The cost per thousand impressions (CPM) on Facebook can increase for several reasons:
Demand-Supply Dynamics: If there is a higher demand for advertising space on Facebook's platform and/or a limited supply of available ad impressions, this can lead to increased competition among advertisers. As a result, Facebook may increase CPMs to optimize revenue and manage ad inventory effectively.
Seasonal Trends: Certain times of the year, such as holidays or peak shopping seasons, tend to have higher advertising demand. During these periods, advertisers may be willing to pay more to reach their target audience, leading to an increase in CPMs.
Algorithm Changes: Facebook frequently updates its advertising algorithms and features, which can impact ad delivery and pricing. Changes in how ads are targeted, optimized, or prioritized within the auction system may influence CPM rates.
Advertiser Behavior: Changes in advertiser behavior, such as increased bidding or adjustments to ad budgets, can affect auction dynamics and CPM rates.
Ad Quality and Relevance: Facebook prioritizes ads that are relevant and engaging to users. Advertisers with higher-quality ads may experience lower CPMs due to better performance and ad relevance.
Platform Changes: Changes in Facebook's policies, features, or ad formats can impact ad performance and pricing. Advertisers may need to adjust their strategies in response to these changes, which could influence CPM rates.
Overall, fluctuations in CPM on Facebook are influenced by a combination of factors, including market dynamics, seasonal trends, algorithm updates, advertiser behavior, and platform changes. Advertisers should regularly monitor their ad performance and adjust their strategies accordingly to optimize their advertising investment.