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Top 3 Facebook KPIs – Your Ultimate Guide to Facebook Ads

According to the company’s data 1.59 billion people use Facebook monthly and over a billion daily. This means that over 65% of Facebook users log in everyday which makes the claims that the biggest social media platform is not cool anymore clearly exaggerated. With so many active users eager to reveal their interests, preferences, relationships, locations etc., Facebook simply begs to be used by marketers searching for potential clients. Today, if a brand wants to be taken seriously, it must take good care of its Facebook presence and advertising activities. Statistics show that Facebook’s advertising revenue is constantly growing and hit 4,299 million dollars in 2015 which constitutes an impressive leap from 1,798 million dollars only 2 years earlier.

What makes Facebook so attractive to marketers?

Facebook allows brands to face their audiences and literally enter into interactions with them. This potential, when handled properly, can generate brand loyalty and better insights into customers’ opinions, needs and interests. Research proves that people like Facebook pages not only to show that they support a certain brand, but also to gain something for themselves. They want to receive regular updates, discounts, take part in contests or share their experiences as a brand’s users. If companies put efforts into making their brand pages attractive, they will bear fruit in the form of effective advertising campaigns. Facebook allows marketers to gain a detailed knowledge about the behavior of people who liked their pages and target them with tailor-made campaigns. Moreover, Facebook is constantly improving its advertising platform and adding new functionalities such as retargeting ads or targeting by lookalike audiences. Other major improvement was the introduction of dark posts - news feed-style ads that can also be targeted by many different factors (for example, specific job titles) and appear only on news feeds of targeted customers, but not on the company’s wall. Dark posts are displayed to people who are most likely to react to them, and on the marketer’s site, allow for conducting of A/B testing where you can send different add versions to different sectors of your audience and see what works best. Facebook marketers already know that it’s not effective to simply set up an ad and cast it out using the widest net. You need to dive into your audience segments and fit your ads to their interests.

How to get started?

At datapine we worked our way to effective Facebook advertising over the years and in this blog post we share with you a guide to Facebook ads and most important Facebook KPIs you need to track. You can learn from our experience, without repeating our mistakes. We are convinced that in comparison to Twitter and LinkedIn, Facebook has by far the most user-friendly interface and offers the best targeting options. Especially LinkedIn has a lot of limitations, for example you cannot exclude mobile traffic or track conversions without a lot of effort. Reasoning by elimination, we decided to stay with Facebook and stick to its paid ads. We will also show you how to optimize your campaigns to get direct conversions or desired actions whether it’s a signing up for a newsletter, downloading a whitepaper or starting a free trial. As a side effect, you will most probably also acquire more Facebook fans and see more users’ interactions but that’s not the main point here. The focus of this blog post is on performance-based conversion optimized campaigns -  or as Facebook puts it - “Send people to your website” campaigns.

We will start with some general tips on setting up your first campaign and then discuss in detail the 3 KPI areas you need to track to optimize your performance. Please mark that we will provide instructions for the google ads interface but a more advanced user may be using Facebook Ads Manager.

1. Setup Up your Audience: Location / Age / Gender / Language / Interests

Facebook Ads Targeting

Targeting the right audience is the first step for a successful campaign. If you have already set up custom audiences then that’s great because those are the people you should start with as they are most likely to convert (for example, they have already visited your website). In the example above however, we choose a broader approach. We are targeting 170.000 English-speaking users in the USA, aged between 24-50, who are interested in “business intelligence”. If you don’t have custom audiences like e.g. emails lists, Facebook offers a wide range of other targeting options, from specific interests, job titles to more general “behaviors”. Of course, the targeting options you choose will depend on your industry and the kind of business you run. In general, it’s a good idea to target by interests, relevant topics in your industry, related other Facebook pages like news sites or communities with a decent amount of fans, or even your competitors (who will never even know about it). Since recently Facebook allows to combine multiple interests for one audience so you can get creative and build a well targeted audience on your own. For a really specific (custom) audiences it’s worth to start a campaign with only 3000 people targeted because odds for a high conversion rate are good. However, if you choose a broader approach and target by interests, we recommend you to gather at least 15.000 people in your audience for a start, and in the long run you should aim at finding multiple audiences with over 100.000 well-converting people.


