Are you looking to improve your Facebook Ads reporting to get a better return on ad spend?
Today we’re going to look at how you can build effective reports FAST so that you can optimize your marketing budget and increase the profitability of your ad campaigns by focusing only on actionable metrics.
Contrary to what you may have heard out there, Facebook advertising is far from dead.
It’s true that organic reach on the platform has been steadily declining for years - in fact, by the end of 2020, the average organic reach for a page was down to just 5.2% of a page’s audience.
But while organic campaigns may have a tougher time, paid promotion on the platform proves to be an effective way to advertise your business in 2022.
Believe it or not, Facebook is still the most popular social media platform in the world with 2.893 billion monthly active users.
On top of that, in 2021, Facebook ads were more cost-effective than Google Search, LinkedIn, Instagram, and Pinterest ads with an average cost per click of $1.35 - making it affordable for established brands and small businesses alike.
While this is good news for those with smaller marketing budgets, it also means that the market becomes very saturated.
With 160 million businesses actively using Facebook every month and 64% of social media marketers planning to increase their budgets in 2022, competition is high.
Nowadays, running ads on Facebook without the proper planning and execution will get you nowhere.
Our goal today is to show you how you can use conscious reporting to optimize your paid Facebook marketing campaigns for a greater return on ad spend.
So let’s get started!
Table of Contents
- 1) Return on ad Spend (ROAS)
- 2) Cost Per Click (CPC)
- 3) Click-Through Rate (CTR)
- 4) Conversion Rate
- 5) Cost Per Conversion (CPA)
- 6) Cost per 1000 Impressions (CPM)
- 7) Amount Spent
- 8) Engagement Rate
- 9) Ad Frequency
The Benefits of Facebook Advertising
First, let’s take a quick look at why you would consider advertising on Facebook in the first place.
We’ve already looked at the stats showing Facebook’s vast amount of monthly users, but there are other benefits as to why the platform should be considered as part of a digital marketing strategy.
1) Level of Accessibility
Anyone can advertise on Facebook - from huge corporations to mom-and-pop stores. All you need is a Facebook business page and a payment card.
2) Make Data-Driven Decisions
Facebook Ads Manager provides you with a wealth of data to help you optimize campaigns. Even if a campaign is unsuccessful, the data gathered can be used to influence future ones.
What you spend is up to you. Even businesses with small marketing budgets can advertise effectively on Facebook.
4) Total Campaign Control
Unlike traditional advertising methods, advertising on Facebook lets you easily edit and optimize ads in the middle of a campaign.
5) Extended Reach
In addition to the platform’s 2.8 billion monthly global active users, advertising on Facebook allows you to serve ads on Instagram and external websites and apps via the wider Display Network.
6) Split Testing
A/B testing makes it easy to experiment with various parameters in your ad to help you optimize campaigns.
These benefits make it easy to see why 160 million businesses chose to use Facebook advertising to help them reach their business goals in 2021.
Before we look at how to build your report, let’s first take a look at the capabilities of advertising on Facebook to gain a better understanding of how you can make the most of the platform.
Boosted Facebook Posts
As most of you will probably know already, boosting a post on Facebook is not the same thing as running a targeted ad campaign. Its main function is for getting your content to be seen on more of your existing followers’ news feeds than typical organic reach allows.
Boosting a post allows you to control the following paraments in a limited capacity:
- Objective (website traffic, brand awareness, engagement, etc)
- And basic ad placement
The benefits of creating an ad vs. boosting a post are the level of customization of targeting, placement, your content, and the ability to split test.
Facebook makes the process for boosting a post a lot easier than setting up campaigns in Ads Manager, so it can be tempting for those with less experience to just boost. But they’d be missing out on the advanced features and richer data acquired from using the Ads Manager tool.
Boosting a post can still be useful for increasing an organic post’s reach and engagement, so depending on your goal it may still be a viable option. However, setting up campaigns inside Ad Manager offers a lot of benefits over boosting.
Let’s take a look at those now.
Facebook Ads Manager
You’ll find the Facebook Ads Manager tool inside the Business Suite section of a Facebook page - this is where you can build and manage campaigns.
It’s free and once you’ve familiarized yourself with the interface and campaign hierarchy you’ll find that it’s fairly easy to use.
When setting up an ad, you can:
- Choose campaign objective options
- Split test different ad content
- Control over ad placement and scheduling
- Define conversion events
- Incorporate Facebook Pixel code for tracking and remarketing
- Select type of ad (carousel, collections, etc.)
