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CPM is the wrong metric to measure for Meta. Meta is an auction based platform that uses GEM (its core system), ad ranking, audience targeting & a few other signals to optimize ads on the platform. Since ultimately Meta wants ad engagement (a view, click, purchase) it optimizes for that. CPM is a consequence of that and can be counter intuitive.
– Let’s say you produced the best ad ever. 1 out of every 2 people served to engage (view, buy, whatever). Your CPM is going to be very high — because the auction system can deliver a better result it needs to get it in front of fewer but high signal value audiences.
– Let’s say you have the worst ad ever. Flashing bright green background with just the word BUY in a slightly darker green. Everyone scrolls past. You’ll have one of the lowest CPMs because the ad algo will serve it to more and more people — and in more and more places to try to get an engagement (before it quickly gives that ad a low rank and doesn’t want it in circulation).
It’s why metrics like CPM are useless as a yard stick (as is CTR). Don’t believe me? Put two ads in rotation — one baseline and add cute puppies or kittens to the second one. Use the same ad copy. Everyone loves fluffy kittens so your CTR & CPM will be higher.
So your boss is right about two things:
– Don’t trust Gemini (I just tested and it says ads with higher engagement have lower CPMs on Meta which isn’t _generally and always_ true); and
– Ads that catch the attention of targeted users are better than ads that don’t — regardless of the CPM you’re seeing.
