Numbers and the funnel
High CPMs on Meta: when they matter and when they don't
The goal isn't the cheapest CPM. It's the lowest CAC you can sustain.
High CPMs can be a real problem for some audiences. Brands targeting US women 45+, for example, pay a lot to reach them.
But lowering CPM shouldn't be the goal by itself. What matters is whether the funnel can take that CPM and still hit your target CAC.
The chain that actually decides your CAC
FormulaCPM → LCTR → LPV → CVR → CAC
| Metric | What it tells you |
|---|---|
| CPM | What 1,000 impressions cost |
| LCTR (link click-through rate) | How many of those people clicked |
| LPV (landing page views) | How many actually arrived on the page |
| CVR (conversion rate) | How many of those bought |
| CAC | What each new customer cost in the end |
Why cheap CPMs can cost you more
Illustrative numbers, per 1,000 impressions:
| Expensive traffic | Cheap traffic | |
|---|---|---|
| CPM | $40 | $20 |
| Link CTR | 1.5% → 15 clicks | 0.8% → 8 clicks |
| Clicks that land (80%) | 12 page views | 6.4 page views |
| Conversion rate | 3% | 1.5% |
| Purchases | 0.36 | 0.096 |
| CAC | $111 | $208 |
| New customers from $10k/month | 90 | 48 |
The cheap traffic came from a pocket of the audience the ad and product weren't relevant to. Half the CPM, almost double the CAC, and at $10k a month that's 42 customers you never got.
So it's not about CPM on its own. It's about lowering it while keeping LCTR up. I watch that in cost per landing page view. And as long as conversion rate doesn't swing much between audience pools, CAC stays solid.
3 ways we make expensive traffic work
| Lever | What we do | Why it helps |
|---|---|---|
| Landing page | Make it more relevant and consistent with the ads | Higher CVR, and that good signal can show up as lower CPMs too |
| Format | Test a lot of organic-looking ads | Meta charges more to show something that looks like an ad than something that looks like a post from a friend, and LCTR barely drops |
| Offer | Make it strong enough to earn the click | A higher LCTR pays for the expensive impressions |