Have you checked Facebook’s help article on Facebook ads metrics. It covers a wide range of metrics in detail, yet it is long and overwhelmingly difficult for beginners to understand.
Instead, we have created a simple Facebook ad metrics guide for you to follow.
These ad metrics will help you set a strong foundation to check your ads performance. Moreover, it will also help you maximize your ROI from social media investments.
Moreover, the KPIS and metrics also varies by the campaign objective and end goal.
The only KPIs (Key Performance Indicators) that matters to a profit generating entity is the ROI on sales.
Your Ads Manager reporting dashboard will show your campaign, ad-sets and ad performance similar to the following image-
- 1. Engagement and Cost Per Engagement (CPE)
- 2. Click-Through Rate (CTR)
- 3. Relevance Score
- 4. Cost Per Mille (CPM)
- 5. Conversion or Sales
- What next?
1. Engagement and Cost Per Engagement (CPE)
Cost Per Engagement = Total Ad Spend / Total number of Engagement
As shown in the earlier image – you can check the Engagement and CPE for your Campaign or Ad Set or Ads in your ads dashboard. This way you can easily distinguish between well performing ads versus the duds.
If the engagement number is high and the cost per engagement is low, then the ads are performing better than usual.
As you might already know – Facebook wants to keep users within its own platform. The Facebook algorithm promotes posts that are engaging because it keeps users spending more time in the Facebook platform.
More time spent in Facebook = Facebook being able to monetize the users attention = More Profit.
Posts that have above average like/comment/share, send signals to Facebook that the post is doing well. That is why posts that are engaging get higher ranking and visibility in Facebook’s newsfeed algorithm.
The same logic holds true for posts running Facebook Ads as well. If the ads post has a higher level of engagement, then it gets more organic impressions. And in return, the ad turns out to be cheaper as well.
Pro Tips for increasing Engagement:
Running engagement based campaign can help optimize your ads delivery towards people who are more likely to engage. This will show your ads to people who are more likely to engage.
Including texts that mention the audience to like, comment or share is against Facebook’s Terms of Service. The ad content has to entice the audience to engage.
2. Click-Through Rate (CTR)
CTR = Clicks / Impressions
In a sales funnel – there is Awareness – Consideration – Conversion.
When a prospect clicks on your ads, the prospect is considering your offer. This is an indication of showing interest. Therefore, the Click-Through Rate measures how many people were interested in your offer out of 100 people who saw your ad content.
When the CTR is higher than the average, the Facebook algorithm understands your Ads and offer is good. In Facebook the CTR also impacts how often your ads shows up and also the cost to show the ads.
Pro Tips for increasing CTR:
Always have a Call-To-Action (CTA) in your ad copy and offer. CTAs help ad viewers to take actions if they are interested in your offer. This increases Engagement as well as Click-Through-Rate for your ads.
3. Relevance Score
As marketers, the term “relevance” is one the most important thing to consider and focus on. Relevance determines whether your offer matches with the audience you are targeting
The Facebook Ads manager will show you the Relevance Score on the “Ads” level after 500 impressions on your ads.
If I invested in ads for mens travel bag, but target it towards women 15 – 25, what would happen?
Firstly, Facebook would gladly take your money to show the ad.
There might be some women who might consider buying this for their boyfriend or husband. However, the product would not be of high interest to women, especially aged 15 – 25 (being single, they would not have a significant other to buy it for).
Secondly, since the ad copy would not entice the audience, the engagement rate and click-through-rates will be low. Facebook’s algorithm will figure out that the ad is not a good fit for the specified audience. The combination of this all results in lower ad Relevance Score.
Pro Tip for increasing Relevance Score:
Relevance score can be improved by testing the ad copy to different interest groups in “Ad Sets” level. Moreover, Relevance score is just an indicator of how the ad copy/offer is performing on the targeted audience. Sometimes ads with lower Relevance score can also result in higher number of sales.
A Relevance Score of 10 means you are most likely paying the lowest CPM compared to all the other bidders targeting the same interest.
4. Cost Per Mille (CPM)
CPM also knows as Cost Per Mille or Cost Per a Thousand Impression informs you how much your ads cost for 1000 impressions.
CPM is a standard metric in media buying and it helps provide you an overall idea of cost comparison on different digital platforms.
For example, the Facebook Engagement Ads I run for Nepal101 usually hovers around CPM of $1. I usually launch a new ad campaign and check to see where my CPM is at after 500 – 1000 impressions.
If I see that my CPM is more than $1, I start checking other metrics to check if I have setup everything okay or not.
This is where it gets interesting and the reason why I put CPM as #4.
From my experience, the CPM is determined by not only the interest you target. The Engagement Rate, Click Through Rate and Relevance score has direct impact on your CPM.
If your Engagement Rate, CTR and Relevance Score is high, it usually also means the CPM will be much lower.
Eventually, CPM is like the blood pressure meter – it does not tell you exactly what is wrong, but it does inform you that something is not right.
Pro Tips for lowering CPM:
In Facebook, the CPM calculations factors in Engagement Rate, Click-Through Rate and Relevance Score. One way to test CPM performance is to use a single interest per ad-set, this sets up a controlled variable. After testing various interests and ad copy, use the interest group and ad copy that has the lowest CPM to maximize ROI.
Finding alternative and not-commonly targeted audience will help lower your CPM drastically.
5. Conversion or Sales
If you have properly implemented Facebook Pixel, you can track the conversion rate and sales figure in Facebook Ads dashboard. This will require a full integration of Facebook Pixel through your entire sales funnel. A full integration helps you provide numbers on each step of the funnel, from awareness to sales.
If you have a conversion rate of lets say .1% from the top of the funnel of awareness, an optimized campaign might be able to double your conversion to .2%. The Facebook algorithm is pretty amazing at optimizing conversion rates. How? Lookalike Audiences!
Pro Tips for increasing conversion:
Facebook Ad Campaign creation tool focuses on the sales funnel approach moving customers from Awareness to Consideration to Conversion.
Your eventual goal is to move the targeted audience down the funnel to conversion and sales. The best part about Facebook Ads is that you can optimize the campaign towards specific segments of the Funnel.
Let’s say you have ads running for the awareness and reach campaign. From the awareness and reach campaigns you got engagement.
Awareness = 1 million reach ; Engagement = 50,000 (5% Engagement Rate)
Moreover, you can create a bigger set of audience similar to who have engaged with the lookalike audience tool and run engagement campaign to move towards sales.
Engagement =50,000 ; Sales Conversion = 500 (1% conversion)
There will be few more customers who will move down the sales funnel with the engagement campaign and purchase your product. Now you can optimize your campaign again focusing on sales and conversion with the lookalike audience of people who already purchased.
After optimizing, you can invest a similar amount but get the following result –
LookAlike Customers Awareness = 1 million reach ; Engagement = 100,000 (10% Engagement Rate)
Engagement = 100,000 ; Sales Conversion = 2000 (2% conversion)
Majority of the beginner advertisers tend to make a common mistake of not targeting the right audience.
If you are a beginner or even an experienced advertiser, make sure to check out the guide on using Facebook Audience Insights tool to find the right audience. This will help build a strong foundation for finding your audiences.
I will write more on custom conversions and creating LookAlike Audiences to increase you digital marketing ROI. Moreover, also provide you with insights on a few helpful tools to supercharge your marketing campaigns.
How about you? What are the essential Facebook Ads metrics that you check regularly to measure you campaign performance?