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How To Lower Cost Per Click (CPC) on Facebook Ads


Welcome to my How To Lower CPC on Facebook Ads 2021 – Detailed breakdown and strategies to lower Cost Per Click on any digital marketing platform.

In this video I’m going to walk you through the 5 steps to lower your CPC when running Facebook ads especially for 2021, as well as 2 ways to make your Facebook ads more profitable. And while this video we’ll be talking about Facebook, the same strategies apply to all online advertising platforms. 

Here’s what we cover:

-How Cost Per Click (CPC) is calculated and how it works

-How to lower your CPC by increasing your audience size

-How changing your conversion event can lowers your CPC

-How to improve your ad to get more clicks 

-How to make your ads more effective overall to generate a greater return on investment (ROI)


In this video, I’ll be showing you how to lower your cost per click when running Facebook ads. And while we’ll be talking about Facebook ads, these same strategies apply for almost all online advertising platforms. Whether you’re running Google ads or YouTube ads or Snapchat ads or TikTok ads, you can still apply these same strategies to lower your cost per click. Hey, it’s Connor from Instinct Education. Every month we spend over a hundred thousand dollars on Facebook ads and we’re constantly testing new ways to get better results. So in this video, I’ll be breaking down five ways to lower your cost per click and make sure you stick around till the end because I’ll also be sharing two ways to increase the overall effectiveness and profitability of your Facebook ads campaign. So before we can talk about how to lower your cost per click, you first need to understand how your cost per click is calculated.

If you don’t know that it’s very difficult to understand how we can get it lower. So most people think that when you run Facebook ads, you pay per click, but that’s not actually how it works. Your cost per click is calculated based on two other metrics. And so when you go into your Facebook ad dashboard, you might see all these different numbers and metrics and labels for things, and you might be wondering what they are. The first thing you want to be aware of is what’s called your cost per impression. So when you’re on Facebook ads, you’re paying for impressions and an impression is when your ad is showing on someone’s newsfeed. So the way this looks in your Facebook ad dashboard is called your CPM, your cost per 1,000 impressions. And so let’s say you’re running ads and you have a $10 CPM cost per thousand impressions.

That means that you’re paying $10 to get your ad in front of 1000 people. Now, if all of those 1,000 people, one person clicks on the ad, your cost per click is going to be $10 because you paid $10 to get your ad in front of 1,000 people. And of those 1000 people, one person clicked. So you’re not really paying for a click. You’re paying to get your ad in front of people. And then based on what those people do will determine your cost per click. Let’s say again, you spent $10 to get your ad in front of 1,000 people, and this time 10 people clicked. Now your cost per click will be $1 because of those $10 you spent 10 people clicked 10 divided by 10 is one. So, that’s how your cost per click is calculated. And ultimately it’s the difference between the CPM, how much you’re paying to get your ad shown to people, and the number of people that click on your app.

That is how we calculate cost per click. So if we want to lower the cost per click, there’s two things we can do. We can lower what we’re paying to get our ad in front of other people so that’s lowering our CPM, or we can increase the number of people that are clicking on our app. So let’s say we spend $10 to get our ad in front of 1,000 people. Instead of getting one person to click, we could do certain things to get five people to click or 10 people to click. And when we do that, we can take our cost per click from $10 a click down to in this example, $1 click. So let’s break down the five ways that you can do that.

So the first way to lower your cost per click is by reducing what you’re paying per impression and what you pay for each impression is typically determined by two things. Number one, the size of the audience that you’re targeting. And number two, the number of other people that are also targeting that audience, the way Facebook ads work is that it’s a competition. And so every new person running ads is going to increase what you’re paying. So the first way to reduce your CPM and therefore reduce your cost per click is by selecting a different audience. So if you’re, let’s say, targeting dogs as an audience, people who like dogs, and let’s say there are a hundred other people also targeting the audience of dogs. Well, if you found a different audience, let’s say dog toys, people who like dog toys and that audience, maybe there’s only 50 people targeting it. Well, your competition has just dropped in half. So by doing that, you’re able to lower your CPM because there’s less competition.