2. Set up your Budget and Bid Options

Facebook Ads Budgeting

We personally recommend you to pay for your campaigns by impressions (automatic optimized CPM). You may not be used to this option, as for other online marketing campaigns, like Google AdWords,  we usually pay per click (CPC). However, we know from our experience that with well-targeted and CTR optimized ads you will get lower click prices (CPC's) if you get charged for impressions compared to a manually-set maximum click price. Feel free to test if for yourself and share your experience, but the main problem here with paying per click is that you don’t benefit that much from really well performing ads (with pretty high CTRs). Moreover, if you go down too much with your maximum bid, you will not get any impressions at all.

Therefore, just like in the screenshot above, choose from “Optimization for ad delivery” the impressions option (pay per impressions) and not the Facebook-recommended “Link clicks to your website” (pay per click).

Moreover, we recommend setting up campaigns with a daily budget instead of a lifetime budget. The daily budget will depend on the size of your audience. In our example the audience amounts to 170.000 people and with a daily budget of 100€ Facebook estimates that you will reach 14.000-37.000 people daily. At the beginning it’s fine to place the bid more or less in the middle of Facebook’s estimation - so we will reach roughly 25.000 people out of 170.000 per day. If you plan to your campaign for several weeks, we suggest setting up a daily budget to reach about 1/6 to 1/8 of the whole audience per day. Then you can be sure that the frequency of your ad will not go up too fast and your performance will be stable.

3. Set-up your ads

Next step is designing your ads. You should keep in mind what behavior you expect from your audience and choose a suitable form with the matching call to action. Facebook made it a bit more difficult by imposing some design restrictions you should stick to. Firstly, the recommended picture size is 1.200 x 628 pixels, that is an aspect ratio of 1,9:1. It’s highly recommended to include a call to action button, depending on what you expect your audience to do, e.g. sign up for a newsletter or buy your product. And one more limitation that often poses a problem – the picture that goes with your ad should include maximum 20% of text. You can check it with Grid Image Checker Tool to be sure that your chosen image will get through Facebook’s gates.

The next important point to consider is choosing where your ad will be displayed (placement options):

1) Desktop News Feed - the ad will show up in the news feeds on desktop computers, which we learned has the highest CTR and the highest CPM among all the options

2) Mobile News Feed - the ad will be displayed in news feeds only on mobile phones

3) Desktop Right Column - the ad will show up in the right column on desktop computers

4) Mobile Right Column - the ad will be shown in the right column only to mobile users

5) Instagram - relatively new option to show your post on Instagram even if you don’t have an Instagram account

We advise you not to mix multiple placement options in one ad group. Firstly, because the placements have different requirements regarding the length of the text you can add, the headlines, link description and image dimensions. To make sure you have the best ad possible, you would have to create a separate ad set for every placement. Secondly, it’s more difficult to analyze your performance afterwards when you mix multiple placements because each of them differs in terms of KPIs you want to track and optimize.

Here is an example of a well-designed ad for the desktop news feed:

Facebook Ads Example

We know from experience that questions in the ads can do wonders for CTR so choose them rather than simple statements. Additionally, don’t make the ad sound too promotional but rather informative - such ads perform way better. We tested it with different call-to-action buttons. The “learn more” button performed way better than the “download” or “sign up” buttons (even if our intention was that users download a whitepaper or signup for a free trial). We advise you to A/B test as many ads as you can. By conducting tests on different texts, headlines, images, link descriptions and call-to-actions buttons you will learn on your own what works for your specific audience.

All in all, when setting up your campaigns, remember to act according to a well-thought-out strategy. Start by finding the right audience, target those users with specific and relevant ads, and always make sure that after clicking on your ad, people will enter a relevant landing page. Don’t mention in your ad what people will not find on the landing page, because then even if the CTR will be high, visitors will not convert and you will be pouring money down the drain.

Now your ad campaigns are up and running and you can start measuring your performance with the right Facebook KPIs.

Top 3 Facebook KPIs You Need To Track

Important KPIs will vary depending on the industry, the company and its goals. However, although there might be some discrepancies from industry to industry and some variations as to what makes a KPI important for a business, there are top KPIs that all companies should be monitoring. Have a look at our top three categories of Facebook KPIs we think every company should take into consideration. We visualized them with our online data analysis tool that allows you to connect Facebook Insights and Facebook Ads to get the best overview of your data in an actionable format.

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1. Impressions / Reach / Frequency

First Facebook KPIs on our list consider impressions, reach and frequency. Impressions refer to the frequency of your ad being displayed, regardless of whether people will click on it or not. One user can see the very same ad more than once.

