How to lower High CPMs
The speaker describes their personal experience dealing with extremely high CPMs (150-200) and how they systematically tested ad accounts, business managers, pixels, and creatives to resolve the issue. By isolating CPM as the first problem to solve, they ultimately reduced CPMs from 150-200 down to 50-60 through a combination of better ads and a new ad account in a new Business Manager.
Summary
The speaker opens by recounting a specific, difficult advertising situation where they faced CPMs of 150-200, CTRs of 8-9%, and a CPA that was 40-50% higher than their target. Faced with multiple simultaneous problems, they made a deliberate strategic decision to isolate and solve one issue at a time rather than trying to fix everything at once — starting with CPMs.
To diagnose the CPM problem, the speaker began systematically testing different variables: ad accounts, Business Managers (BMs), pages, pixels, landing pages, and payment processors. After exhaustive testing, they identified a winning combination. The two most impactful factors turned out to be improved creative quality and launching a new ad account within a new Business Manager.
The results were significant. CPMs dropped from 150-200 down to 50-60, a reduction of roughly 70% in advertising costs. While CTR declined slightly from 8-9% to 6-7%, the speaker considered this an acceptable trade-off given how dramatically the overall cost to advertise fell. CPA and conversion rate also decreased somewhat, but again the speaker viewed these as acceptable outcomes given the massive efficiency gains achieved on the CPM front.
Key Insights
- The speaker argues that when facing multiple simultaneous ad performance issues, the right approach is to isolate and fix one problem at a time rather than trying to solve everything at once — in this case, choosing to prioritize CPMs first.
- The speaker claims that the two most impactful fixes for their high CPM problem were, somewhat unexpectedly, better creatives combined with a brand new ad account inside a new Business Manager.
- The speaker reports that their CPM dropped from 150-200 down to 50-60 after the changes, representing approximately a 70% reduction in overall advertising cost.
- The speaker argues that a drop in CTR from 8-9% to 6-7% was acceptable because the reduction in CPM was so substantial that total advertising efficiency still improved dramatically.
- The speaker describes testing a wide range of variables — ad accounts, BMs, pages, pixels, landing pages, and payment processors — suggesting that high CPMs can stem from multiple technical and structural sources beyond just creative quality.
Topics
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