Unlike traditional media, social media marketing gives organizations the power to see ad performance results in real-time. Everything from click-through rates to audience engagement levels is easily accessible. You can also pull historical data, pause underperforming ads, and run test campaigns.
As social media platforms go, Facebook is by far the most popular for paid advertising. Most brands rely on Facebook and its ad algorithm to drive tangible results. Those desired outcomes could range from increasing awareness to converting more leads. But regardless of your end game, you want to know that your Facebook advertising dollars aren’t going to waste. Here are four tips to effectively evaluate your ad spend.
1. Leverage Automated Ad Rules
Launching a Facebook campaign is no easy feat if you’re new to social media marketing. Besides coming up with engaging visuals and text for your ads, you must figure out which audiences to target. Facebook may have billions of worldwide users, but it’s not a good use of your budget to focus on all of them.
But even with highly targeted campaigns, Facebook is a fiercely competitive platform. You’re up against numerous brands and messages and need to find ways to break through the noise. Fortunately, Facebook ad rules help you maximize your budget according to your campaign goals. For instance, you can pause underperforming ads once they drop below specific thresholds.
Say your goal is to achieve a certain return on ad spend, or ROAS, for online purchases. The objective of your ad is to increase e-commerce sales with a ROAS of 3x. Your ROAS of 3x represents a return of $3 in revenue for every $1 in ad spend. Once your online store campaign drops below 3x, Facebook’s Ad Manager will automatically pause it. This lets you adjust the ad’s creative aspects while directing more dollars to high-performing campaigns.
2. Choose Appropriate Objectives and Metrics
Most brands have more than one Facebook campaign running simultaneously. Each of these is designed to do something different. You might want one message to let an audience know that your company exists and can fulfill a distinct need. Another ad is meant to qualify leads for the sales team. Meanwhile, a third campaign is out there to convert leads into sales.
Each corresponds to various stages of the buyer’s journey and the traditional marketing funnel. However, if you choose the wrong campaign objectives and metrics in Ad Manager, you will get some misleading numbers. If your goal is to drive awareness, you’ll want to concentrate on traffic versus conversions. You probably also want to look at your cost per impression and click-through rate.
Likewise, if your main objective is to gain more leads, you’ll need to focus on reach and lead generation metrics. For instance, how many prospects did the campaign produce, and what’s the cost per lead? Yet, what you define as a qualified lead can also change from one ad to another. Maybe you want to grow your email list or have people fill out a product interest form. Whichever the case, you should know how much you’re spending to capture each prospect.
3. Determine an Acceptable Cost Per Result
Before you launch Facebook ads and campaigns, you should figure out an acceptable cost per result. You can measure cost per result at the campaign and ad level. Many campaigns include more than one ad version or series of messages. Depending on your goals, you can aggregate cost per result.
Let’s say the objective is to gain qualified leads. Your cost per result is measured against the number of prospects you added because of the campaign. You can also see this measurement for each ad or version. A lower cost per result might be more acceptable than a higher one or vice versa. It all depends on the offer and the campaign’s objective.
A series of Facebook ads that promote a free store event or giveaway won’t necessarily drive a lot of business. In this case, you probably want to see a low cost per result. However, messages that aim to convince leads to purchase a high-ticket item are another story. The results of these ads represent increased revenue and more value for your company. A higher cost per result is fine, as long as it’s feasible.
4. Understand How Frequency Can Impact Costs
With traditional media like television and radio, frequency is a vital consideration. You want to increase the chances your target audience will see or hear your message. You might spend x amount of dollars to have a radio ad run three times a week on local stations. In theory, a higher frequency gets you better results.
But with digital marketing and Facebook ads, a higher frequency can negatively impact your outcomes. That’s because the more an audience sees a digital message, the more likely they will develop ad fatigue. You may have experienced this by scrolling through your social media feed and seeing the same ad every day. More than likely, you’ve skipped over the message, ignored it, or chosen to hide it.
A higher frequency at the campaign or ad level can increase your cost per result. Once ad fatigue sets in, your audience is less likely to take the desired action. They’ll stop viewing, clicking, and purchasing. That said, you can use frequency metrics to make decisions about retargeting ads to specific audiences. An abnormally low frequency among a certain segment could indicate the need to re-run a campaign or ad. However, you would only target that niche instead of the whole.
Evaluating Facebook Ad Effectiveness
Measuring ROAS and making reasonable campaign adjustments are part of social media marketing. Knowing whether you’re getting the most out of your budget is essential with a highly competitive platform like Facebook. Using automated rules, selecting appropriate metrics, determining acceptable cost benchmarks, and understanding frequency’s impacts will reveal if you’re spending wisely.
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