Nobody likes wasting money, especially with a business. When it comes to advertising, you want to know what works, what doesn’t, and how you can improve. When it comes to social media ads, Facebook is the dominant channel for businesses, allowing them to reach a large audience at a low cost. But the platform offers an overwhelming amount of data – 350 separate metrics to be exact. So which Facebook ad metrics are most important to your business goals?
Let’s take a look.
Are Your Ads Relevant to Your Audience?
When you set up a Facebook ad, you choose a target audience. You create the audience by using the most relevant demographics, taking your current CRM and creating a lookalike audience, remarketing to current customers, or one of many other methods.
One of Facebook’s key metrics answers the question, is the ad relevant to your audience? If you go into the Facebook Ad Manager, as mentioned here, you’ll find a relevance score for each of your ads. Facebook scores your ad based on how engaged your audience is with the ad, essentially measuring the interest of your audience, and gives a score from 1 to 10.
Now here’s why it’s important. The higher your score, the more Facebook will put your ad in front of the right people. Also, the more relevant the ad, the cheaper the price, which equates to lower costs for customer acquisitions. If a company is just determined to push an ad rated 2, Facebook will still do it, but the company will pay more than if the ad rates an 8.
One caveat here, this metric measures the relevancy of the ad to the audience you’ve served it to, but doesn’t measure the quality of the ad overall. It may perform better with a different demographic, like a local audience vs. a national audience, for example.
Are Your Ads Converting?
Also in Ads Manager, you’ll be able to see if your ads are converting. A conversion is any action that you want the consumer to take on the ad, usually with a call-to-action (CTA) button. It can be anything from clicking a link to a particular page on your website (traffic ad) to signing up for your offer on a landing page (lead ad).
To do that, you look at the cost per result metric for each ad. Different types of ads will cost different prices. For instance, a FB page building ad will often return results of $.01 to $.03 per “like,” but a website traffic ad will typically be $.30 or more per link click, and a lead ad may cost several dollars per lead.
The cost per result is based on the ad spend divided by the number of results. So if your cost per lead is greater than the value of each lead, then your Facebook campaign is performing poorly. This metric is the most important when you want to measure a campaign’s success.
You can set your conversion goals by assigning each conversion a monetary value, either from what you know is the lifetime value (LTV) of your customer, or from how much you’re willing to pay per conversion based on your experience and common sense.
To find your conversion rate, divide the number of results by the number of impressions.
Setting up a Facebook Pixel for your ad account is a great way to track your monthly conversion rates. Facebook provides a guide to setting up and using a pixel if you’ve never used it. You’ll find the data collected by your Facebook Pixel in Facebook Analytics.
Are Your Ads Engaging Your Audience?
The biggest question with any ad is how the audience responds. Did they like it? More than that, did they like it enough to click on the ad? You don’t need to concern yourself with the Clicks (All) metric, but instead look at the Clicks (Link) metric. This is the one that measures people clicking on the conversion call to action. Clicks (All) is fine for showing audience interest, but if it isn’t the specific Clicks (Link) that converts, it’s not as important.
Another metric to help you determine engagement is Click-Through Rate (CTR). This is the number of total clicks divided by impressions. Let’s say you have 10,000 impressions and 100 clicks. That’s a 1% CTR. If you had 1000 impressions and 100 clicks, even better. That means 10% of people who saw the ad clicked on it. By Facebook standards, that’s impressive engagement.
Are You Getting A Return On Ad Spend?
Another metric to let you know if your Facebook ad campaigns are successful is your Return on Ad Spend (ROAS). This metric is related to sales, it’s the amount of revenue you make for each dollar you spend on Facebook ads. The way to calculate it divide the total sales amount from a campaign by the ad spend amount. If you’re running sales ads, you can track them with your FB pixel.
What Other Facebook Ad Metrics Should You Pay Attention To?
Another metric to keep an eye on in your FB ads campaigns is Frequency. Frequency is the number of times your ad is shown to a unique user in your audience. There are a few reasons to keep this number low, including that statistically the cost for each click goes up as the frequency goes up. But the click through rate goes down.
The biggest reason to keep an eye on frequency is to keep from annoying your audience. If someone sees your ad too many times, they may hide it from their feed, or worse leave a disparaging comment on your ad. Both of those affect your relevancy score and hurt your ad’s performance.
They also make your business look bad, and since you’re trying to gain customers rather than turn them off it’s a good metric to watch. Although it isn’t written in stone, frequency should be around 2+. When you start to show the same ad to the same people 3, 4, and 5 times, you may start getting pushback. Even if you don’t, your audience could become numb to the ad and ignore it.
Keep your ads fresh, and maybe use Daily Unique Reach to ensure your ads appear only once per day to your audience’s unique users.
‘You Can’t Measure Social ROI’ Is a Myth
It’s entirely possible to ferret out the necessary data that pertains to FB ads for ROI from the myriad data points available. Using the metrics listed here together, will give you a pretty good idea of how your campaigns are doing, and where changes may need to be made. You can also use the data to calculate ROI for your ad campaigns.
At WGi, we know how to create ads for your particular business goals, and how to measure their success. We can take the guesswork out of FB advertising, and make sure your dollars aren’t wasted on ineffective campaigns.
If you want to learn more about how social media can help you reach your business goals, this is a great post on the key components of a successful digital marketing strategy.
Click here to ask about how Facebook ads can help your business. Or, call Ken at 800-932-7746. You can also email Ken at ken@webgraphicsinc.com.