- Add an Instant Experience
- And more…
Taking the time to learn Facebook Ads Manager and understand these additional features will help you build higher converting, more profitable campaigns.
Types of Facebook Ads
Advertisers can create ads in varying formats to present products and services to audiences in the best way possible to maximize the likelihood of conversion. Current options include:
- Image or video: single image or video
- Carousel: multiple images or videos in a single ad
- Collections: browse a line of products
- Stories: full-screen ads shown between Stories on Facebook and Instagram
Facebook also offers its Instant Experience feature to further enhance ads with an in-app mobile-optimized landing page, capable of loading up to 15x faster than a mobile site.
Considering that around 50% of users will leave a site due to a slow-loading plage, this feature has the potential to increase the likelihood of conversion for your Facebook ads to make them more lucrative.
Facebook Ad Placements
Facebook Ads offers both automatic and manual placement options across Facebook, Instagram, Messenger, and the wider Audience Network of external websites and apps.
Automatic placements aim to help advertisers maximize their budget by optimizing ads to be seen by the most people, whereas manual allows complete control over where ads appear.
Placement options for Facebook Ads include:
- Facebook and Instagram Feeds
- Stories and Reels
- Facebook and Instagram in-stream videos
- Facebook search results
- Messages (send offers to people connected with your business)
- In-article (engage with people reading content from publishers)
- External apps and sites
Using the automatic placement option is generally a good place to start for most campaigns. However, learning how and when to utilize manual placements can assist in further optimizing a campaign and its budget.
For example, if you know that particular placements aren’t effective for your campaigns, or when you want to create specific content for specific placements (like vertical video ads for an Instagram Stories campaign).
Facebook ads manager provides you with this information so you can make data-driven decisions that will help achieve a larger ROAS.
Targeting Your Facebook Ads
One of the main strengths of Facebook Ads is its targeting capabilities, allowing advertisers to create campaigns for audiences at every stage of their marketing funnel.
Campaigns can be optimized based on their objectives, such as;
- Brand awareness
- Website visits
- And more…
Facebook will attempt to serve the ad to users who are most likely to perform the desired action.
In terms of demographics, at the basic level, advertisers can target key user characteristics like:
- Interests (based on a user’s liked pages and behavior)
In addition to these, you can create a custom audience for more detailed targeting.
A lookalike audience can be created based on data collected by your Facebook Pixel audience or by uploading a mailing list. Facebook then searches for profiles linked to those emails then targets users with similar characteristics.
Ads can also target users who have interacted with your content in a specific way, e.g. people who have engaged with your posts, watched at least 30 seconds of your videos, etc.
Remarketing is also made easy thanks to Facebook Pixel. Businesses can add a small piece of code to their website in order to track visitors from Facebook for retargeting campaigns.
As you can see, there are a lot of opportunities for creating ad campaigns that are affordable, flexible, and customizable.
But in order to get the most out of Facebook advertising and optimize your campaigns, you’ll need to keep a close eye on your data. And that’s why effective reporting is important.
Facebook Ads Reporting
As marketers, we hope that every campaign will be profitable. But even with a strategy in place, things don’t necessarily pan out the way we expected them to.
Trying to expect the unexpected can be next to impossible. Sometimes making decisions to pre-emptively avoid a certain outcome can hinder more than help.
Of course, we’re not saying you shouldn’t attempt to calculate risks (because you should), but the best path to success is following the data to make informed decisions based on results. This is the most effective way to achieve a greater return on ad spend.
Don’t just set ads to run and hope for the best. Presumably, you’re not a Facebook charity. So, don’t just give them money and hope for results. Take control of your marketing by reporting on the metrics that directly contribute to the success of a campaign.
There are multiple ways you can create an effective Facebook Ads report.
The first is using Facebook’s native Ads Reporting tool. With it, you can create, customize, export, schedule, and share reports about the performance of your ads on Facebook. Reports can be sent via sharable link (viewable for 30 days) or as a .csv, .xlsx or .png file.
One of the biggest problems with reporting straight from Ads Manager is that the reports themselves are relatively inaccessible due to:
- Time-sensitive links
- Annoying attachments
Clients are busy, so sending them an email that requires additional steps to view important information isn’t convenient.
Agencies would be better off with a tool like Metrics Watch that allows clients to view reports directly in the body of the email itself.Build Automated Digital Marketing Reports Today!
The key to effective reporting for more profitable campaigns is understanding your reporting goals. So let’s take a look at how you can do this.
