Why do some ad accounts have extremely high CPMs
The speaker explains that high CPMs in Facebook ad accounts are largely driven by total spend history rather than account age alone. Accounts with more spend signal reliability and trustworthiness to Facebook. Creative choices, such as using video, can also contribute to higher CPMs.
Summary
The speaker addresses why some ad accounts experience higher CPMs than others, arguing that the primary factor is the total amount of spend that has gone through an account. Using a direct comparison — an account with $1K in spend versus one with $100K in spend — the speaker contends that the higher-spend account will consistently achieve better CPMs.
The reasoning is that Facebook interprets high cumulative spend as signals of trust: the advertiser reliably pays invoices, delivers good user experiences, and drives conversions. While account age is mentioned as a factor, the speaker downplays it relative to spend volume.
Additionally, the speaker briefly notes that creative format plays a role in CPM levels, pointing out that video ads naturally tend to result in higher CPMs compared to other formats. The speaker suggests reviewing creatives as one lever for bringing CPMs down.
Key Insights
- The speaker argues that total spend history in an ad account matters more than account age when it comes to achieving lower CPMs.
- The speaker claims Facebook interprets high cumulative ad spend as a trust signal, indicating the advertiser reliably pays invoices.
- The speaker contends that delivering good user experience and generating conversions are also signals Facebook uses to reward accounts with better CPMs.
- The speaker suggests that reviewing and optimizing ad creatives is a viable lever for reducing CPMs.
- The speaker states that running video ads naturally results in higher CPMs compared to other creative formats.
Topics
Transcript
[0:00] I think what really matters is how much spend has gone into that particular account. So, if I were to run ads directly against you, it only has 1K in spend. My account has 100K in spend. Which do you think is going to get better CPMs? A nice aged account is good, but it much more so matters how much spend have you put through the account because that's all signals of trust to Facebook, signals to Facebook that you're a reliable client that always pays his invoices and that provides good user experience and that is getting conversions in return. Take a look at the creatives and see what you [0:30] can do to bring those down.…
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