Facebook ads can be an extremely effective way to reach a large audience on Facebook and Instagram at a relatively low cost. But how much exactly does it cost to reach 1,000 people with Facebook ads? The answer depends on several factors.
Factors That Influence Cost Per 1,000 Impressions
There are a few key factors that will influence the cost to reach 1,000 people (also known as the CPM or cost per 1,000 impressions) with Facebook ads:
- Audience targeting – Targeting a more niche audience tends to cost more per impression than targeting a broad audience.
- Placement – Running ads on Instagram only can be more expensive than running ads across Facebook and Instagram.
- Ad quality – High quality ads with compelling creative tend to have lower CPMs.
- Competition – If many advertisers are competing for the same audience, costs will be higher.
- Industry/vertical – Some industries like finance or insurance tend to have higher advertising costs.
- Time of year – Costs fluctuate based on market and seasonal demand.
Optimizing these factors, especially audience targeting and ad quality, can help reduce CPMs over time. But there is no one-size-fits-all answer, so testing is crucial.
Average Cost Per 1,000 Impressions Benchmarks
According to Facebook IQ, the average CPM across Facebook ads in 2021 was $7.19. Here’s how CPMs break down across some of the most common objective types:
| Objective | Average CPM |
|---|---|
| Brand awareness | $4.03 |
| Reach | $6.70 |
| Traffic | $2.82 |
| Conversions | $9.65 |
| Video views | $8.19 |
So based on these benchmarks, the cost to reach 1,000 people ranges from around $2.82 on the low end for traffic campaigns up to $9.65 for conversion campaigns. Of course, costs vary significantly based on other factors like targeting and quality.
Cost Example Breakdown
Let’s look at a hypothetical example to get a sense of real CPM costs.
Say you create a conversion campaign to promote an ecommerce store, targeting a broad audience in the US interested in fashion. After testing different creatives and audiences, you optimize the campaign to have the following stats:
- Audience size: 60,000,000
- Impressions: 100,000
- Clicks: 2,500
- Conversions: 125
- Spend: $1,000
With 100,000 impressions and $1,000 in ad spend, the CPM would be $10 ($1,000 / 100,000 * 1,000). So the cost to reach 1,000 people for this campaign would be $10.
At that rate, let’s break down the costs to reach larger audience sizes:
| Target Reach | Estimated Cost |
|---|---|
| 1,000 | $10 |
| 10,000 | $100 |
| 50,000 | $500 |
| 100,000 | $1,000 |
| 500,000 | $5,000 |
| 1 million | $10,000 |
So in this example, to reach 1,000 people it would cost around $10. To increase that reach to 1 million people, the estimated cost would be $10,000.
How to Calculate Cost Per 1,000 Impressions
Figuring out your actual CPM costs for a Facebook campaign is simple. Take your total ad spend and divide it by your total number of impressions, then multiply by 1,000. For example:
Ad spend: $5,000
Impressions: 500,000
$5,000 / 500,000 = $0.01 per impression
$0.01 * 1,000 = $10 CPM
You can find your campaign’s impressions, clicks, spend, and other key stats inside the Facebook Ads Manager platform under the “Results” column.
How to Reduce Your CPMs on Facebook Ads
Here are a few tips to help reduce your CPM and lower your cost per 1,000 impressions on Facebook ads:
- Refine your audience targeting – Target by interests, behaviors, demographics, etc.
- Test different creatives – Ad copy, visuals, video all impact CPM.
- Analyze high vs. low performing placements.
- Set ads to “lowest cost” bids rather than manual bids.
- Create lookalike audiences from your customer lists.
- Make your ads stand out – but avoid looking too “salesy.”
- Use Facebook’s ad testing tools to find winning variations.
- Create quality scores by reaching engaged users who click and convert.
Should You Focus on CPM or CPC Bidding?
When setting up a Facebook ad campaign, you have two main bidding options:
- CPM bidding – You pay for impressions
- CPC bidding – You pay when people click your ads
Optimizing for CPM can help quickly drive a large reach and impressions. But that doesn’t necessarily mean you’ll get clicks and conversions.
With CPC bidding, you only pay when people engage with your ads. This can help maximize conversion value from your spend. However, it makes it harder to predict and control reach.
In most cases, CPC bidding makes the most sense for conversion-driven campaigns. While CPM bidding can be useful for reach-based objectives like brand awareness.
Testing different bidding types for your goals and targets can help you find the right balance for your campaign.
Troubleshooting High CPMs
If you notice your Facebook CPMs are consistently too high, here are some troubleshooting tips:
- Make sure your daily budget isn’t too low, which can drive up competition.
- Double check your audience targeting is dialed in.
- Switch bidding to “lowest cost” rather than manual bids.
- Test out CPC bidding vs CPM bidding.
- Try raising your budget to swamp competing ads.
- Create different ad sets for different audiences.
- Add negative targeting to weed out irrelevant users.
- Check Quality Scores and optimize poor performing ads.
Conclusion
In summary, the average cost to reach 1,000 people on Facebook typically ranges from $2.50 to $10 depending on your objectives, audience targeting and other factors. While benchmarks are helpful, the only way to know your true CPM costs is to test campaigns and audiences.
By monitoring key metrics in Facebook Ads Manager and optimizing targeting, creative, budgets and bids, you can keep your CPMs as low as possible while still reaching your marketing goals.