Hacking Facebook – Structuring Your Ads for Profitable Campaigns!

A Beginner’s Guide to Measuring the Performance of Facebook Ads

8 mins read

If you’re new to the Facebook advertising scene, your head is probably spinning from all the digital marketing acronyms. Like, “for better ROI and CPA, increase your CPM and CTR.” Say what?!

This article is designed to help you understand exactly what all these concepts mean and how to use them to measure the performance of your campaigns. I’ll walk you through each Facebook ads metric so you can easily interpret your data.  By the end of this article, you’ll become a pro on how to track and identify your digital marketing wins.

The Metrics You’ll See in Your Facebook Ad Campaign, Defined

Here is a sample dashboard. This is where you’ll see most of the terms used to measure the performance of your Facebook Ads.

Let’s dive into what these mean.

The Most Important Performance Metrics to Measure the Delivery of Your Facebook Ads

These metrics tell you who is seeing your ad on the social media platform, and how often they are seeing it.

Impressions – The number of times your ad was seen by someone. Note that multiple impressions can come from the same person.

Reach – The number of unique users who saw your ad.

Frequency – The average number of times the average person saw your advertisement.

Cost Per 1,000 Impressions (CPM) – The number of impressions, divided by 1,000, divided by your campaign cost. For example, if you spent $100 and your ad had 100k impressions, your CPM would be $1.

The Most Important Performance Metrics to Measure the Response to Your Facebook Ads

These metrics show how often people are interacting with your ad on Facebook itself. Note that to measure the conversions of your ad, you will need to install a Facebook pixel.

Clicks – The number of times your ad was clicked by someone. Note that multiple clicks can come from the same person.

Actions – The number of times people have taken an action as the result of your ad, such as liking your page, viewing your video, or engaging with your post. You can also include conversions as an action by installing a Facebook pixel [link to FB pixel article].

Views – If you are running a video ad, this will show the number of times someone watched your video for 3 seconds or more.

People Taking Action – The number of unique users who have taken an action as a result of your ad.

Click-Through Rate (CTR) – The number of clicks on your ad divided by the number of impressions (clicks / impressions = CTR).

Cost Per Click (CPC) – The number of clicks on your ad divided by the amount spent on your campaign (clicks / campaign cost = CPC).

Cost Per Lead (CPA) – The number of conversions generated from your campaign, divided by the amount spent on your campaign (leads / campaign cost = CPL). Be sure to consider attribution when calculating this (don’t worry if you don’t know about attribution just yet – I wrote a whole article about it here).

That’s a LOT of numbers. Which ones matter?

Generally speaking, you should give metrics which measure the response to your ads more value than those which show delivery. Delivery stats, such as impressions and frequency, won’t really tell you the impact of your ad unless you compare those numbers with how many people were engaged. Metrics that measure how people are responding to those ads, such as cost per click, will help you understand the true return on investment of your campaign.

This means that metrics related to clicks, actions, and conversions are the most critical to understand and track. Just make sure those actions are things that can ultimately end in a lead or sale for you – a Facebook “like” doesn’t mean much unless it’s from a qualified prospect!

The Most Common Mistakes People Make When Measuring  the Performance of Facebook Ad Campaigns

If you’ve read up to this point, congratulations! You’re basically a Facebook ads measurement expert. You know what all those digital marketing terms mean. You know which ones matter most for your business. Now that we’re all caught up, I’m going to let you in on a few secrets from the field.

These are common mistakes people make when measuring performance. Avoiding these common pitfalls will help you achieve the best results from your campaign.

Mistake #1: Not giving a campaign enough time to optimize.

If you’re spending cash on advertising, you’ll probably want to see results right away to justify the investment. I get it. But if a person or program is optimizing your ads (like needls!), they need time to collect data and find out what does and doesn’t work.

That doesn’t mean you’ll get no action when your campaign starts, but it does mean that you need to allow a bit of time until your best results start rolling in. We need to test a few things to make sure your ads are at their best, and your audience will probably need to see an ad multiple times before converting.

Don’t get me wrong – you should keep an eye on your analytics early on and communicate any concerns you may have about the results. But pulling the plug after only a month or having unrealistic expectations could prevent you from benefiting from an awesome advertising platform.

It’s a good idea to look at your first 3 months of Facebook ads as a “testing” cost, then increase your budget after that initial period if you see results. This gives your ads time to optimize and gives your audience a fair window of time to respond to what you’re showing them.

Mistake #2: Leaving your ads alone because they’re “working.”

If you are running your own Facebook ads, you may be tempted to move on to other things once you find an ad set which works.

In the short term, that’s fine. But people often tire of seeing the same ads over and over (and over and over…). They may ignore them, or worse, unfollow any content from you in the future.

Continue to mix it up or at least test small changes to avoid this “banner blindness.” Regular A/B testing can also give you information about why certain ads are successful so you can replicate the results over time. Finding a software (like needls) that continues to optimize your ads even when they are “working” is critical for long-term growth.

Mistake #3: Getting caught up with vanity metrics.

“Vanity metric” is the term for a metric that looks good on paper, but may have no impact on your business. The most commonly used vanity metric on Facebook is “likes.” Most advertisers agree that if someone “likes” your page with no real interest in working with you or buying your product, their action doesn’t mean much.

While you shouldn’t prioritize vanity metrics, don’t write them off completely. People may use the number of “fans” you have online as an indicator of how trusted you are as a business. If you engage those who “like” your page correctly, it can certainly drive action. But no studies to date show a strong correlation between tons of Facebook likes and an increase in sales or even referrals. It’s best to focus on actions that place people in your sales funnel, such as an email list sign-up.

Mistake #4: Ignoring attribution.

Facebook ads are most frequently used for branding campaigns, rather than pure lead generation. Why? Just like TV and radio, people who see a Facebook ad for the first time are rarely ready to buy (how often do you scroll through social media with your credit card in hand?). It’s pretty typical for someone to happen upon a company through a Facebook ad, like what they see, then Google them later to complete their purchase.

This means that the number of sales which occur as a direct result of Facebook ads (aka your conversions) is not the same as the number of sales which were influenced by Facebook ads. You need to consider both.

To measure your ads’ performance with this in mind, you need to use something called attribution modelling. You can take a look at my how-to on attribution here.

The Bottom Line

Once you know the metrics which matter in online performance, it’s easy to understand the results of your Facebook ads.

You want your ads to bring in a good cost per click, a continuously engaged audience, and an increase in online conversions. You also want to make sure those results are improving over time, and that they work together with your other marketing efforts to make a real impact. By understanding all the metrics on your Facebook ads performance report, you’ll be able to see just how your campaigns are working for you.


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