When it comes to running Facebook ads, one big mistake we make is not using or Underutilizing the metrics.
Metrics are not there for fun, they are meant to show us what’s working and how it’s working. They are data analyses by the algorithm that explains why your ad is performing the way it is. And they can be adjusted for maximum performance if you understand how they function.
They are meant to help you calculate and predict how well your ad will perform.
That you don’t get any sales on the first day doesn’t mean your ad isn’t performing, but only your metrics can definitely tell you that.
Some important metrics to keep in mind are
1) ROAS – This is your return on ad spend.
This is not available on Facebook metrics Column. It’s a calculation you will have to do yourself to determine how profitable your ad is. You calculate the ROAS by (Net Sales ÷ Net Profit.)
Your return on ad spend will tell you if you are making a profit or a loss.
For example, a return on ad spending of below one shows that you’re making a loss while a return on ad spending above one shows you are making a profit.
2) CPC – Cost per Link Click.
This tells you how much is it costing people to land on your webpage.
This is very important because if your ad is performing well your CPC is likely going to be lower. The higher CPC simply means your ad creative could do better.
3) Unique CTR
The unique click-through rate tells you how many people are actually going to and landing on your websites compared to the total number of people who see or engage with your ads.
The higher your unique click-through rates the better. A unique click-through rate of less than one shows that your ad is completely under-performing.
4) CPA/CPP – Cost Per Action or Cost Per Purchase.
The cost per action or cost per purchase is another important metric that tells how well your ads are performing.
It also tells a lot about your landing page and your products.
A very good product with a very good landing page and good offers tends to convert at a lower CPP than a poorer Product with a poor offer on a poor landing page.
When you notice a high cost of purchase always look into your web copy and see how you can improve it.
This is a very important metric if you’re running an e-commerce business. You must understand this works and how to keep it as low as possible
5) CPM. The cost per 1000 Impressions is a very important metric when running Facebook ads.
An ad that Facebook recognizes as high-quality and blends with the feed tends to spend less on impressions compared to one that is deemed a low-quality ad or looks like an advert rather than an organic post on the news feed.
An ad with a lower CPM is more likely to get more engagement than one with a higher CPM.
6) Engagement. Engagement includes likes, comments, and shares.
An app that will perform well is likely going to have a lot of Engagement. The more engagement your hard tends to attract the cheaper it will become over time.
Also because it’s attracting a lot of engagement, it creates social proof that what you’re selling must be liked by many people. This of course will boost sales.
In summary, the more attention you Pay to metrics, the better the results you have.
To learn more about running a profitable E-commerce business in Nigeria with Facebook Ads, Check this out.