- Oct 20, 2022
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How I used them as indicators of quality.
Let’s start with the basics
CPM – is the cost per 1,000 impressions.
To see the number of impressions in Facebook, select the Impressions metric.
CTR – is the ratio of clicks to impressions.
In Facebook, it's better to focus on CTR (Unique Click) or CTR (Link Clicks).
If you choose “All Clicks,” the statistics might be irrelevant – it includes any interaction:
So, the user may not have even seen what’s in the ad, but their action will still count as a click.
Why is CPM sometimes high or low?
High CPM:
Low CPM:
Why is CTR sometimes high or low?
There’s not much point in over-explaining here – it mostly reflects the audience's interest in your ad.
Now for the most interesting part of the post =)
When working with different GEOs, it’s important to know your average CPM and CTR to determine whether you're reaching a quality audience or a junk one.
This helps identify the problem: is it the creative, the approach, or are the algorithms throwing junk traffic your way?
Let’s break it down with examples for clarity:
Two main approaches you can use:
Option 1: CPM + CPC + CPL
If CPM is higher than normal – figure out why: is CTR low or is it just an expensive auction?
Option 2: CPM + CTR + C2L
Calculate CPC based on CTR and analyze CPL.
Examples:
(1) Good audience, good prices
(2) Good audience, but expensive traffic
(3) Bad audience, high CTR
(4) Bad audience + low CTR
So, by using CPM and CTR, you can get at least a rough idea of whether you're reaching the right audience.
But for this, you need to know your own metrics and test to have something to analyze, compare, and draw conclusions from.
Let’s start with the basics
CPM – is the cost per 1,000 impressions.
To see the number of impressions in Facebook, select the Impressions metric.
CTR – is the ratio of clicks to impressions.
In Facebook, it's better to focus on CTR (Unique Click) or CTR (Link Clicks).
If you choose “All Clicks,” the statistics might be irrelevant – it includes any interaction:
- Accidental taps;
- Swipes;
- Muting the video;
- Any interaction with your ad.
So, the user may not have even seen what’s in the ad, but their action will still count as a click.
Why is CPM sometimes high or low?
High CPM:
- Expensive audience (Tier 1);
- High-quality audience;
- Crowded auction (e.g., during holidays);
- Burnt-out or overused creatives;
- “Testing” phase of a campaign.
Low CPM:
- Cheap traffic (Tier 3);
- Low-quality (“junk”) audience;
- High engagement (likes, comments, views, etc.);
- Empty auction;
- Unique creative or approach.
Why is CTR sometimes high or low?
There’s not much point in over-explaining here – it mostly reflects the audience's interest in your ad.
Now for the most interesting part of the post =)
When working with different GEOs, it’s important to know your average CPM and CTR to determine whether you're reaching a quality audience or a junk one.
This helps identify the problem: is it the creative, the approach, or are the algorithms throwing junk traffic your way?
Let’s break it down with examples for clarity:
- CPM (Cost per 1K Impressions): $10
- CPC (Cost per Click): $1
- C2L (Click to Lead Conversion): 1 in 3
- CPL (Cost per Lead): $3
Two main approaches you can use:
Option 1: CPM + CPC + CPL
If CPM is higher than normal – figure out why: is CTR low or is it just an expensive auction?
Option 2: CPM + CTR + C2L
Calculate CPC based on CTR and analyze CPL.
Examples:
(1) Good audience, good prices
- CPM = $10
- CTR = 2%
- CPC = $0.50
- CPL = $1.50
- C2L = 1/3
- CPM is average.
- CTR is high, so the creative works and we’re hitting the right audience.
- Good conversion rate means relevant audience.
- Cheap lead – 2x lower than average.
(2) Good audience, but expensive traffic
- CPM = $30
- CTR = 2%
- CPC = $1.50
- CPL = $4.50
- C2L = 1/3
- High CPM, likely a crowded auction or overused creative.
- CTR still good, so creative still performs.
- Lead isn’t cheap – analyze ROI.
- If traffic is quality and you're scaling – keep it.
If budget is limited and cost-per-lead matters – consider pausing.
(3) Bad audience, high CTR
- CPM = $10
- CTR = 5%
- CPC = $0.20
- CPL = $3
- C2L = 1/15
- Very high CTR – the creative caught attention, but...
- Terrible lead conversion – audience is irrelevant or low-quality.
(4) Bad audience + low CTR
- CPM = $10
- CTR = 0.7%
- CPC = $0.70
- CPL = $4.20
- Creative didn’t engage the audience – CTR is poor.
- Bad conversion – even those who clicked are dropping off.
Definitely not your target audience and likely to have low LTV.
So, by using CPM and CTR, you can get at least a rough idea of whether you're reaching the right audience.
But for this, you need to know your own metrics and test to have something to analyze, compare, and draw conclusions from.
