When you have successfully run Facebook ads for your business page, the job is not yet over. In fact, it’s just starting. Although Facebook has great tools to make ad targeting more accurate and thus increase your chances of reaching the right audience, you still have to monitor each ad’s performance.
The following are key performance indicators (KPIs) to help you evaluate the performance of your ads. These metrics will help you identify problem areas that you can improve on and strategies you can keep on implementing.
The click-through rate reflects how much interest an ad has generated in an audience. The number of people who clicked on an advertisement is measured against the number of people who saw the ad (also referred to as impressions). So if 20 people saw your ad and 5 people clicked on it, then that ad’s CTR is 25%. The higher the CTR, the better. It means that the ad resonates well with the target audience.
According to experts, you should strive for a CTR between 2-5%. However, the average CTR for Facebook ads is around 0.9%. To view your ads’ CTR, simply go to Facebook’s Ads Manager, go to the ‘Ads’ tab, then select ‘Performance and clicks.’
The cost per click is the amount you are charged every time someone clicks on your ad. CPC varies a lot according to a few things. One is peak times. If your business is related to the holidays, you might get a higher CPC during the holiday season. The competitiveness of the industry you are in will also affect your CPC.
The average CPC for Facebook ads is around $1.72. Your ads’ CPC reflects the efficiency of your campaign. This is how much you are paying to get one user to your page, website, or app.
Another metric to look at is the cost-per-purchase. You can get your CPP by dividing the total amount spent on ads by the total number of purchases. This reflects how effective the ads you run are to convert an audience to an actual paying customer.
When looking at the CPP, it’s important to take into account the AOV or average order value. To keep good profit margins, the CPP must be lower than your AOV.
Measuring your ads can’t get any more straightforward than checking their relevance. For every 500 impressions, Facebook calculates an ad’s relevance by how users interact with it. Quality Ranking judges your ad in comparison with other ads vying for the same audience. Engagement Rate Ranking evaluates your ad’s estimated engagement rate compared to ads for the same audience. And Conversion Rate Ranking looks at your ad’s estimated conversion rate vs competitors.
Facebook’s formula for computing these metrics is not known, however, these are important KPIs to measure how likely the audience will react to your call to action.
It’s important to keep track of your ads for one reason: to make sure that your money and effort are being used well in targeting audiences