ignore, scroll down, complain about the Ads you're losing Ads scores. If reducing the CPM is what you're aiming at, pay attention to the people you target. The audience is a crucial moment when it comes to the Relevance score. Target the people who're definitely interested in your product to increase audience engagement. As an option, you can use LeadEnforce.com not to be mistaken with the target audience.
Estimated action rates indicate how likely people will take action when they see your Ad. Quite often, advertisers offer you to download an app/book/guide, click on the landing page link, call or text to the advertiser, fill the form and so on. Facebook takes into accounting all these actions and of course it affects your Ads cost. That's partly similar to Relevance score algorithm - the better the audience engagement, the lower the CPC. The main advice - make sure your call to the action is clear.
Facebook Ads bidding is kind of an auction. You'll have to compete with other advertisers for Ads displays. Your bid is the highest cost that you're ready to pay for the impression. Let's imagine that several advertisers lay claim to the only Ad placement that Facebook has. They all made their own bet:
- Advertiser 1 - $3
- Advertiser 2 - $5
- Advertiser 3 - $10
The lowest bidder advertiser most likely either doesn't receive impressions, or they will be very few. Advertiser 2 and Advertiser 3 are the main competitors. Advertiser 2 will get a significant amount of impressions for the cost between $3 and $5. Advertiser 3 will get the highest number of impressions but he'll pay between $4 and $6 per each. In any case, there's no way he will pay $10. That's a simplified example of how Facebook Ads bidding works. By the way, relevance score and estimated action rates also affect whether or not your bid wins.
We hope you'll take into consideration these 3 main factors and work out Ads strategy that will blow everyone's mind.
