Facebook Ads Data EXPLAINED: How to Analyze Performance Metrics to Lower Costs & Increase Sales

Facebook Ads Data EXPLAINED: How to Analyze Performance Metrics to Lower Costs & Increase Sales


If you’re running Facebook ads, you probably want to know
exactly how they’re doing. Well, fortunately, ads manager provides you with all the
necessary data to do this and to analyze them in that problem
is properly analyzing. All these metrics can get
pretty confusing. How do
you know what to look for, which ads are doing well and
which ones are struggling, and perhaps most importantly,
how to use these metrics. Do diagnose specific problems
all throughout your funnel. Well, that’s what I’ll answer for
you today. Hey, I’m Chabot, founder of game off conversions, the place where online entrepreneurs learn
how to convert more casual leads into profitable and paying customers. And today you’re going to discover how
to properly analyze Facebook ads data within ads manager so you can confidently
make data driven decisions and grow your business means. Let’s get started. [inaudible] okay. Before we start and get
into the nitty gritty details, I want to clarify something real
quick. Tracking is extremely important. In fact, it’s pretty much 50% of
the whole media buying experience. So what this means is that it’s not enough
to just run your ads and to write the copy and to find a great
creative that works. You also have to consistently measure
your results so that you can iterate on them, cut ads which aren’t performing well and
reinforce ads that are doing just fine. However, there’s a problem and the problem is that
reality is often warped even insight, Facebook’s own analytics tool. So you should know that
there’s a difference between
10 to 20% between the data that Facebook provides you with and
the raw data that’s really happening. So in practice, what ends up happening in a lot of cases
is that Facebook also attributes a sale do itself and do the ad efforts while
the source of the sale could have been something entirely different, like an email campaign or some
other type of marketing channel. So just keep this in mind and if you
really want to make sure that you’re getting accurate data, then use Facebook ads in conjunction
with Google analytics because this will give you the best of both worlds.
And actually I’m curious about you. Are you using some other type of
analytic software or tool to measure your performance? If you are, leave a comment
below and tell me which one is it. If you aren’t using now leave a comment
with no and tell me why you aren’t using it. I’m looking forward to it.
Alright, so that being said, let’s get into the meat of this video
making sense of all the various numbers that you can see within ads manager
and to make this easier for you. Think of all these metrics
as part of your funnel. We have top of the funnel metrics
we middle of funnel metrics, we have bottom of funnel metrics and
we also have super back and profit maximizing metrics and if you really want
to understand these metrics then make sure to group them by the role that
they play within your funnel. All right. First of all, we have top of funnel metrics and the
three most important ones that you should care about are Casper, video views, messenger signups and
relevance score. Now, cost per video views can be
either three seconds, 10 seconds, or even something called through play, which is a people watching a
significant portion of your video. Uh, and obviously the idea for this and for
messengers signups is to get as low as possible, but you shouldn’t really obsess over
these metrics because remember the top of funnel metrics, they’re not going to
ultimately influence your sales that much. However, something which is very important is
Ramin score and relevance score is a influenced by the copywriting quality, the quality of your creative, meaning the picture or video or or a
carousel ad or something that you use and how old these relate to the audiences
that you’ve chosen in audience insights. And you want to make sure
that the relevant score is
as high as possible because what that means is that your ad is
being run to people who are probably interested in this types of things.
And the higher the relevance score, the lower your cost per
click is going to be. And basically your ad costs are going
to be way less than if your relevance score is low and a good
benchmark so that you know this, a relevance score of one to
two is considered pretty bad. Something between three to five is
average and something above five, maybe an eight is really
good and that means that uh, your copy and your creative are obviously
working with your target audience. So you should definitely duplicate
this and try other angles as well, but leave the same essence in place.
So basically to boost these metrics, all you have to do is to experiment with
various types of copy and creative and just see what sticks. Okay? Uh, eventually you will find
the winning formula and you
will see that these metrics are going to, uh, you know, increase or
decrease favorably for your campaign. Next up we have middle of funnel metrics, which are all about bringing people
to your website or to your store. And one of the most important
metrics here is cost per click. But don’t just look at link clicks
because link clicks means people who’ve interacted with your ad, maybe
they’ve clicked on read more. Maybe these kicked on the picture. You should look at unique link clicks
because this is what counts at the end of the day. Another important metric is click
