How to Improve CPM on Facebook Ads

Seeing your Facebook Ads CPM climb can feel like watching your ad budget burn up with little to show for it. CPM, or cost per 1,000 impressions, is a core metric that tells you how much you're paying just to get your ad in front of people, and when it's high, it hurts your campaign's efficiency. This guide breaks down exactly what drives your CPM and gives you seven clear, actionable strategies to bring that cost down and make your ad dollars work harder.

What Actually Determines Your Facebook CPM?

While Facebook Ads operate on an auction system, it’s not purely about the highest bidder. Facebook's goal is to show users content they'll actually enjoy, and its ad algorithm rewards advertisers who contribute to that goal. Understanding the main factors that influence your CPM is the first step toward controlling it.

Your Target Audience

The more advertisers competing to reach a specific group of people, the more expensive it becomes. If you're targeting a highly sought-after audience - like new homeowners in New York City or C-suite executives - you're bidding against a lot of other companies. This increased competition drives up auction prices and, as a result, your CPM.

Ad Quality and Relevance

Facebook measures how relevant and engaging your ad is to your target audience. In your Ads Manager, you can check your "Ad-level diagnostics," which include:

• Quality Ranking: How your ad's perceived quality compares to other ads targeting the same audience.
• Engagement Rate Ranking: How your ad's expected engagement rate compares to others.
• Conversion Rate Ranking: How your ad's expected conversion rate stacks up.

Ads with high engagement, positive feedback, and low negative feedback (like users hiding your ad) are seen as high quality. Facebook rewards these ads with better auction performance, including a lower CPM.

Time of Year (Seasonality)

Competition naturally increases during peak shopping seasons. Think about major holidays like Black Friday, Cyber Monday, and Christmas. During these times, advertisers across all industries increase their budgets to capture consumer attention. This flood of ad spend makes the auction far more competitive, causing CPMs to rise for everyone, regardless of their industry.

Ad Placement

Where your ad appears matters. Some placements are more valuable and therefore more competitive than others. For example, an ad in the main Facebook or Instagram Feed is often more expensive than an ad in the Audience Network or Facebook Marketplace. While "Automatic Placements" is usually the best starting point, it's good to know that certain high-visibility spots come with a higher price tag.

Your Campaign Objective

The goal you set for your campaign also plays a part. Objectives focused on high-intent actions, like Conversions or Catalog Sales, target users who are more likely to make a purchase. Because this slice of the audience is more valuable, these objectives tend to have a higher CPM than top-of-funnel objectives like Brand Awareness or Reach, which are designed to reach a broader audience for a lower cost per impression.

7 Actionable Strategies for Lowering Your CPM on Facebook Ads

Now that you know what's driving your costs, you can start taking steps to lower them. These strategies focus on improving your ad's relevance, reaching your audience more efficiently, and working with the Facebook algorithm instead of against it.

Strategy #1: Expand Your Target Audience

It sounds counterintuitive, but sometimes your audience is just too small. When you hyper-target a very niche group, you create a tiny, competitive pool of users that drives up costs quickly. Instead of adding more and more restrictions, try broadening your targeting to give the algorithm more room to work.

• Go for larger Lookalike percentages: A 1% Lookalike Audience is your highest-quality match, but it's also the smallest. Test 3-5% or even 5-10% Lookalikes. This gives you a much larger audience that still shares traits with your best customers, which can significantly lower CPM.
• Layer interests, don't stack them: Instead of using "AND" logic to narrow your audience (e.g., must like golfing AND hiking AND fishing), create separate ad sets with broader single interests (one for golfers, one for hikers). This prevents you from creating an overly restrictive, expensive audience.
• Trust the algorithm with broad targeting: In some cases, you can go broad by targeting just by age, gender, and location, especially if you have a strong pixel with lots of data. With compelling creative, you let the ad itself filter for the right people, and Facebook's algorithm will get smarter about finding interested users over time.

Strategy #2: Level Up Your Ad Creative

Your ad creative is the single most powerful lever you can pull to improve performance. An ad that stops the scroll, grabs attention, and feels native to the platform will earn more engagement, leading to a higher relevance score and a lower CPM. People engage with content they enjoy, and Facebook will reward you for making that kind of content.

• Embrace short-form video: Content formatted as Reels and for Stories matches what users are already consuming. It feels less like an ad and more like organic content, which drives much higher engagement. Keep it fast-paced, design for sound-off viewing (with captions!), and hook them in the first three seconds.
• Use User-Generated Content (UGC): Ads featuring your actual customers feel authentic and build immediate trust. A simple video of a customer using your product can often outperform a polished, high-budget studio production because it's relatable.
• Test different formats: Don't stick to just single images. Try carousels to showcase multiple products or features. Use collection ads for a seamless shopping experience. The key is to find what format resonates best with your audience.

