Digital Marketing Knowledge Bank

Digital Marketing Knowledge Bank

Facebook marketing – What results should you measure?

26.08.2023 | General

Facebook marketing and its results

Many who engage in Facebook marketing find themselves pondering whether their ads succeeded and how the next ad could be better than the previous one. Especially when advertising on Facebook, the Business Manager presents a palette of numbers that should be used to assess what was good and what was bad. CTR, CPM, CPC – all these metrics appear at once. I’ve gone through that phase myself, thinking I was successful when I achieved new click records for my ads after a few campaign iterations. However, many who do Facebook marketing base their result evaluations on clicks, website visitors, and likes. Do these metrics directly relate to sales? No. Originally, Facebook marketing should be measured as close to sales as possible. The most valuable data you can gather through Facebook ads is conversion data.

The data produced by Facebook can roughly be divided into two categories from a sales perspective: primary metrics, which have a direct impact on sales, and secondary metrics, which are loosely connected to sales but generate information for tasks like advertising troubleshooting.

Primary metrics include, for example:

  • Leads
  • Purchases

Secondary metrics include, for example:

  • Clicks CTR (= click-through rate)
  • Engagements on posts
  • Reach
  • Impressions
  • 3-second video views
  • Ad recall lift
  • Frequency CPC (= cost per click)
  • Add to carts
  • And so forth

Dont settle for less than leads

Leads are the first truly valuable metric that you should aim for in advertising. From there onwards, the results of Facebook marketing should be measured if you want to see clear and traceable changes in your organization’s sales. What could be better than obtaining contact information from people interested in your product/service? Leads can also be categorized based on their conversion rate, from lowest to highest, for example:

  • Newsletter subscriber (lowest conversion rate)
  • Free content downloader
  • Self-initiated contact, e.g., quote request (highest conversion rate)

Regarding leads, you can evaluate their value in relation to sales through their conversion rate. Here’s an example of sales generated by a lead-generating ad and how you can calculate it:

  • An ad campaign generates 20 free content downloader leads with an average conversion rate of 10%, and sales capitalize on them.
  • The ad campaign’s budget was €100, and the average purchase is €250.
  • So, two sales with a combined value of €500 are closed, with an ad budget of €100.
  • This way, you make €500 worth of sales with €100 in marketing costs.

Aim for Purchases

Purchases have the interesting aspect that you can see precisely what the ad has generated in monetary terms from Facebook marketing data when you set the ad goal to purchases. Direct purchases, completing reservation forms, can be hard to achieve directly from a cold audience, especially if it’s not a remarketing audience. A direct purchase is always warmer than a lead, but leads aren’t bad either. Primary results of advertising should be relevant to your sales and media budget. Realistic expectations and patience help in result evaluation.

What are Secondary Metrics Good For?

Secondary metrics can help identify necessary optimizations for campaigns. For instance, a large number of website visits but a low conversion rate might simply indicate an issue with the landing page. A low click-through rate, on the other hand, might signal that the ad isn’t engaging enough or the content doesn’t resonate with the target audience. You shouldn’t be alarmed by these secondary metric figures. For instance, if CPM (Cost Per Mille, cost to reach a thousand people) is high, it doesn’t necessarily mean an issue. These metrics can be used for fine-tuning advertising.

Secondary metrics can also be used to create custom audiences. For instance, from website visitors, cart adders, and so on, you can create new target groups to offer different ad content, depending on where they are in the marketing funnel. This way, potential customers who have performed low-threshold conversions are gradually filtered as they move closer to making a purchase.

However, it’s important to keep in mind that true success is indicated only by leads and purchases. Here are a few examples of interpreting secondary metrics:

  • High CPM – You found a precise target audience.
  • Greater reach – You succeeded in creating content that gains organic visibility.
  • Poor CTR – The click headline didn’t work this time, or the ad has become stale.
  • High frequency – The ad is shown too frequently relative to the target audience.

In Conclusion I will certainly write more about these Facebook marketing metrics over time, especially for optimizing ads to extract maximum efficiency. Additionally, I will cover creating custom conversions. Ultimately, succeeding in advertising involves reading metrics that are important for your own sales or comparable to them. If you’re planning to create Facebook ads in the near future, make sure you set a conversion goal.

-Vili

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