through rate and this is basically the conversion rate of your ad because this
is basically unique link clicks divided by impressions and the higher this
number obviously the better you are. However, um, the average click through rate
is between one to 2% so again, don’t obsess over this.
If you see that it’s slow, just know that if it’s under 1% there’s
definitely room to improve here. If it’s between one to
2% it’s pretty average. And this also depends on various
industries and if it’s higher than 2% Dan, you have a pretty good ad, which obviously is working and the copy
and the creative are connecting with your audience again. And what
about cost per clicks? Well, cusper quick is also very relative. It can range anywhere between
half a dollar to like $5. It depends on the niche on the
industry and the strength of your ad. By the way, in 2018 the average cost per click across
all industries was one point $72 but remember this is considering average
quality copy, Everage, quality, creative, average quality
audience selection, and taking into account all the different
industries which have various costs. However, there are two more metrics
that you should really care about here. The first one is cost per lead, which is your span divided by
your total number of new leads. And this can range from $3 to even
70 to $75 because in this case, there’s a huge difference between
industry to industry. Uh, for example, for education you can get a lead for
$5 but if you’re in legal or if you’re selling insurance, then be prepared
to shout over $50 for lead. Yeah, it’s just the
nature of the industry. And the final important metric
here is lead form conversion rates. And this is something more complex because
it also depends on your landing page or on your website. So where
you’re funneling traffic to. And if you’re experiencing
bad results with this metric, then you should definitely consider, uh, double checking the message matching
between the ads copy and the landing pages copy. So what that means in practice is that
your landing page has to be the natural continuation of your ad. So, uh, once people click on the ad, they
expect to see some type of headline, they expect to see some type of messaging
which is congruent with your ads. Okay? So keep this in mind and if you
see that your cost per leads are high, higher than your, uh, industry average, then you can definitely
diagnose a problem, meaning that your message
matching is off. Also, another common problem is that you
might have some irregularities with your audiences. So maybe the audience that you’ve selected
isn’t really the best fit for your copy and creative
combination. So in this case, just make sure to try out new audiences
with your ads and you might be able to see definite improvement here.
And regarding the landing pages. Make sure to use some type of heat
mapping software like Hotjar or SmartLook because this will allow you to really
see what people do once they land on your website, how they interact with
your elements, how they scroll, what they click on. And this will give you a much better
chance to understand what they want, to see, what they want to read and how to give
it to them so that your conversion rates increase. All right, next up we have bottom of funnel metrics
and these are the real money makers. So these metrics will show you how well
your ads are generating new customers for you. And the most important
metric here is cost per acquisition. And you should definitely focus on this
one if you’re in eCommerce because it’s the prime number that you should be after. And if your cost per acquisition is
around 85% of your average order value, then you’re in a good base.
If it’s higher than that, you’re probably going to lose money if
it’s slower than you’re probably, uh, that more profitable. Another important metric that ties in
very closely with this is revenue per visitor. And you obviously want to
maximize this, but in order to do this, you have to optimize your sales funnel. So these bottom of funnel metrics tie
in very closely to your entire sales funnel, how your landing page is going,
how your product pages are doing, how your checkout pages doing,
how your backend is doing, how well your abandoned
cart sequences are doing. So all these are basically if optimize
can raise your average order value, can raise your lifetime customer value, and you should definitely strive to
maximize these because then your cost per acquisition, even though it
may be a little bit higher,
uh, it can be justified. So what to do if your cost per
acquisition is too high? Well, the first question to ask is,
is your offer compelling enough? Because what ends up happening in a lot
of cases is that a company’s tried to sell or promote something
that people simply don’t want. So if your offer is not good
enough, if people don’t desire it, then your cost per acquisition will
inherently be high. So try to, uh, switch up your offers a little bit, offer another type of product or or or
course or some type of offering because people might be more
receptive towards it. Also, you should definitely diagnose
sales funnel related problems. So make sure that your upsells, cross sells profit maximizers downstairs, they’re all working in tandem and they’re
all working as intended so that you can squeeze every little bit of profit
from that customer so that your numbers look better. You can definitely
use heat maps for this as well. But discover again how
customers are interacting with
your site and what they do at various stages of the funnel so
