Can a Good CRV Save High CPMs?
A marketer discusses how high CPMs ($300-400) can still be acceptable if they deliver strong conversion rates (15%) and favorable unit economics. The speaker prioritizes CAC and ROAS over CPM metrics and views high CPMs as a solvable testing problem rather than a fundamental issue.
Summary
The speaker shares their perspective on managing high CPM (cost per thousand impressions) advertising campaigns. They openly acknowledge running ad sets with CPMs in the $300-400 range, which they recognize as suboptimal and actively work to reduce. However, they emphasize that the acceptability of high CPMs depends entirely on downstream performance metrics. In this case, the high-CPM campaigns achieve a 15% conversion rate, which the speaker describes as exceptionally strong.
The speaker's core philosophy prioritizes CAC (customer acquisition cost) and ROAS (return on ad spend) as the meaningful metrics that drive business decisions. They explicitly state that CPM matters only when these downstream metrics are not performing well. High CPMs are reframed as a solvable problem that can be addressed through systematic testing and iteration, rather than an insurmountable challenge.
When high CPMs are identified as the issue, the speaker's approach is to maintain the winning message or concept but find alternative creative or targeting approaches that deliver the same results at lower cost. This reflects a pragmatic, test-and-learn methodology focused on optimizing the entire funnel rather than getting fixated on any single metric.
Key Insights
- The speaker operates ad sets with $300-400 CPMs that maintain a 15% conversion rate, demonstrating that high CPMs can be justified by strong conversion performance
- The speaker prioritizes CAC and ROAS as the only metrics that truly matter, viewing CPM as secondary and only relevant when other metrics are underperforming
- High CPMs are characterized as always solvable problems through testing, implying they are tactical issues rather than structural limitations
- The speaker's approach to fixing high CPM issues involves maintaining the winning message but testing alternative concepts to achieve lower CPMs
- The speaker expresses emotional concern about high CPMs despite their rational acceptance of them when conversion metrics are strong, suggesting a tension between ideal and practical performance
Topics
Transcript
[0:00] I have literally literally winning adsets that are in the $300 to $400 CPM mark. Is that good? No. Am I trying to get it down? Yeah. Does it keep me up at night? Of course. But the conversion rate on those is like 15%. It's [ __ ] insane. So, for me, most important thing as always is going to be CAC, rorowass, you know, I don't really care about anything else. I don't really care about CPMs. Those only matter if those other things are not in line. So, I know I can fix a CPM issue. It's always a solvable problem. It's just a game of testing to figure out what is causing the high CPMs.…
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