FaceBook CPM vs CPC vs CPA Inventory

[ben10025]

Not sure this is the best place to post but hopefully someone can shine some light on this:

Recently set up a new FB campaign to a pretty targeted group on a Conversion basis (estimated £30-£60 per conversion) and bid at around £40. This worked pretty damn well and was seeing 3%+ CTR for about 5 days with around 50-100 clicks a day.

After this validation period I wanted to try and lower my costs. The average CPM during this was working out to around £6.50 which seemed unreasonably high, so I switched over to CPM basis (estimated £0.80 - £1.20) set Max Bid at around £1.30 - the ad remained unchanged in every other way.

However, since switching to CPM I'm only reaching about 20% of original reach and CTR has plummeted down to <1%. I'm positive this is not due to ad fatigue as this happened exactly after the switch. I would have expected a gradual lowering of CTR if it was just down to ad fatigue.

So, I've read come have claimed that FB reserves inventory in their favour - i.e. the CPM traffic I'm getting is their worst. Have any of you experienced this, and any tips on how to work around it?

 

[CCarter]

If you reduce the money you send to Facebook, obviously they are going to reduce traffic and the quality of traffic to your campaigns.

At £6.50 CPM what were your profit margins? If you were profitable, why the switch? From £6.50 CPM to £1.30 CPM is a massive drop in revenue for Facebook, it should have been obvious they are going to reduce the quality traffic and quantity as well.​

 

[ben10025]

Thanks for the input!

Of course Facebook is trying to maximise revenue, not naive to that. However, I was under the impression their platform was on an auction basis (https://www.facebook.com/help/163066663757985) so all impressions go to the best bidder (CTR & price etc). In that case, bidding over their suggested bid for CPM (and i'd think massively better CTR than other bidders) I would have thought I'd reach roughly the same number of people?

Trouble is it's a subscription product so will take about two months to reach profitability at 6.50/CPM