FACEBOOK ADS: how you can influence the key performance indicators of an advertising campaign
Running an advertising campaign on Facebook Ads is one of the most popular and effective ways to increase your income. For this, you can use ADS Manager, a Facebook tool that allows you to create and manage ads.
However, it is important to choose the right bundle and set the right settings per your target audience and the campaign’s objectives. Elena Ena, a digital marketer, strategist and PPC specialist, told how to do this action at the SalesDoubler webinar.
Test period of the advertising campaign
Even an experienced marketing specialist may experience certain things when working with a project that is fundamentally new to him/her, since there will be not only a new audience but also a new offer and creative. Therefore, it is necessary to test the hypotheses and see how the advertising cabinet turns out at the initial stages to predict what will happen next.
To do this, you can use a test period at the start, during which the most effective combinations of targeting and messages in advertising are searched.
Here’s what you need to know about it:
- it is impossible to predict the result of performance campaigns. Therefore tests are necessary;
- an experienced specialist must first test hypotheses and then plan and approve strategies.
Elena also emphasizes that at the stage of the first launch of the Republic of Kazakhstan, no one can give any forecasts or guarantees.
What to do if you need a plan at the start
In parallel, a problem often arises when a client requires a clear media plan at the start.
In this case, there are two solutions:
- Convince the client that without a test it is impossible to predict what the auction will be, how many coverages, and what indicators.
- Prepare 3 versions of the media plan forecast. (pessimistic, realistic and optimistic).
Here’s what you can test from basic combinations:
The choice of testing approach depends on the resources of the project:
- Consistently (limited budgets, testing further).
- In parallel (larger budgets, testing faster).
How to set a budget
The budget size strongly depends on what project you are working on and in what region. To calculate it, you must follow several rules. Here are the main ones:
- start from the number of audiences that are planned to be tested;
- carefully consider the structure of the campaign;
- determine at least $5-10 per day per group.
It is also important to consider that there is no exact timeline for testing. As a rule, for the first launches, it takes up to a month for B2C niches and from 1 to 4 months for B2B niches, but in practice, it is individual for each project.
As soon as there are stable results, we can say that the test period is over and develop a strategy based on the data obtained. After testing, it is necessary:
- leave the most effective combinations of audiences + messages and work only with them;
- gradually scale-up: expand geo and/or budget;
- monitor the price of the lead and the budget expenditure on the advertising campaign;
- continue to test new hypotheses, but in a smaller amount (10% of the test budget).
It would be best if you were prepared that not all hypotheses will be in the KPI, and full campaigns may experience cost overruns (this is okay!).
What metrics are important to track depending on the type of project
The first option is the most common conversion option – a project with lead generation. From the name, it is clear that it needs to generate leads, and projects can be completely different:
- any service pages (registration or making an appointment, consultation, meeting);
- info business projects;
- services (for example, people get acquainted with the cleaning service on the landing page, leave an application there, and then the manager contacts them).
For such projects, the following indicators are important:
- Conversions (leads)
Another type of projects is E-commerce (classic online store). It uses the following metrics:
- Add to basket (for stores)
- Start of checkout (for stores)
- Conversion Value
How to influence the key performance indicators of an advertising campaign?
You can work with metrics: CPM, CTR, CPC, Frequency, CR, CPA, ROAS. All of them are interconnected; therefore, they directly influence each other.
Cost Per Mille (cost per 1,000 impressions)
What affects CRM?
- auction competition
- audience selection
- choice of geography
- choice of advertising target
- quality and relevance of advertising
CPM is tracked over time to understand “market prices”.
To reduce CPM, you can:
- expand and change the audience and geography;
- reduce the budget in the face of high competition;
- improve the quality of the ad;
- see a breakdown by placements and turn off expensive placements
Click Through Rate
The first thing that affects CTR is what ad creatives and what audience we show them to. Ads must be high quality, relevant and, of course, eye-catching to make people want to click on them.
For example, the headline and bright visual design, a clear call to action, so that in the end, all this in the complex brings the right amount of traffic are important.
If the CTR in the advertising account is 1%, then everything is within the normal range, and if it is 0.3–0.5%, then there are problems that you should think about and do more testing.
To raise this indicator, you need to know your audience well, as a result of which it will be possible to set up target sets in your account adequately.
This parameter is important but does not act as the main one.
Cost Per Click
CPC and CPM are closely related to each other: if we have a high cost per ad, then the cost per click will also be high, and vice versa.
Here the logic is banal: if the advertisement is not very relevant to the selected audience, there will likely be few clicks. As a result, the cost of one will also be high.
CPC can be reduced through work with the previous metrics: CPM and CTR.
It would be best if you also kept working on ads with audiences to find the perfect combination that will bring the perfect CTR and low CPC cost.
Frequency (advertising display frequency per user)
Frequency is one of the most important metrics because it helps to allocate the budget correctly.
It shows how many times one user saw the creative.
Accordingly, if the frequency of impressions is high (for example, 20), this may mean that the audience has already encountered this advertisement many times and is not interested in it since it does not interact with it.
Simply put, these ads are perceived as spam.
To reduce the frequency indicator, you need to track the relationship between the results and its growth and make adjustments in time: expand the audience/geography or replace the creative.
CR goes beyond a campaign on Facebook or Google, as it shows the ratio of the number of users who completed the target action on the landing page (purchased a product, registered, left contact information).
The main influence on CR is:
- point of entry;
- traffic quality;
- technical correctness of the landing page;
- UX design;
- landing page design
To increase CR, you need to change the offer and the entry point, increase the CTR, constantly test the audience (may find more loyal ones), track user behavior, and improve the usability of the landing page.
Cost Per Action (the cost of attracting one target action)
The CPA is affected by the following metrics:
- CPM (we show more expensive – we pay more for a client);
- CTR (the higher it is, the cheaper the client is to manage);
- CR (if the landing page converts well, then the cost of attracting a paying client is lower);
- Frequency (there must be a correct combination of the frequency of showing ads).
To reduce CPA, you should lower CPM, increase CTR, work on increasing CR and control the frequency of showing ads – Frequency.
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