Strategy #3: Be Smart About Ad Placements

While letting Facebook automatically place your ads is often the best approach, it's worth checking your data to spot inefficiencies. Sometimes, a specific placement can silently inflate your CPM without providing value.

In Ads Manager, use the "Breakdown" menu and select By Delivery > Placement. Look at your CPM and other key metrics for each platform (Facebook, Instagram, Messenger, Audience Network) and each placement within them. If you see a placement with an exceptionally high CPM and no conversions, consider disabling it and reallocating that budget elsewhere. For example, the Audience Network is notorious for sometimes delivering cheap clicks but poor results, so test campaigns that exclude it.

Strategy #4: Use Social Proof to Your Advantage

Have you ever seen an ad with thousands of likes and hundreds of positive comments? That's social proof, and it’s incredibly persuasive. An ad with pre-existing engagement signals quality and trustworthiness, both to users and to Facebook's algorithm.

You can achieve this by using the "Use Existing Post" option when creating a new ad. Here’s a popular method:

1. First, run a new ad under a campaign objective like Engagement or Video Views. This is designed to cheaply rack up likes, comments, and shares.
2. Once the post has collected a healthy amount of social proof, pause that campaign.
3. Now, create a new Conversion campaign. At the ad level, instead of creating a new ad, select "Use Existing Post" and enter the Post ID of your highly-engaged ad.

Your conversion ad now starts its life with all the likes and comments already attached. This often leads to a lower CPM and a higher conversion rate because people trust what others already seem to love.

Strategy #5: Keep Your Ads Fresh to Avoid Fatigue

Ad fatigue happens when your audience sees the same ad too many times. They start to ignore it, engagement dwindles, negative feedback might increase, and Facebook responds by raising your CPM.

Keep an eye on the Frequency metric in Ads Manager. A frequency of 3-5 in a short period suggests it’s time for a refresh. Don't wait for your ads to burn out. Proactively combat fatigue by:

• Launching with multiple creatives: Start your campaigns with 3-5 different ad creatives in one ad set. This gives the algorithm options and keeps the audience experience fresh from day one.
• Using Dynamic Creative: This feature allows you to upload multiple assets (images, videos, headlines, descriptions, CTAs), and Facebook will automatically mix and match them to create high-performing combinations for different viewers.
• Rotating in new creative regularly: Have a backlog of new ad concepts ready to go. When you see your performance dip and frequency rise, swap in a fresh ad. It can be as simple as changing the background color or the main hook.

Strategy #6: Choose the Right Campaign Objective

It can be tempting to choose a cheaper objective like Traffic to get a low CPM, but this is often a false economy. Your campaign objective tells Facebook what kind of user to look for. If you select Traffic, Facebook will show your ads to people who have a history of clicking links, not necessarily buying things. Their CPM may be low, but their conversion rate likely will be too.

Instead, align your objective with your business goal. If you want sales, use the Conversions objective. While the CPM might be higher, you're paying a premium to reach users who are much more likely to complete a purchase, which almost always leads to a better return on ad spend (ROAS).

Strategy #7: Test, Analyze, and Iterate

There is no magic bullet for lowering CPM. What works for one brand might not work for another. The only way to find what works for you is through continuous testing.

Structure your tests to isolate one variable at a time so you know what's responsible for the change in performance. Here are some ideas:

• Audience Test: Pit a 1% Lookalike against a 5% Lookalike, or an interest-based audience against a broad-targeted one.
• Creative Test: Test a polished studio photo against a casual UGC photo. Or a 15-second Reel against a 60-second in-feed video.
• Copy Test: Try a short, punchy headline vs. a longer one that tells a story. Test out different Calls to Action.

Systematically testing these elements will give you the data you need to understand your audience and what they respond to, directly leading to better-performing, and more efficient, ads.

Final Thoughts

Lowering your Facebook CPM isn't about finding a single hidden trick, it's about shifting your approach to better align with what the platform values: a positive user experience. By focusing on broader audiences, creating engaging, platform-native content, and constantly testing your assumptions, you can create ads that people genuinely want to see, and Facebook's algorithm will reward you with lower costs and better results.

The foundation of a great ad is often great organic content. Before spending a dollar on ads, your social media feed is the perfect testing ground. This is where we built Postbase to make a direct impact on your workflow. Our visual calendar helps you plan, schedule, and analyze your best-performing organic content across all platforms. By seeing what Reels, videos, and posts are already getting traction with your followers, you can easily identify winning creative that’s ready to be turned into a high-performing, low-CPM ad.