Facebook advertising is an effective way for businesses to reach potential customers. One key metric used to measure Facebook ad performance is CPM, which stands for cost per thousand impressions. CPM indicates how much it costs an advertiser to get their ad seen by 1000 viewers on Facebook. However, CPM rates can vary significantly based on factors like industry, target audience, and ad placement. Here is an overview of typical CPM benchmarks by industry for Facebook advertising.
CPM Benchmarks by Industry
CPM rates on Facebook tend to be highest for industries targeting high-income demographics like finance and travel. Industries targeting younger audiences like gaming and entertainment also tend to have elevated CPMs. On the other hand, CPMs tend to be lower for industries like retail, automotive, and B2B services which have broader target audiences. Here are some examples of typical CPM ranges for major industries on Facebook:
| Industry | Typical CPM Range |
|---|---|
| Finance | $10 – $50 |
| Travel | $15 – $60 |
| Gaming | $10 – $40 |
| Entertainment | $10 – $50 |
| Ecommerce | $5 – $30 |
| Retail | $5 – $20 |
| Automotive | $5 – $25 |
| B2B Services | $5 – $15 |
As the table shows, industries like finance and travel that target high-income audiences tend to have much higher CPMs on Facebook. Meanwhile, broader industries like retail and B2B services have lower average CPMs. However, even within industries there can be significant variation based on specific target audiences and creative approaches.
Factors Impacting CPM Rates
When benchmarking CPM rates, it’s important to keep in mind that many factors beyond just industry impact Facebook advertising costs. Here are some of the key factors that influence CPM rates:
Target Audience
The target demographic an advertiser chooses makes a major impact on CPM rates. Targeting smaller, high-intent audiences leads to higher CPMs compared to broader mainstream audiences. For example, targeting based on income, purchase history, or specific interests tends to drive up CPM costs. Geographic targeting also impacts costs, with more populous areas like the U.S. and Europe commanding higher rates.
Ad Placement
Where ads appear on Facebook impacts CPM as well. Ads appearing on the Facebook News Feed tend to have lower CPMs compared to right-hand column ads. And ads on Instagram, which is owned by Facebook, have some of the highest average CPM rates across the social network’s ad offerings. Video ad placements also lead to higher CPMs due to increased engagement and visibility.
Ad Format
Creative format makes a difference when it comes to benchmark CPM rates. For instance, single image ads tend to have lower CPMs compared to video ads or multi-image carousels. This is because videos and carousels garner higher engagement levels from viewers. Similarly, interactive ad formats like polls and lead generation ads also produce higher CPM rates thanks to their ability to prompt direct response from users.
Ad Objective
The goal of a Facebook ad campaign also impacts CPM rates. Campaigns focused on driving engagement through comments, shares and clicks tend to have lower CPMs. Meanwhile, campaigns optimized for conversion objectives like sales, app installs or lead generation produce higher CPM rates due to Facebook’s ad auctions prioritizing advertisers willing to pay more per conversion.
Audience Overlap
CPM rates also depend on audience overlap with other advertisers. Targeting a niche audience that few other brands are reaching results in lower competition and CPM rates. But targeting very broad mainstream interests where many advertisers are competing drives up ad costs significantly.
Best Practices for Lower CPM Rates
Here are some tips advertisers can follow to aim for lower CPM benchmarks with their Facebook ad campaigns:
- Target broader audiences for increased reach rather than narrower groups.
- Focus ad objectives on engagement rather than conversion actions.
- Create ads with mainstream appeal to avoid niche competition.
- A/B test single image ads against higher-CPM video and carousel options.
- Analyze audience overlap and avoid targeting highly competitive interests.
- Spread ad budget across multiple lower-CPM placements like the News Feed.
- Advertise services with mass appeal like retail and dining offerings.
Conclusion
Facebook CPM rates can vary significantly based on factors like industry, audience, placement, and creative choices. While industries like finance and travel pay a premium to reach their target demographics, broader industries can achieve strong results at lower CPM benchmarks. Following best practices like broad targeting, mass appeal creative, and testing different placements and formats helps enable lower CPMs. Monitoring audience overlap and competition is also key to cost-effective Facebook advertising for any industry and business type.