One of the great things about advertising with Facebook is the plethora of metrics available to advertisers, allowing you to pinpoint exactly how each ad is doing. But with so many metrics to consider, how do you actually measure the effectiveness of Facebook ads?
Not all metrics are helpful, and with so many numbers available, it can sometimes be impossible to see the wood for the trees.
Here are some metrics you’ll see on your ads dashboard:
While knowing the clickthrough rate for each ad is undoubtedly helpful, this metric can sometimes be given a little too much attention. Many people use this to judge the quality of an ad- after all, if your ad piques interest enough for a click, it must be effective… right?
Not necessarily. Just because someone has clicked on your ad does not mean they’ve gone on to purchase one of your products. While you should definitely keep an eye on your clickthrough rate- especially when testing ad image against each other, you shouldn’t make decisions based on this metric alone.
This is another reason why it’s so important to install the Facebook pixel on your website if this is where you’re sending your leads. This will allow you to see what people are doing once they click your link, and if they’re becoming paying customers.
To figure out your conversion rate, take the number of sales attributed to people who have clicked through to your website from an ad. Then, divide it by the number of clicks in your Facebook ads manager over the same time period. Multiply this number by 100.
For example, if you had 31 sales and 583 clicks, your conversion rate would be 5.32%.
Cost Per Conversion
This metric is super important. You may have one ad that has given you 50 sales, and if you’re comparing it to another ad that has given you 30 sales over the same time period, you may instinctively think that the first ad is doing better.
But this is where cost per conversion (or cost per sale) comes in. Look at how much you paid for the clicks for each sale and how many clicks you needed per sale for each campaign. Once you begin comparing your cost per conversion, you may be surprised to see which ads are actually the most effective.
Facebook will show you the average amount of times the people in your audience have seen your ad. For example, you might have an audience of 10,000 people, and Facebook may begin reporting that people are beginning to see your ad more than once. If the goal of your campaign is to drive sales, a frequency of one, two, or even three times per person is fine. After all, this may simply make it more likely that someone will click on your ad the second or even the third time they see it.
This metric should be considered when you’re looking at the overall performance of your ad. For example, if your ad isn’t giving you the numbers you’re hoping for, but it has a high frequency, you may want to increase audience size. Once your frequency gets too high, and someone is seeing your ad five or six times, it may be time to turn off that ad. Of course, this depends greatly on your cost of sale.
Value of a Sale
If you have a number of different products for sale, this is a hugely important metric. For example, if you were to sell a particular product, your customers may choose to come to you for more of your products in the future.
For example, if you’re selling blue widgets, and you know that 50% of the people who buy one of your blue widgets will also buy one of your red widgets, and 25% of those people will go on to buy a green widget, then your value of a sale is much higher than you would think if you’re only taking the first sale into account.
This means that your Facebook ads will often be more effective than you think.
Return on Investment
ROI is the best indication of the performance of your ads. It takes all of the information we’ve looked at above, and allows you to see the actual value of the ad. This will depend on your other business costs, but ideally, you should be able to see a clear difference between your profit after a few weeks or months of running Facebook ads.
Do all of these terms make you scratch your head? Prefer to leave it to the professionals? Get in touch with our team and we’ll set up, monitor, and optimise your Facebook ads for you.