Acquisitions costs take place long after you’ve spent your first cent. Before you get a lead, first someone had to click on your ad, and before that, your ad had to be shown to a few -thousand- of people.
The moment your ad is printed, you are spending money. That’s how Facebook works, and many other ad social media platforms. As Facebook is displaying your ad, it keeps tracks of how many people is reaching.
The amount of spend so far, divided the people reached (so far), times 1000, gives you the “Cost per 1,000 People Reached” metric. As you guessed, it is an estimate, specific to the point in time where you are looking at it.
Why is important to know the cost per reach? Because it tells you many things at once:
- Is the audience you’ve chosen expensive to reach?
- Are too many advertising targeting the same audience?
- Is my ad creative resonating in the audience?
All these factors will impact the cost of showing your ad and reaching to people.
As you gain more insights from your campaigns, the cost to reach your audience should drop. If it is increasing because a change your media team did, they can undo the change. Here is an example graph of a day over day cost per reach: