12 Must-Know Facebook Ad Metrics Every Marketer Should Track
Paid ads are like an investment. You pour money into ads and hope that you will get more money back. But like any other investment, there is a difference between hope and reality. One metric in Facebook Ads Manager will partially answer whether your ads are performing as you had hoped.
Return On Ad Spend (ROAS)
This metric tells you how much money you get back from every dollar you spent on Facebook ads. It is calculated with the following formula:
Revenue / Ad spend
For example: (your revenue) $1,000 / $500 (spent on ads) = ROAS 2
That means that for every dollar you spent on Facebook ads, the platform generated $2 revenue. All that sounds great, but keep the following in mind: Facebook knows a lot about you, but you need to assign values to conversions. I cover that a bit further below. Revenue and profit are different things. So, you will have to do your own calculations to find out if your Facebook ads are actually making profit for you.
To calculate the real Return On Investment (ROI) of Facebook paid campaigns, you need to include costs for setting up and managing your ads. This metric is especially useful to ecommerce stores because they sell directly and know for which price. For service providers, ROAS is harder to calculate because it is hard to assign a price for someone who, for example, signs up to a newsletter.
How Much do My Facebook Ads Cost?
Running ads costs money. To keep track of how much, you can use over 60 Facebook Ad metrics. Here are some interesting ones that can give you valuable insights.
Amount Spent
This metric tells you how much money you have already spent on a Facebook ad or campaign. Although you can set daily budgets to keep your budget under control, it is absolutely worth checking this metric regularly. If the amount is low, for example, that can mean nobody is seeing or clicking on your ads.
Cost Per Mille (CPM)
This metric answers the question how much it costs to show your ad 1,000 times. If you run awareness campaigns, it is useful for two reasons:
- CPM is a metric that is used by other ad platforms or websites that sell advertising space. It makes it easy to compare the price to advertise on different platforms. On the other hand, it doesn’t tell anything about how profitable the ads are.
- The CPM also lets advertisers easily compare the cost of different campaigns on the same platform. If, for example, the CPM for one Facebook campaign is $10 and $5 for another, it is worth diving deeper to understand what causes this price difference. Is it because of the timing? The copy of the ad? The audience? The frequency? Etc.
Cost Per Click (CPC)
Facebook has two metrics for clicks. CPC links are more important than CPC All, because it tells you how much a link to your landing page costs. A click that is, for example, included in CPC All is when someone clicks to see more of your ad copy. CPCs fluctuate and the price Facebook charges you depends on factors such as timing, audience size, the services or products you promote, and so on. Yet, the CPC is a powerful metric that is worth keeping your eyes on:
- It gives you a clear idea of how cheap or expensive clicks to your site or web shop are.If, for example, you pay $10 per click to sell a $3 product, it may be time to rethink your paid advertising strategy completely.
- A high CPC may also be a sign that your landing page has an issue. I will get back to that further below.
- CPC is also a useful metric to compare the performance of campaigns over time, or to find out which ads are repeatable or need optimization.
Cost Per Action (CPA)
Ideally, people take action when they see your Facebook ad. That can, for instance, be a click to your landing page, watching a video, sharing your page, and so on. The CPA metric shows you how much these actions cost. It is also good to:
- Use the CPA as an internal benchmark. Simply put: if you can decrease it, you will get more at a lower cost.
- Compare the CPAs of different actions. If you take the bigger picture into account, it may turn out that you have been running ads to trigger people to take actions that don’t boost your business.
Do My Facebook Ads Actually Contribute to My Goals?
The best way to find out if your Facebook ads help you actually achieve your campaign goals is to look at conversion metrics.The total conversion value is self-explanatory. But it can also be misleading. If you define, for example, a Content views conversion Value or App activations conversion value, you may get a total skewed version of what your conversions actually are worth.
CTR (Click Through Rate)
The click through rate metrics is the calculated percentage of clicks compared to how many times your ad was displayed.If, for example, your ad was shown 1,000 times and the link to your site was clicked 10 times, your CTR is 1%. The toughest part is to decide whether your CTR is good or bad. One way to know this is to run several ads simultaneously and see which one has the highest CTR. But this approach is risky too. A higher CTR may not result in higher conversions.
The 4 Biggest Mistakes Facebook Advertisers can Make
The MeasurementMarketing.io team has taught and supported hundreds of businesses with measuring and optimizing their marketing campaigns for success. There are 4 mistakes that keep returning and I figured it’s worth dropping them here so you won’t need to make these mistakes yourself…
Mistake 1: Misunderstanding Metrics
Like any other industry, digital marketing is filled with jargon. It’s easy to misunderstand what something is and is not. Metrics are often confused with:
- Business goals
- Key Performance Indicators (KPIs)
- Dimensions
- Segments
Metrics are just the numbers you add, subtract, multiply, and divide. Dimensions, on the other hand, are how you sort those numbers. For example, you might have a “Dimension” that is the Traffic Source and then the “Metric” might be the number of users from that traffic source. Always remember though, you’ll always first start with a question in mind and then you jump into the data to find the answer (never the other way around!).
Mistake 2: Ignoring Data from Facebook
Most businesses understand that data is important. But in two situations, it is tough to make data-driven decisions. Facebook Ad Manager contains a lot of data, but that is often overwhelming. Not all businesses have the know-how or resources to even look at numbers, charts, graphs and therefore simply ignore them.
Focus on just ONE THING at a time. I like to take the advice I learned from my buddy Jeff Sauer at DataDrivenU.com…“Assign one KPI per team member.” This keeps it really simple. If it’s just you, focus on the ONE metric that needs the most improvement. As your team grows, you can expand your focus (because you’ll have more people to help!).
No Access to Real-Time Data
This happens, for example, when an external party is running ads and reports monthly. By the time decision makers know what’s going on, the monthly Facebook marketing budget is already gone. Businesses that ignore, or don’t have access to Facebook data, lose a lot more than money. The target audience may, for example, have seen a Facebook ad too many times. It will be an expensive challenge to turn that around.
Mistake 3: Focus on the Wrong or too Many Metrics
Facebook, and other ad platforms, make it very easy to set up your first campaign. They promise you will get results without having to lift a finger. And then reality kicks in. At one point, you need to understand the true value of data. But as I said in the beginning of this article, it can feel overwhelming, confusing or for some, not enough. The opposite reaction of analysis paralysis is wanting to have even more data to make complete data-driven decisions. Facebook Ads has a ton of them available, like
- Photo views
- Unique achievements unlocked
- Unique ratings submitted
- Cost per unique level completed
- Etc.
Mistake 4: Ignoring Data from Other Sources
Customers start their journey after they have clicked on your Facebook ad. But as you know, a lot can go wrong when the user lands on a site or web shop. Think, for example, of:
- The contact form may not be working.
- The site might not be optimized for a specific device.
- The conversion tracking may not be set up correctly.
- The landing page may not be aligned with the message of the ad.
- Your actual revenue may differ from what Facebook or other platforms, like Google Analytics 4, shows.
I am not claiming that Facebook Ad metrics are worthless, but you need to pick them carefully. Sometimes the best “source of truth” will definitely be Facebook Ads. But sometimes (often!) it won’t be the best source for the answers you’re looking for. To measure your actual revenue, for example, it is wiser to rely on data from your cart, or (even better!) your merchant processor (platforms, like PayPal, Stripe, Authorize.net, etc.).
I hope this information will help you become a better Facebook marketer or give your business a better understanding of Facebook Ad metrics and how they fit in the bigger picture of digital marketing.