Goals of Facebook Ads Reporting
Facebook Ads presents you with A LOT of data from your ad campaigns. And while this is a great improvement over traditional advertising methods like billboard campaigns (in which you get next to no data), it also has its drawbacks.
Many marketers struggle to understand which metrics they should be tracking as key performance indicators (KPIs) for their Facebook Ads reports.
The first thing to consider is the purpose of the report:
- Who is going to receive the report?
- What data do they need?
- How often do they need to be updated?
For example, a marketing team may require weekly reports with one set of KPIs to optimize a campaign for the highest number of conversions at the lowest cost-per-click. Whereas the company director may only need to see a quarterly report to determine the financial viability of paid advertising on Facebook.
So while a marketer may care about metrics like the frequency rate of an ad, a director may not. Taking the time to identify which KPIs should be included in your various reports is the key to successful reporting.
In terms of Facebook advertising, reports can be used to:
- Compare results of paid campaigns vs. organic content
- Optimize ads to make the marketing budget stretch farther
- Measure the profitability of Facebook as a marketing channel
- Create holistic marketing reports for other departments
While goals can vary between reports, one KPI that both marketers and most higher-ups will be interested in is the return on ad spend (ROAS).
ROAS is the revenue generated per $1 spent, which is displayed as a ratio or percentage.
Understanding your ROAS and knowing what a good one is for your client’s business can make this a powerful metric for evaluating the effectiveness of a campaign.
What is a Good ROAS?
A “good” ROAS is generally considered to be between 2:1 and 4:1 (or 200-400%). However, this will vary between organizations and is determined by factors like industry, profit margins, and cost per click.
While a ROAS of 3:1 may equal success for one business, it may not mean profit to another. It’s important to assess each client’s individual situation to determine which ROAS to use as a benchmark for success.
To view a campaign’s return on ad spend inside Ads Manager, you’ll need to make sure you’ve first installed your Facebook Pixel code on your website.
It’s worth noting that ROAS doesn’t factor in costs outside of the money spent on ads within Facebook, such as the hourly rate of pay for the staff who carried out market research, graphic designs who made the ad creative, and advertisers building campaigns.
Understanding these factors will help you to more accurately calculate your ROAS.
Some ways to optimize your ads for a better ROAS are by:
- Identifying lower cost-per-click opportunities
- Tracking cost per conversion
- Identify highest converting ads and campaigns
Creating concise and comprehensive reports can help you to achieve a better return on ad spend.
Now let’s go over the top KPIs you’ll want to consider tracking in your Facebook Ads report to ensure that your campaigns are optimized for success.
9 KPIs for Better Facebook Ads Reporting in 2022
1) Return on ad Spend (ROAS)
No surprises here. When trying to increase your ROAS, you’ll want to make sure that you’re tracking the metric in your report.
By tracking your ROAS as a KPI, you can easily compare its performance over time and determine whether changes to an ad have been successful.
2) Cost Per Click (CPC)
Cost per click shows how much Facebook is charging you each time a user clicks on your ad.
It’s one of the most important metrics to track since it directly affects how long the marketing budget will last.
Performing split tests on Facebook Ads is an excellent way to optimize a campaign for a lower CPC. This can be done automatically through the A/B test feature to test different creative options, or manually by duplicating an ad or ad set and changing the targeting and placement settings.
3) Click-Through Rate (CTR)
The click-through rate of an ad shows the percentage of clicks an ad receives in relation to its impressions.
A high click-through rate is a good sign, as it indicates that your target audience considers your ad to be relevant.
If your CTR is high but your conversion rate is low, this could suggest an issue with your landing page - your ad is compelling enough to entice clicks, but users aren’t completing the desired action on your website.
On the other hand, if your CTR is low then it could indicate that there is an issue with an ad’s copy or creative, or perhaps the wrong audience is being targeted.
The benchmark of a “good’ CTR of Facebook Ads varies between industries, but the average was around 1% across all industries in 2021.
If your campaigns are producing anything less than that, you’ll want to check your conversion rates and cost per conversion to make sure that they’re actually profitable. Otherwise, it may be time to pause the ad spending for now and revise your strategy.
4) Conversion Rate
One of the most important metrics to track in your Facebook Ads reports is conversion rate. This shows the percentage of people who answered the call to action after seeing an ad.
In order for a campaign to be a success, it needs to be generating sales or leads.
The conversion rate should always be measured alongside the cost per conversion. Having a high conversion rate on a campaign is nice, but not if you are paying more per conversion than the product costs to produce.
