Topic (00:38): How do you know if your Facebook Ads campaign is a good investment?
This is a big question for a lot of businesses, especially if you’re a small business owner. We don’t have unlimited budgets, right? We must strategize whether we’re spending $5 a day or $500 a day on social media ads. At either amount, there’s a lot on the line that we want to think about when launching these campaigns.
Here are some metrics to keep in mind and monitor. When you’re in Facebook Ads Manager, the beauty is that it gives you a lot of data. You just have to be able to understand and interpret what that data means so that you know how effective it is.
Set Up Conversion Tracking (2:07)
We do come across some marketers who eyeball their conversions—meaning that they look at the ad campaign, they look at maybe how many leads they have coming through on the website, or how many sales they’re getting, and they’ll just notice some leads or increased sales. But that’s not exactly tracking it. And while there’s nothing wrong with that in the beginning, the goal here though is to use those metrics to get more precise.
The first thing we would encourage you to do is make sure that you’ve set up conversion tracking. Conversion tracking simply means that you set up something that allows you to accurately track when someone clicks on your ad and goes to your website, if a lead or sale originated from your Facebook Ads campaign.
That way, you’re much more precise in knowing where an increase in sales on your website is attributed to. Because it could be a Facebook campaign, but it could also be people going directly to your website, people who found your website on Google searches, and so on. So, when you have people coming in through multiple channels, you’ll want to know if Facebook Ads is a good investment relative to those other ways.
Determine Your Optimal Cost-Per-Click (5:01)
Sometimes you might be running an ad just to generate awareness. Not every ad is run because you want to get sales or leads. Some businesses truly just want to get in front of their audience more, and maybe they have a longer life cycle in the sale, so they just want people to know who they are. If that’s your goal and you’re focused on that, there’s a few different ways you can track that to determine if it’s successful or not.
Average cost-per-click on Facebook is usually about $1.00 to $1.50 per click. So, if you fall below that, generally speaking across all industries, you’re doing pretty good. Now, there are some specific industries where the numbers can be higher or lower. Here is a list of the most popular industries and what the average cost-per-click is on their Facebook Ads. That will give you a baseline to know if you’re spending too much or not, helping you answer the question if this is a good investment.
Industry Average CPC
Consumer Services $3.08
Employment & Job Training $2.72
Finance & Insurance $3.77
Home Improvement $2.93
Industrial Services $2.14
Real Estate $1.81
Travel & Hospitality $0.63
If your goal is awareness, you might simply be trying to get more people to Like your page. So, you might then be paying for Page Likes, and that’s another good metric to track. If you’re measuring that, look at cost per click and what’s the average to get Likes.
Pro Tip (7:11): Always be growing your audience. Even if you’re running ads that are designed to get more leads to your website and more traffic, always run ads that help you grow your audience and get more fans to Like your page. Because as you grow your audience base on Facebook, that’s going to give you more people to put your organic content in front of.
Monitor Your Ad Relevance (8:04)
The final thing we want you to think about is what is called ad relevance. Think of this as a directional metric. Compasses tell you North, South, East, West, and which way to go—think about ad relevance as your compass on Facebook Ads. When you are running ad campaigns, ad relevance will help you understand if the campaign you’re running is above, below, or just average, compared to other people who are running similar ads.
This is a metric that you can find when you’re in Ads Manager, if you go to the Ads tab, once you’re already running Facebook Ad campaigns. There will be three columns to the far right (you kind of have to scroll to the far right; they hide it and they don’t make it easy to find). These columns are labeled:
This is a ranking of your ad’s perceived quality. It’s basically helping measure how relevant your ad is. It looks at the quality of your ad and the quality of the experience people get when they end up on your landing page or website. So, you’ve got to think about, in order to make our Facebook Ads a good investment, it can’t just be a good ad itself. You’ve got to send people to a good webpage, too.
Engagement Rate Ranking
This is a ranking of your ad’s expected engagement rank, which includes engagement, inclusive of all clicks, likes, comments, and shares. What Facebook is doing when it gives you the Engagement Rate Ranking is it’s ranking your ad against other ads that competed to the same audience. It’s looking to see if your ad got more clicks, likes, shares, comments than other competitors. Then it’ll tell you if you were above average, below average or average.
Conversion Rate Ranking
This is a ranking of your ad’s expected conversion rate. If you have that Facebook Pixel in place and you are tracking conversions, it’s going to tell you if your conversions above average, below average, or again, just average.
These do have a correlation to how much you’re spending cost-per-click. If your Quality Ranking, Engagement Ranking, and Conversion Rate Ranking are all below average, then chances are you might be paying a higher cost-per-click than you should, or than competitors that might be running a better ad that might be above average. So, these are the metrics you want to pay close attention to that help answer the question of if your Facebook Ad is a good investment.
Remember Human Value (12:17)
Always take metrics into account with human intellect. You still have to ask yourself, outside of these metrics, “Am I running a good campaign?” The answer to that is based on the quality of the ad that you’re creating, on the interactions you’re getting, whether people are contacting you through messages, and so on, because not every ad will lead to a transaction or lead to a person filling out a form. Make sure you’re checking your direct messages on Facebook, your inbox, and your comments on ads, because that counts for a lot. There’s human value that you’ve got to pay attention to in the campaign, and it’s not always going to come in a pretty, neat box when you pull your reports.
Read more about this topic as well as others like it on our blog, where you can get lots more information! And, as always, contact us on social media any time. If you’ve got a question or if you’ve got another topic you wanna hear for an upcoming 10 Minute Marketing podcast, just let us know!