What's Happening with Facebook CPMs?

Over the last few years, Meta aka Facebook CPMs have been a rollercoaster. From Apple’s iOS 14 rollout to the pandemic to general macroeconomic instability, it’s been a challenging time for advertisers to understand and manage the constantly fluctuating CPM environment. 

To help shed light on industry-wide trends, we have partnered with Varos to dig into and analyze advertising data across industries and verticals. Our goal is to help advertisers understand whether the price increases they're seeing are specific to their account, or a result of Meta-wide trends. 

For the majority of 2023, Meta CPMs trended on average 21% higher than the same month in 2022, until Q4. Surprisingly, 2023 Q4 CPMs did not increase as much as the previous year and were actually similar to 2022, which could be attributed to a variety of factors including macroeconomic conditions, shifts in channel allocations, technological improvements, and supply and demand dynamics. 

For example, a lower spike in CPMs in Q4 of 2023 could be due to an improvement in Meta’s algorithm, which enters auctions at variable CPMs in order to hit advertisers’ CAC or ROAS targets. Or, it could be a result of decreased competition due to lower spend if advertisers pulled budgets forward throughout the year or allocated them to other channels, like TikTok or Google. 

As for Q1 of 2024, CPMs are currently trending down—in line with 2022 and 20% lower than 2023—which could mean it’s a good time to invest. However, before making any decisions about your paid ads strategy off of CPM trend data, make sure to consider both macroeconomic factors as well as what’s going on in your specific market and business. 

What does this mean for advertisers?

With Facebook CPMs continuing to remain volatile, many Right Side Up clients—both B2C and B2B—have been speaking with us about channel diversification. Some have chosen to experiment with emerging channels like TikTok ads, others have been exploring podcast advertising, and many have been investing in performance-oriented influencer programs.

If you're interested in chatting about Facebook ad performance or channel diversification, reach out to us. We'd love to discuss your growth strategy, no strings attached.

Varos offers real-time benchmarks for digital marketing and revenue metrics (CAC, retention, CPM, CTR, Conversion Rate, etc.) compared to similar companies. We're a data co-op that has 6,000+ companies sharing data with us ($4bn annual ad spend tracked).