that you can optimize places which are underperforming. And it’s
basically just a numbers games. You have various conversion
rates at different parts
of your funnel and you just have to, uh, you know,
try to raise these, uh, individually as best as you
can. That’s it pretty much. And finally we have retention
and monetization metrics. And this ties in very closely with the
bottom of funnel metrics because this will be all about maximizing that lifetime
customer value and that average order value. And what you should definitely look out
for here is a return on investment on the long run. So in the third stage, you look that immediate
return on investment and now
you should look at a return on investment over seven days and even
over 30 days because it might happen that somebody clicks on your ad, they
don’t buy anything for two weeks, and then they buy something and then they
buy something else and then you get to upsell them to something else again. And all of a sudden they’ve bought
three things from you three weeks after they’ve seen your ad. And this counts towards your
longterm return on investment. And why should you care about this? Well, because this allows you to do
more advanced stuff like, uh, maybe getting new customers
at an immediate loss, but you can afford this because you know
that eventually you’re going to convert them into repeat buyers and they’re
going to make up for that initial loss. However, please be careful with this
because you have to have really, really solid metrics and a very
well oiled sales machine. Uh, basically a revenue generating engine,
uh, that’s fine tuned for conversions. In order to pull this off, you have to know your conversion numbers
very reliably at various stages of your funnel to do this because otherwise you
might very easily end up losing money with your Facebook ads. However, if you really know that you are a funnel
is working fine and it’s fine tuned for all these additional conversions, then
you should definitely experiment with uh, these profit maximizing ads. Because even though they might be
unprofitable in the extreme short term, they will become profitable in the long
term. Basically, just ask yourself, can I take a short term loss
to acquire longterm customers? If you can feel free to
experiment with this. If not, then make sure just stay with the basics
and you’ll be just fine. So great. Now we’ve covered all the performance
metrics that you should really care about. Does this mean that you should track all
of these closely and keep an eye on all of them? Fortunately, the answer is no, unless you have a dedicated analyst or
you want to act like the analyst within your company because the truth is that
you should concentrate on performance metrics for your specific
campaign objective. So if your objective is to
gather new lead signups, then you shouldn’t really look at a cost
per acquisition and all these longterm maximizing things because what you really
care about at the moment is cost per lead. And the same thing applies. If you want to make new sales, then what you should really care
about is cost per acquisition, not cost per video views. It’s really good to know the cost per
video views as well because you can optimize it and fine tune it. But um, ultimately what you care about is cost
per acquisition and this will probably give you certain insights that will allow
you to make a fine adjustments which are more relevant to your case. Okay. Just keep this in mind if
you have the capacity for it, by all means monitor everything, but just make sure that the
objective of the campaign, if you’re gathering leads, if you’re just going after video viewers
so that you can build a retargeting audience. If you’re generating sales, that the primary performance metrics that
you should care about are closely tied to those various objectives
and that’s pretty much it. If you enjoy this video, then by all means feel free to
like it and in case you loved it, then I invite you to subscribe
to my channel because I’ll
be posting videos such as this on a regular basis. Also, if you want to get exclusive
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that I only share with my subscribers that head [email protected] and
sign up for my ever-growing conversion optimization toolbox because it’s free
and you’re going to enjoy it and now it’s your turn. Let me know your
experiences with these metrics. Which ones are you tracking, which ones
you aren’t and your results with them. Leave a comment below and
just feel free to let me know. So thank you for watching and
see you in the next one. Peace.

6 COMMENTS

    MOST IMPORTANT METRICS AT EVERY STAGE OF YOUR FUNNEL:

    Top-of-funnel metrics:
    -cost per video view (3 or 10 sec)
    -cost per messenger sign-up
    -relevance score (the higher, the better)

    Middle-of-funnel metrics:
    -cost per click (most important – spend/unique link clicks)
    -click through rate (unique link clicks/impressions)
    -cost per lead (for lead magnets – spend/leads)
    -lead form conversion rate (leads/lead form visitors)

    Bottom-of-funnel metrics:
    -cost per acquisition (spend/customers created)
    -revenue per visitor (revenue/unique link clicks)
    -return on investment (revenue-spend/spend)
    -ales funnel performance (step completers/step visitors)

    Retention & monetization metrics – long-term growth:
    -return on investment (7 days, 30 days) (revenue-spend/spend)
    -lead & customer value over time (average revenue by first action)
    -average order value

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