Facebook advertising can be an effective way for businesses to reach potential customers. One key metric that advertisers look at is cost per 1,000 reach – that is, how much it costs to have their ads served to 1,000 viewers on Facebook. This metric allows advertisers to measure the efficiency and value of their ad spend.
What is Reach on Facebook?
Reach refers to the number of unique people who saw an ad on Facebook at least once over a given period of time. It includes people who saw the ad in their news feeds or on the right column of their Facebook page.
Having a high reach is important for brands because it indicates how widely their message and brand has been exposed to Facebook users. A higher reach means more eyeballs on an ad and therefore more potential for engagement and conversions.
How Does Facebook Calculate Reach?
Facebook calculates reach based on the number of unique users who have had impressions of an ad. An impression refers to when an ad is displayed, whether it was clicked or not. So if 1,000 different users saw an ad one time each, the reach would be 1,000.
It’s important to note that one user can generate multiple impressions. So if 100 people saw an ad 5 times each, that would result in 500 impressions but only 100 unique users reached. The reach metric eliminates duplications and gives advertisers an accurate sense of their true audience size.
What Impacts Facebook Ad Reach?
There are a few key factors that impact the reach of Facebook ads:
- Targeting – Narrow targeting parameters like location, interests, behaviors, etc. will limit reach to only users fitting those criteria.
- Ad Frequency – Showing fewer ads per user gives higher reach since you aren’t re-targeting the same users.
- Competition – High ad saturation in an auction-based system constrains reach for some advertisers.
- Engagement – Highly engaging, relevant, and interesting ads garner more reach.
- Ad Budget – Larger ad budgets allow for more impressions and reach.
How Much Does it Cost Per 1,000 Reach on Average?
Facebook advertising costs vary significantly based on many factors, but the average cost per 1,000 reach in 2022 is approximately:
- $7.19 per 1,000 reach for Facebook News Feed ads
- $28.43 per 1,000 reach for Facebook Right Column ads
However, advertisers have reported cost per 1,000 reach spanning anywhere from $1 to $50 depending on targeting, competition, and other factors.
What Influences CPM Costs on Facebook?
Some of the key elements that impact an ad’s CPM (cost per 1,000 impressions) on Facebook include:
- Targeting – Narrower targeting such as interests, behaviors, and demographics lead to higher CPMs.
- Landing Page Quality – Ads linking to high-quality, relevant landing pages receive lower CPMs.
- Ad Quality – High-converting ads with strong creative and messaging achieve lower CPMs.
- Competition – Ads in auctions against many competing advertisers drive up prices and CPMs.
- Ad Position – Right column ads cost more for higher placement while News Feed ads use auction-based pricing.
Optimizing these elements where possible allows advertisers to get lower CPMs and higher reach for their budget.
Tips to Lower Your Facebook CPM
Some best practices to reduce your cost per 1000 impressions on Facebook include:
- Use broader targeting settings like age, gender, location at country-level.
- Test different bidding strategies such as lowest cost per click.
- Split test ad creative, copy, formats, etc to find top performers.
- Only target warm audiences familiar with your brand, not just cold traffic.
- Use dynamic creative optimization to automatically identify high-converting creative.
- Set frequency caps of 1-3 per user to avoid oversaturating users.
- Advertise campaigns consecutively instead of overlapping timeframes.
Average Facebook CPM Rates by Industry
CPM rates can vary significantly based on your industry and niche. Some average cost per 1,000 impression benchmarks by industry are:
| Industry | Average CPM |
|---|---|
| E-commerce | $5.24 |
| Entertainment | $9.11 |
| Finance | $12.87 |
| Gaming | $7.62 |
| Healthcare | $6.28 |
| Hospitality | $4.91 |
| Legal | $13.54 |
| Real Estate | $10.83 |
| Retail | $6.38 |
| Travel | $8.06 |
It’s a good idea to research typical CPM rates for your specific business niche and vertical when estimating costs and setting targets.
The Importance of Detailed Targeting
One of the best ways to control Facebook advertising costs is through detailed targeting. By narrowing your target audience, you can significantly reduce waste and lower your CPM.
Some parameters to consider when configuring Facebook ad targeting include:
- Location – Target by city, region, radius around a location, etc.
- Demographics – Age, gender, relationship status, education level, income level, etc.
- Interests – Pages liked, groups joined, engagement with content on Facebook.
- Behaviors – Purchase activity, site visitors, app activity, travel preferences, etc.
- Connections – Target lookalike audiences modeled after existing converters and high-value customers.
Testing different targeting approaches allows you to hone in on market segments that deliver results cost effectively. Smaller, more precise audiences often achieve better CPMs.
How Budget Impacts Facebook CPM
The size of your overall advertising budget can impact your cost per thousand as well. Larger budgets and high ad spend levels tend to result in lower CPMs for a few reasons:
- Fixed costs like creative production and optimization are spread over more impressions.
- Volume discounts applied to high spend advertisers.
- Greater exposure and reach gains efficiencies.
- Algorithm favors better performance seen with bigger budgets.
Bigger budgets don’t automatically reduce CPMs, but they provide greater opportunity to scale reach in a cost efficient way.
Strategies to Get the Most from Your Budget
To maximize results from your Facebook ad spend, keep these tips in mind:
- Set specific CPM and ROI targets to constrain costs.
- Use Facebook’s auction insights to bid just enough to win auctions.
- A/B test ad creative, audiences, placements, and other elements.
- Optimize campaigns around lower funnel events like purchases or lead forms.
- Analyze results frequently and pause poorly performing ads.
- Take advantage of Facebook’s wide array of ad formats.
The most successful advertisers constantly measure, test, and optimize to control CPMs and get the best ROI from their ad investment.
Conclusion
Facebook advertising costs are driven by many variables, but a strong average CPM across most industries is around $7-$10 per 1,000 impressions. With factors like targeting, bidding, budget, ad quality, and optimization impacting costs, regular testing and monitoring is crucial.
By understanding the key influences on Facebook’s pricing model and taking steps to control CPMs, advertisers can effectively reach audiences and achieve marketing objectives on their budget.