If conversion rates are low, then your cost per conversion will go up. In this case, you may want to consider reviewing and reworking ad copy, ad creative, and landing pages to increase conversions.
5) Cost Per Conversion (CPA)
The cost per conversion calculates what it physically costs you to acquire each new customer.
Basically, this metric reveals whether or not the campaign is profitable. If it costs more to acquire a customer than a product costs to make, then you’re running at a loss.
Like cost per click, it’s important to track your CPA because of its direct impact on the advertising budget.
While we would recommend tracking the CPA for conversion goal campaigns, it’s worth noting that this metric is not so useful for campaigns at the top of a funnel with brand awareness or engagement goals.
6) Cost per 1000 Impressions (CPM)
Cost per thousand impressions is just how it sounds - it shows how much Facebook is charging you for every 1000 times your ad is shown.
It’s based on supply and demand and Facebook will raise the price accordingly.
To lower your CPM, you could try experimenting with targeting similar audiences and interests, or by scheduling your ads to run at different times of the day (or even days of the week).
By tracking your CPM, you’ll be able to clearly see the effects of any changes you made in your ad targeting over time.
7) Amount Spent
When setting up your ad campaigns, you’ll be asked to set either a daily budget or a lifetime budget. You’ll then be able to track the amount of money spent on advertising throughout the campaign.
Some people forget to include this metric in their reports because it seems obvious, but you want to keep track of how much Facebook is going to bill you.
8) Engagement Rate
This metric measures the rate at which users interact with an ad by commenting, liking, sharing, saving, viewing a video, or clicking a link.
But aren’t likes and comments just vanity metrics?
Generally speaking, yes… because they don’t pay the bills. But an ad’s engagement rate can be useful for gauging the overall relevancy of your ad.
If the rate is high and comments are positive, then it means you’re targeting the right audience.
Just be aware that targeting the wrong audience or mistakes in ad copy or creative could also result in a high engagement rate… but for all the wrong reasons. So remember to check that your ads are receiving the right kind of engagement.
9) Ad Frequency
This metric is Facebook’s estimate of the average number of times your ad has been shown to people.
It’s important to keep the frequency of your ads in mind for a couple of reasons.
The first is how it can affect the effectiveness of the advertising budget. Low click-through rates combined with high frequency can indicate to Facebook that your ads are not relevant, which can lead to you being charged a higher cost-per-click.
If the same people keep seeing your ad but are not performing any action then it may be time to switch up its copy or creative so that your audience doesn’t develop “banner blindness”.
Some users may even give Facebook feedback on your ad if they feel that it’s not relevant or too spammy, which could negatively affect your ad’s relevancy score. When an ad’s frequency reaches 4 or 5, it’s usually a good time to shake things up.
Building Better Facebook Ads Report
Now that we’ve explored which KPIs you should include in your report, it’s time to build it.
There are generally 2 ways you can do that:
- Or automated reporting
We don’t like to recommend building your reports manually because they’re time-consuming, often unreliable due to human error, and while creating them yourself is technically free, your time is valuable - so why waste it on monotonous tasks when you could be trying to acquire new clients or nurturing the ones you already have.
The alternative to this is to use an automated reporting service.
These allow clients to view their reports by either logging into a 3rd-party dashboard or by sending it to their email as a PDF attachment.
But the main problem with these is getting clients to actually read the reports.
Logging into a portal or downloading reports to view them on a regular basis adds extra work to people's already busy schedules.
Instead, wouldn’t it be easier if they could just view them directly in the body of their email?
That’s why we built Metrics Watch:
Metrics Watch is a truly frictionless reporting service.
Just the data your clients need, delivered in a way that naturally fits in with their workflow.
You can build professional marketing reports FAST with the easy-to-use drag & drop builder. No tech skills or coding experience needed!
Metrics Watch connects with all your favorite marketing channels for comprehensive reporting. Pull data from:
- Google Analytics
- & more
All reports are fully customizable with White Label features to incorporate your agency’s branding.
Try Metrics Watch FREE today for 14 days and see for yourself how automated, frictionless reporting can benefit your agency.
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And that’s it for today! We hope you now have a better understanding of the benefits of advertising on Facebook and how you can use reporting to increase your ROAS for future ad campaigns.
If you enjoyed this post, be sure to check out these other articles:
They have everything you need to improve your Facebook Ads reporting strategy and produce a larger return on ad spend for your digital marketing campaigns.