4 Facebook Ad Metrics You Should Be Optimising
1. CPM (Cost-Per-Mille)
What is CPM?
The cost for 1,000 impressions of your ad. In other words, the price Facebook charges to show your ad 1,000 on its advertising network.
Remember, the lower your CPM the better value you are getting for your Facebook ads and ultimately less you are paying to advertise on Facebook.
How To Calculate CPM
CPM is calculated by dividing the total amount spent on a Facebook ad campaign by the total number of impressions, then multiplying that by 1,000
For example, if you spend £100 and get 1,000 impressions your CPM was £100
£100 (spend) / 1,000 (impressions) x 1,000 = £10 (CPM)
Why CPM Matters?
Carefully monitoring and finding ways to improve CPM is a great way to get better value from your Facebook ad spend and increase ROI. When you lower your CPM, your cost per click (CPC) and cost per acquisition (CPA) also typically decrease. In other words, you will get more conversions from less spend if you lower your CPM.
How To Lower CPM
- Improve audience targeting
- Control frequency
- Test ad copy and creative
- Contol your placements across Facebook and it’s ad network
2. CPC (Cost-Per-Click)
What is CPC?
CPC is the average cost for each link click. The lower the CPC the cheaper each link click is costing you on average. If you opt for a CPC bidding strategy on Facebook you will only pay when someone clicks on your ads.
How To Calculate CPC
CPC is calculated by dividing the total amount spent by the total number of link clicks
For example, if you spend £100 and your campaign generates 100 link clicks, your CPC was £1
£100 (spend) / 100 = £1 (CPC)
Why CPC Matters
CPC is important because it is linked to ROI. Regularly monitoring your CPC and taking measures to either keep it lower or better still reduce it, will help to see more clicks on your ads whilst spending less money. This will typically lower your cost per acquisition as you are getting better value from your ads.
How To Lower CPC
- Improve audience targeting
- Focus on improving CTR (click-through-rate)
- Monitor audience overlap
- Use bid caps
- Test ad copy and creative
- Test bidding strategy
Learn more about improving Facebook CPC here.
3. Frequency
What is Frequency?
The average number times each Facebook user has seen your ad. For example, if your Frequency is 4, it means that the average person has seen your ad 4 times.
The two main factors which affect frequency are:
- The size of your ad budget for that campaign
- The size of the audience you are targeting
How is Frequency Calculated?
Frequency is calculated by dividing impressions by reach. For example, your total number of impressions is 1,000 and reach is 500 your frequency is 2. In other words, each individual has seen your ad 2 times on average.
1,000 (imporessions) / 500 (reach) = 2 (frequency)
Why Facebook Ad Frequency Matters
An increasing or already high frequency can become an issue when your conversions begin to slow down, you see a steady increase in CPM/CPC, or your cost per acquisition begins to increase. Only then, should you begin to take measures to combat high frequency. When frequency increases, ad fatigue begins to set in and this can impact the results of your Facebook campaign.
How To Control Frequency
- Change your ad copy or creative
- Adjust or test new audiences
- Add audience exclusions to your targeting
- Exclude underperforming placements
- Run shorter campaigns
- Adjust your budget
4. ROAS (Return on ad spend)
What is ROAS?
ROAS measures the revenue generated compared to the money spent on Facebook campaign. When running Facebook ads ROAS is based on the total value of all conversions recorded by the Facebook pixel on your website and attributed to your Facebook ads. ROAS can be
How Is ROAS Calculated?
ROAS is calculated by dividing the website purchase conversion value by the total amount spent. For example, if your total website conversion value attributed to Facebook ads is £1,000 and the total amount spent on Facebook ads is £50, your return on ad spend is 2000%
£1,000 (revenue) / £50 (ad spend) = 2,000% / 20:1 (ROAS)
Why ROAS Matters?
Monitoring ROAS is important because it helps you to understand how profitable your Facebook ad campaigns are. ROAS is essential for quantifying your Facebook ad spend and will help you to learn what is and is not working when running Facebook ads, which can be vital when it comes to making decisions about advertising strategy.
How To Improve Facebook ROAS
- Improve existing audience targeting
- Test new audiences
- Test placements, platform and devices
- Pause underperforming ads
- Improve landing pages and website design
- Test bidding strategies
- Test new ad types, creative and copy
- Run retargeting campaigns
DO YOU WANT TO GROW YOUR BUSINESS?
Not quite sure where to start? We are experts in website design, branding and marketing. Contact us today to find out what we can do for you.
