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Facebook ads are widely recognized as a great way to boost visibility for your brand, drive sales, and gain valuable insights about your audience. However, as with all marketing endeavors, it is important to understand the impact of your ads, so you can ensure that you get the most out of your investment.
There are numerous ways to measure the ROI of your Facebooks ads, and the chances are that you are already taking many of these into account. However, to optimize your approach, it is vital to understand the full range of factors that can be used to measure the value and success of your ads.
Here are a few tips on measuring your ROI more effectively, so you can determine where your ad campaign is most successful and identify any areas that might require rethinking.
Define Your KPIs
Key performance indicators are those factors that give you specific insights into the success of your ad campaign within a certain plane. These indicators depend on the intended impact of your campaign, so while there are certain measures that are almost always relevant, there are others that may be specific to your business needs.
For example, if your aim is to improve your organization’s reach, then metrics such as views, shares, and connections are important. However, if you intend to push sales of a particular product, while those details are still useful, you also need to consider data on factors such as conversion rates and sales.
Naturally, your overall spend is also a critical piece of data, as this allows you to calculate your cost per click, and weigh that against the returns from those interactions. Some potential KPIs to consider include the following:
- Click-through rate, measured by dividing the number of clicks by the number of impressions
- Likes, comments, and shares
- Cost per click and cost per conversion
- Sales and sale values
- Conversion rate and referral traffic
- Return on Ad Spend (ROAS) and lifetime values. The ROAS is measured by comparing your overall expenditure on an advert, and the revenue it brings in. Meanwhile, lifetime value refers to the expected revenue that will be generated from an individual customer over the course of their life
It is important to give ads enough time to have an impact; don’t assume that because you have seen no conversions in the first few days that your campaign has failed. Meanwhile, keep in mind returning business.
This is where the LV of a customer becomes particularly useful; an ad may only need to convert someone once for them to become a regular customer. So when figuring out the ROAS, it is sensible to include repeat trade in your calculations, not just an individual’s first purchase after reacting to an ad.
Use the Ad Manager
Facebook has an inbuilt Ad Manager that allows you to track the performance of your ads, and evaluate the data collected. The Insights API can track various types of conversions, and retrieve other metrics according to your requirements.
This analysis can be performed across individual ads, ad sets, or your entire campaign. If you are new to creating tracking tags, Facebook’s Developer documents contain simple guidelines on using their API, and inserting simple tags to measure a range of key metrics.
Test and Retest
It is one thing to be able to track the performance of your ads, and another to determine how much more successful they could be. Just because your campaign is meeting its targets, that doesn’t mean it couldn’t be doing even better.
Split testing is a brilliant tactic to use, both for trying out new ideas, and exploring ways to build on existing ones. As these tests enable you to run multiple variations on the same ad simultaneously, you do not need to interrupt your ad campaign in the meantime.
Furthermore, as the ads are run simultaneously and therefore subject to the same external influences, they present a comparative view which is as unbiased as possible. As such, you can develop a sense of the potential ROI of a new idea, and even determine where a seemingly successful ad may be able to perform even better.
By optimizing your ads in this manner, you provide a far more accurate overview of your content performance and the relative ROI of new ads. Whereas, without optimization, you may settle for lower returns, as you would be unaware of the true potential of your campaign.
Analyze Your Audience
If your ad campaign targets a wider audience, you may have certain ads aimed at different sub-groups of your target demographic. Yet, if an ad is less successful than expected, it might not mean that you have missed the mark in terms of the ad content. For example, it could be that the ad was not scheduled at a time when that audience was online.
This means that you should not instantly discard an ad because it has been unsuccessful. Instead, take the time to figure out what went wrong, and make the necessary changes. This is far more cost effective than starting from scratch every time, and also enables you to build a clearer picture of your audience’s needs.
In contrast, ads discarded for the wrong reasons could cause you to develop an inaccurate perception of buyer preferences, ultimately undermining your future campaigns with misinformation.
Think Beyond Financial Returns
While the overarching objective for your business is to become profitable, remember that your ROI does not only need to measure the direct financial returns from your ad campaigns. Indirect returns are in many ways just as important, as they can still impact the growth and expansion of your business.
Your brand’s social ROI incorporates factors such as the growing popularity and authority of your business. As your reputation and visibility improves, you will see more web traffic, and followers will be more likely to place trust in your brand and your content. At the same time, the growing audience might mean you need to reevaluate your approach in order to accommodate these additional potential customers.
Measuring these elements in addition to the direct revenue generated by your ads gives you a far more comprehensive picture of the impact of your campaign, and how your audience prefers to interact with your content.
Compare With Competition
When planning your ad campaign, you will naturally look at what your competition is up to, and research similar companies for ideas and inspiration. However, you can also analyze the impact of your ads in comparison with the campaigns of those companies. Tools such as Fanpage Karma enable you to see how well the competition is performing, giving you a much clearer picture of whether your campaign is meeting its full potential.
Of course, there is always more to learn, but while this is just a beginner’s guide to Facebook Ads and tracking your campaign ROI, if you keep these tips in mind, you can give your brand a significant head start.
Remember, your marketing efforts reflect your passion for your brand, and inspire your audience to feel the same enthusiasm for your business as you do. Facebook Ads can be structured more or less however you want them so they are a fantastic way to reach more people, while still remaining faithful to your brand’s identity.
Do not be discouraged if some ads fall flat; this is just another opportunity to learn from your experiences, find out why the campaign was less successful than hoped, and change up your approach accordingly.
Over time you will not only be able to get a better sense of your advertising ROI far more efficiently, but you will begin to notice an upward trend as you continuously nail your marketing efforts, and inspire greater numbers of followers to engage with your brand.
Guest Post: Victoria Greene is an eCommerce marketer by trade, and she runs a marketing blog in her spare time. Growing a brand’s reach by cooking up a long-term growth strategy is her forté. Connect with her on Twitter, LinkedIn, Facebook and visit her website.