Hi there,
Thanks for getting in touch. I'm happy to give you some initial thoughts and guidance on your situation with low-ticket product profitability and high CPMs.
We'll need to look at the audience...
First things first, lets consider your audience. You've mentioned that your metrics are generally good, except for CPM. This suggests the core issue might not be with your ad copy, landing page, or product appeal itself, but rather with the cost of reaching your intended audience. High CPMs often indicate that you're either targeting a very competitive niche or that your targeting is too narrow, which drives up the cost of impressions.
I remember working with a software client on LinkedIn Ads. We were initially targeting a very specific set of job titles within a limited range of companies. While the leads we generated were highly qualified, the CPM was quite high due to the narrow audience. Broadening the targeting to include related roles and industries significantly reduced the CPM while still maintaining a good lead quality. Maybe that's something for you to consider. The problem with narrow targeting is you're competing with every business under the sun to get your ads in front of the people you want to.
I'd say you should review your placements...
Next, placement is worth considering, so I'd say it's worth looking into. Where are your ads actually running? You might be suprised. If you're using Facebook or another social media platform, check whether you've enabled placements on the Audience Network. I've found that traffic from the Audience Network tends to be cheaper, but often the quality is lower. It doesn't always convert well, and sometimes the CPM difference isn't significant enough to justify the lower conversion rates. This often happens when there is a high volume of impressions, which isn't necessarily always great if the conversion rates are low.
You probably should look at freshing up your creatives...
Now, you said your other metrics are solid, which does suggest the issue is with CPM - however, creatives are defintely worth considering. When were your adds created, are they still engaging? Stale ad creatives can lead to ad fatigue, where your target audience becomes less responsive to your ads over time. This can manifest as lower click-through rates (CTR) and, consequently, higher CPMs as the ad platform needs to show your ads more times to achieve the same level of engagement.
Testing new ad copy and designs is a must, and doing A/B split tests with different ads is defintely a great start - just so long as your tracking your conversion rates and other metrics! If your not, I'd say it's worth looking into. One thing to note however is that creatives and ads can improve your other metrics, and reduce your CPM's, but there is only so far they can go if the audience your targeting is too narrow.
You'll need to explore different creative strategies...
So with all this in mind, what can you do? Well you might need to explore different creative strategies. Try new ad copy, new images, new videos. Fresh adds will grab peoples attention more and can help lower the CPM.
I remember one client, a software company, where we found that user-generated content (UGC) performed exceptionally well on Meta Ads. These videos felt authentic and really stood out against the usual advertising fodder. This approach can provide a steady stream of engaging content that your audience finds relatable and trustworthy.
Another idea could be interactive ads. These can take many forms, from simple polls and quizzes to more elaborate augmented reality (AR) experiences. The key is to create an ad that invites participation and provides value to the user beyond simply showcasing your product. I often see interactive ads that are too long, or don't have any relevant information at all. Make sure your ads are punchy, informative, and don't waste peoples time.
I've detailed my main recommendations for you below:
| Area | Recommendation | Rationale |
|---|---|---|
| Audience Targeting | Broaden your targeting parameters and test different audience segments. | To reduce competition and lower CPMs by reaching a wider, less saturated audience. |
| Ad Placements | Evaluate and optimize ad placements, excluding low-performing options like the Audience Network. | Focus ad spend on placements that deliver higher-quality traffic and conversions. |
| Creative Refresh | Regularly update ad creatives with fresh copy, images, and videos. Experiment with UGC videos and interactive ad formats. | Combat ad fatigue and maintain audience engagement, leading to improved CTR and lower CPMs. |
Implementing these changes should give you a solid foundation to address your high CPMs and improve your ad profitability.
While I've shared some initial guidance here, optimising campaigns with low ticket products can be tricky and may require some further input. If you would like some extra help or a further review of your campaigns, my agency offers a free consultation and we can discuss how to improve your advertising.
Regards,
Team @ Lukas Holschuh
