Facebook as we know has grown to become a complicated ad network with way too many options, settings, placements, and metrics over time. Thanks to Facebook’s ability to legally breach privacy (or not?), there is so much data in there to play with, leading to a very complex platform. Thus, the objective of this piece is to make it easier with a few metrics of focus, a few secondary metrics, and a run-through on how to wrap the mind around it.
We can group the KPIs (Key Performance Indicators) on Facebook Ads into a few easy categories which are obvious and high level:
- Impressions / Reach / Frequency (The demographic & placement metrics)
- CPM/CTR (The ad copy metrics – graphics, text, relevance, etc)
- CPC and Cost per Conversion (The product and bottom-line metrics)
The focus starts with the first one in optimizing and goes down to the last. One cannot be optimized efficiently when the previous one is not set right.
However, to make those 3 KPIs shine, there are many vanity metrics which we can focus on about 5-10% of the time, but not more:
- Likes and Theoretical reach
- Total number of click-through rate and/or video views on your ad
- Relevance Score
As the name suggests, they are vanity metrics and not to be focused too much on, but it helps.
Here are the important KPIs that drive the backend of the process outlined above:
- Total number of Conversion rates – Conversion of not just the final product, but all points of conversion across the cycle.
- Lead generation
- Generating sales
- Getting traffic to your website
- Frequency – Amount of times the ad is shown to the user matters a lot. If it’s too low, the conversion will be lower, if it is too high, the user would be irritated. The best number changes based on industry and the product and needs to be tested.
- Spend and ROAS
As we can see, the KPIs are stacked one on top of another based on the area we are optimizing and the priority for that period in time of the campaign. The KPIs are not equally treated at all times.
There are 100s of ad specific Facebook KPIs to address as well. To name a few:
- Cost per 3-second video plays
- Cost per achievement unlocked
- Cost per add of payment info
- Cost per checkout initiated
- Cost per Content View
- Cost per desktop add credit spend action
- Cost per desktop app story engagement
These are minor and specific KPIs that fall under the umbrella of primary ones outlined above.
The real professional approach towards this comes in when we begin to cross-reference the metrics and KPIs across various platforms to form usable-business-metrics. These are powerful drivers for success.
Facebook Ads & Google Analytics
When we collate data of Facebook Lead Generation or Facebook Ad Campaigns with that of Google Analytics, we receive further data like “Time on Site” for example. If user engagement is our objective, ads that have a higher Time on Site are considered preferable along with other engagement factors like page views per session or other trackable metrics.
Thus, using the wide range of Google Analytics KPIs allows us to fine-tune the analysis and deduction of results of a campaign with more data at hand with the ability to cross-reference.
Facebook Ads & Business KPIs
CLV, CAC, and more business metrics can be derived just by working on the data provided by the various metrics from the above platforms.
So what are the best numbers?
The best numbers for any campaign would depend on the business, industry, product, how well it’s tested, and more. There is no universal number. For example, an online bookseller who sells a $3 Kindle book cannot afford to spend more than $1.5 per conversion, while a coach selling a $4000 product (digital) can afford even $1500 per conversion. Their numbers will vary quite a bit.
So as a general thumb rule, we estimate Customer Lifetime Value (CLV) and deduce to the CAC (Customer Acquisition Cost) to determine the ad spend based on the monthly or quarterly targets set forth by the company’s marketing or sales department. Then, it’s a matter of optimization to increase ROAS (Return On Ad Spend) and other metrics over time strategically, carefully, and without compromising other areas like the quality of customers, for example.
Scalability to a campaign is achieved when the marketing funnel facilitates it. A newbie marketer will aim to spend $5 for a $15 digital product with no funnel. On the other hand, an experienced marketer will create products on the backend and spend $15 on a $15 product or more if needed to win the customer on the front end and capitalize on a 6 figure backend.
The major focus of optimization, in the long run, is to reduce CAC and increase CLV. Of course, not all in the hands of the marketer, for even the product team has shared responsibility to make the business future proof. A successful campaign is not focused only on the metrics from Facebook or the like, but one where the vision is business growth and the team working on it is capable of understanding the business side of the metrics.
So yes, this is beyond the Facebook ad campaign, but more towards marketing funnels and business products. Isn’t the difference between a ‘beginner’ and ‘expert’ arises from how long and how strong they can see and add value to a campaign?
About The Author: Mr. KEY – Karnika E. Yashwant has been an avid marketer leading blockchain projects since 2013 and executing Content Marketing for Fortune 100s since 2007. He is the CEO of Utopian Capital, an investment firm for blockchain technology, and the Founder of KEY Difference Media, an agency rated in numerous Top 5 and Top 10 lists in the Blockchain/Crypto space year after year. He can be reached at LinkedIn or Telegram.
