In light of Facebook’s recent focus on local commerce–like the little icon of a storefront at the bottom of your mobile app–it’s obvious 2016 is the year Facebook decided to step up its game in the business community. In fact, an article in Forbes said the major social network had the potential to dominate commerce and business advertising in the near future.
This means smart Facebook advertising is more important than ever.Smart #Facebook #advertising is more important than ever. Click To Tweet.
Like any advertising campaign, your Facebook marketing is only as good as its return on investment (ROI); but the ROI for social media marketing can often feel like a “luck of the draw” scenario. It doesn’t have to be that way, though. When you’re tracking the right data points, you can avoid a “fingers crossed” approach and start making decisions based on real, useful information.
How to Avoid Metrics that Don’t Matter (As Much As You Thought They Did)
Working in all things data and metrics, we know some metrics are more important than others. In fact, some information regarding social media campaigns is commonly overrated. Here are a few examples of common Facebook marketing metrics:
- Click Through Rate (CTR)
- Cost Per Click (CPC)
It might sound crazy (especially since these are some of the most common advertising metrics around), but CTR, CPC, Reach, and Impressions shouldn’t have the majority of your attention. Are they useful? Absolutely! Are they the most useful? No, and here’s why:
CTR (the number of people clicking your ads versus the number who don’t) is not the end of the conversion funnel. Conversion funnel refers to the decision-making process potential customers go through. For an eCommerce website, the conversion funnel ends when a customer clicks “Submit Order.” For many companies though, the online conversion funnel ends with an inquiry email, a filled-out contact form, or a phone call. Unless website views is the end of your conversion funnel, CTR is only a blip on your data reporting radar.
Impressions and Reach are even further from the end of the conversion funnel, diluting the relationship they have with your advertisement’s ROI.Crazy enough-CTR, CPC, Reach, and Impressions shouldn’t have the majority of your attention. Click To Tweet
Tip: Track Data Late in the Conversion Funnel
For a lot of Facebook advertisers, the conversion funnel looks something like this:
- Reach (You, the seller, select the target audience)
- Impression (Audience sees your advertisement)
- Click (Potential customer visits your website)
- Engagement (Potential customer finds what he/she is looking for)
- Action (Potential customer becomes actual customer)
Action is the most important part of this process because it marks the moment your investment produces a return. Every other data point you track should focus on boosting the number and quality of “actions” your site gets.
A few Facebook advertising data points you should definitely pay attention to include:
- Number of Actions
- Cost Per Action
The first metric is Spend–a pretty simple concept that happens before the conversion funnel begins. In short, Spend is the total amount of money you invest in your Facebook campaign.
The second metric, Number of Actions, refers to data you can only gather at the end of the conversion funnel: how many people took your desired action (converted into a customer, called your business, bought your product, etc.) Using this information, you can determine your CPA (Cost Per Action). For many campaigns, this is the rawest indication of the campaign’s success. Every other dataset that happens between these points is simply there to help you refine your campaign and guide viewers toward the action.
Measuring campaign success (the easy way):
- For every person who reached the Action phase, how much money did you make?
- Is this amount more than you spent getting the customer to reach the action?
- If your goal is to increase revenue, the sum of your CPA should be less than your revenue.
The only exceptions are campaigns that aren’t designed to turn a profit. If you simply want to drive traffic to your website and increase awareness, the amount of time people spend reading your content could be more important than revenue.
A Quick Note About Frequency
Frequency refers to how many times one user sees a particular ad. It’s easy to assume that greater frequency equals a greater chance of success, but this isn’t always true.
The purpose of your advertisement determines how many times you want to show it to the same viewer. Driving traffic to a blog post, for instance, may not require the same repetition as a product advertisement because buying product involves a longer decision-making process. Similarly, the conversion funnel may be longer for an ongoing service or large, expensive product than the conversion funnel of a smaller investment, like a pair of shoes. Because people take longer to make bigger financial decisions, it makes sense to show them your ad multiple times.
Getting the Most Out of Your Social Media Strategy
At iDashboards, we believe data drives smart and informed business decisions – from a big picture scope like project management to granular the data derived from social media ad campaigns. Our goal is to help companies succeed by giving them access to clear-cut, efficient, and digestible information. To learn more about what we do, get in touch with a member of our team today.
Which datasets have you found most beneficial for your Facebook advertising campaign? Start the discussion by sharing this blog on social media!