And your CPM, your cost per impression, is determined by how many other people are targeting this keyword. The second way to lower your CPM is by changing your conversion event. So when you set up Facebook ads, you can select what type of conversion event you want. Do you want to optimize for purchases? Do you want to optimize for leads? Do you want to optimize for add-to carts? Basically, when you do this, you’re telling Facebook that I want to find the people who are most likely to take this action. So if you’re optimizing for, let’s say purchases, Facebook is going to show your ad to the people who are most likely to purchase. The problem is that’s who everyone else is also targeting. So there’s a lot of competition. And with high competition, we have a high CPM. So what we can do is change the conversion event.

So let’s say add to cart or leads where there might be less competition. However, understand that when you do that, you may get lower quality traffic. So there’s always a trade-off. So this is why looking at your entire ad account holistically and not just trying to get your cost per click as low as possible is a good idea, because just because you’re paying less for a cost per click, it may be from lower quality prospects or lower quality traffic. And therefore the overall profitability of your campaign may actually be negatively affected. So understanding that is really important.

So other than decreasing your CPM, the other way you can decrease your cost per click is by increasing the number of people that click on your ad. Again, if your ad is shown to 1000 people and only one person clicks, you’re going to have a high cost per click. If we could increase that from instead of a one person to let’s say 10 people, now your cost per click is going to go down. So how do we do that? Well, there’s three ways. The first is by improving your ad creative and this is the image or video that goes with your ad. If you create a more engaging creative, then more people will likely click on your app. The second way is by changing the copy, which is the text that goes with the ad, and this could be the headline or the body. If we can create better copy, write better ads, more people will likely click.

The third thing you can do is improve your targeting. And so an example would be if you are selling dog toys, but you’re targeting people who own cats, the number of people that are clicking on the ad is probably going to be low. So if we can improve the targeting in this example, by targeting people who own dogs, now the number of people that see your ad and click is likely going to be higher. So they’re the three ways you can increase the number of people clicking on your own. You can improve the creative which is the video or image. You can improve the copy, which is the headline or the body text, or you can improve the targeting, which means that more people who see your ad are likely to want what you have to offer. So there are five ways you can lower your cost per click.

You can increase the audience size and therefore decrease the competition. You can change the conversion event. You can change the creative, which is the video or the image. You can improve the copy, which is the headline or the body text. And you can improve your targeting. Now, just because we’re lowering the cost per click, it doesn’t necessarily mean your Facebook ads are going to be more effective. Like I said, if you lower the cost per click, but the wrong people are clicking, then ultimately your campaign isn’t going to be effective. And the goal of running any advertising campaign is to make a profit, make a return on investment. So here are two ways that you can improve the overall effectiveness of your campaign. Number one is by increasing the conversion rates after someone clicks. So if we’re just focusing on the cost per click, we might be missing the next step.

And that is what happens after someone clicks. I would rather pay $10 per click if every single person that clicked converted rather than pay $1 a click and no one converts. So looking at your complete funnel, your entire sales process from click to client or sale is important just because you’re getting cheaper clicks, maybe less of those clicks are converting. And so it’s important you understand that complete picture and also focus on what happens after someone clicks. The second way you can make your overall campaign more effective is simply by charging more. Let’s say, right now you’re spending a hundred dollars to make a sale. And that sale is worth a hundred dollars. Well, right now you’re breaking even. So yes, we can lower the cost per click. We can increase the conversions and that might get that hundred dollars spent down. But another thing we could do is just increase our price point, increase what we’re charging, improve our offer, add more value.

And now, instead of being worth, let’s say, a hundred dollars, maybe we could make it worth a thousand dollars. And so we still pay a hundred dollars to make that sale but now we’re not making a sale of a hundred dollars, we’re making a sale of a thousand dollars. And our ads just went from breaking even to now being 10 times return on investment. So understanding those two things is important and not getting too laser-focused on just looking at the cost per click and the metrics, understanding the complete picture holistically, and looking at the aggregate of what happens with your entire business when you’re running ads. So that’s a complete walkthrough on how to lower your cost per click when running Facebook ads. If you found value in this, let me know. If you have specific questions, leave them in the comments and I’ll do my best to answer them. Thanks for watching. I’ll see you next time.


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