Does a Higher CPM Mean You Should Spend More?

Why It Matters

Understanding that higher CPM doesn’t automatically require higher spend helps advertisers allocate budgets efficiently, maximizing ROI across markets with differing ad costs.

Key Takeaways

• US CPM averages about $20, UK around $10.
• Higher CPM reflects competition, not necessarily higher spend requirement.
• Budget allocation should follow conversion performance, not raw CPM.
• Combine ad sets if conversion data is limited across countries.
• Split ad sets only when sufficient budget and localized relevance needed.

Summary

The podcast tackles a common advertiser dilemma: why cost‑per‑thousand impressions (CPM) in the United States is roughly double that of the United Kingdom, and whether that disparity should dictate budget splits. Martina, a marketer running identical campaigns in both markets, asks if the higher US CPM warrants a proportionally larger spend.

John explains that average CPMs hover around $20 in the US versus $10 in the UK, driven by stronger competition, industry mix, and performance goals. He stresses that CPM alone doesn’t determine profitability; conversion rates and cost‑per‑result are the true levers. He also notes recent UK regulatory pressures that can affect pricing.

A key recommendation is to let data guide ad‑set structure. If conversions are comparable, keeping the US and UK in a single ad set lets Meta’s algorithm balance spend automatically. Conversely, separate ad sets make sense only when budgets are ample enough to sustain meaningful results and when localized creative is essential.

The takeaway for marketers is to prioritize conversion efficiency over raw impression cost. Adjust budgets based on cost‑per‑acquisition and ROI, not merely on CPM differentials, and consider merging or splitting ad sets according to data volume and country‑specific objectives.

Original Description

Today's question is about CPM being double in the US versus the UK and whether that means you should allocate double the budget. CPM varies by country due to competition, but higher CPM doesn't automatically mean worse performance. Jon explains when to combine countries versus split them, how Meta balances costs and conversion rates, and why you should let results guide your budget allocation instead of CPM alone. Want your question to be answered on a future episode? Go to JonLoomer.com/Question (https://jonloomer.com/question) and record your question today.