Reach is the total number of people that will get the impressions of your ad. Mark that impressions can surpass the reach, because users can see the same ad many times. We could also call reach the unique impressions.

Frequency is simply the number of impressions divided by reach. See the relation between these 3 metrics on the following chart:

Facebook KPIs: Impressions, Reach, Frequency

In the example above you can see that after 5 weeks we reached about 40k unique users with nearly 80k impressions. Therefore our frequency score was almost 2. It’s critical to track impressions, reach and frequency to avoid the situation when your add is displayed too frequently to one user – this leads to a decreasing performance,  as displayed on the chart below:

Facebook KPIs: Frequency & CTR Development Over Time

As a general rule, latest when you reach a frequency score of 2 you should change the ad you are showing to your audience. At this point you will experience yourself how the CTR of your ad goes down and the cost per conversion increases. We know from experience that after you’ve reached a frequency score of 4 for a particular audience in your ad set, it will be very difficult to convert these users even if you change the ad, because they already saw your company’s placement 4 times.

2. Cost per mille (CPM) and Click-Through-Rate (CTR)

Next crucial Facebook KPIs refer to the costs of your campaign. As we mentioned earlier we recommend you the pay per impressions scheme. You will see on your own that the CPM will vary a lot between your audiences. The more detailed targeting you apply, the higher CPM you will reach. Of course, the CPM will be different for the different placement options. The desktop news feed placement is by far the most expensive option with CPM prices between 2 and 25$. However, you should always consider your CPM prices together with the CTR because these two factors in the end will determine your Cost per Click (CPC). Besides tracking your CPM and CPC over time like on the two charts above, it is recommended to analyze different placement options the way we do it on this chart:

Facebook KPIs: CPM & CTR by Placement

Such analysis will help you to identify best performing placements and avoid the useless ones. Even if the data in the chart is not representative, you can expect to see similar relations between the different placement options.

3. Cost per Clicks (Website Clicks) and Cost per Conversion

As the main goal of our campaigns is getting clicks to our website and converting them to the desired action (download a whitepaper, sign up for a free trial etc.), the actual cost per click and eventually the cost per conversion are the most important Facebook KPIs to track. In these campaigns we focus on website clicks – not about clicks to our Facebook page, page likes, post likes or shares. These interactions would count in other campaigns with different goals (for example page engagement) where any of those clicks would be our expected results. Just as reminder, you cannot do proper Facebook advertisement before setting up your individual conversion tracking.

In the end,  the CPC is influenced mostly by your targeting, placement and your CTR, which in turn is mainly influenced by how well you fit your ad to a specific audience and your current frequency. The cost per conversion on the other hand is mainly influenced by your CPC and your conversion rate on the landing page.

Facebook KPIs: Cost Per Click, Cost Per Conversion & Conversion Rate by Placement

The above chart analyzes different Cost per Clicks, Conversion Rates and the resulting Cost per Conversion according to the different placement options. Notice that the CPM for the desktop news feed placement was by far the most expensive, but eventually because of its high CTR and conversion rate it reached the smallest cost per conversion and that is what matters most.

When you compare desktop placements to the right column placements, it seems that you can have a much lower CPC for the right column placements but be careful – it will be more difficult to convert people from there. However, this doesn’t seem so surprising if you take into account that people who click your right-column ad saw a picture with a short headline (25 signs) and a short text of 90 signs. On the other hand, with a news feed ad you show your audience a bigger, higher quality picture, a suited call-to-action button and additionally a link description with 200 more signs, where you are able to explain in more detail what they can expect after clicking your ad.

At this stage if you can monitor and analyze your cost per conversions in detail you are able compare them in relation to other social media platforms or even other online marketing channels, for example Google Adwords. At the end you want to focus on the best performing channels and make the most out of your marketing budget!

As we’ve already mentioned in our article about the most important google analytics KPIs, this isn’t the end of your analysis journey yet. By tracking the revenue from your conversions, which is obviously not the easiest task, you can calculate your profit per conversion and your return on investment.

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The Facebook Ads data analysis we demonstrated and explained in this blog post is just a fraction of capabilities of our online BI tool. We provide you with connectors directly to your Facebook Insights as well as Facebook ads data. Learn more about how datapine can bring your Facebook advertisement to the next level – start your free trial today!