The biggest pitfall local businesses face when running digital ads on social media or search comes when they either misunderstand or fail to analyze the data their ad campaigns provide. This data provides insight into what works for your company when advertising and what doesn’t, and also reveals areas of improvement that could make your marketing dollars go even further. Let’s take a look into key variables to keep your eye on and how you can interpret them as performance.

Analyzing your Facebook Ads performance is critical for determining areas of success and finding room for improvement.

As always, you will want to determine the return you are getting on your invested budget. This can be easily identified by two key variables. Cost per conversion and frequency are the main ingredients for a successful campaign that continues to be successful.

Frequency refers to the number of times the average person sees your ad. This is important because it represents when your ad had been seen by virtually everyone in your audience, making it safe to assume that they will not click on the ad if they haven’t already.

A safe number to keep your frequency at would usually be between 1.15 and 1.60. If you are running a retargeting campaign, I would recommend keeping that number a little closer between 1.40 and 1.80. It takes on average between 5 and 7 exposures on a digital platform before a consumer takes action on an ad, so you want to make sure that your target niche sees your ad enough, but not too much.

Cost per conversion reflects the cost of customer acquisition. Depending on what your conversion objective is, how much does it cost you to acquire a customer from that campaign? This variable is all relative to what you can afford, but if the cost is right around your budget limit, chances are there is some room for improvement.

Let’s take a deeper dive into this variable so we can better understand how it works. When you set up your Facebook Pixel, there is an option to track certain actions and metrics that are taken on your website. This can be “add to cart” actions, form submissions, purchases, and more. Depending on what your conversion goal is, this value reflects the average cost to complete that goal each time.

If your cost per conversion is higher than you are willing or able to spend, then you need to look into making some changes and using the next few metrics to determine what changes to make. Keep in mind, this will always vary based on your budget size, but if you have a mid-size to larger budget and your CPC is still barely below your desired customer acquisition cost, there is definitely room for improvement in other areas.

So what if your cost per conversion is undesirable? Or what if your budget isn’t large enough to run conversion ads, so you are running traffic and retargeting campaigns instead? Here’s a few other important variables to keep your eye on.

Click-through-rate (CTR) illustrates how often viewers click on your ad when they see it. For example, if you are a fitness trainer and your CTR is less than 1%, that means less than 1% of the time when someone sees your ad, they actually click the call to action. In this case, that would also be an underperforming campaign, since the average CTR for Facebook Ads in the fitness industry is 1.01%. Now while that obviously isn’t a major difference, you may want to consider tweaking your ad’s headline or shorten your primary text (copy) in order to encourage more clicks.

Monitoring your CTR can be a great way to determine how relevant your niche finds your ads. It’s also a great way to compare yourself to the rest of the general industry. Generally, you should shoot for 2% or 3%, but that is just my own personal preference.

Sometimes, the reason your Facebook Ads aren’t performing aren’t always because of the ads themselves. Your landing page (also known as a sales page) has to be formatted and written in a way that persuades the viewer to go through with taking the desired action. If your ads are producing a 2.5% CTR, but no one is submitting a form, you need to really consider making some changes to your landing page. Add some more potent, targeted copy, outline stronger benefits, make it clear what desired action is expected, and provide more social proof (testimonials and reviews).

Speaking of your landing page, you also really need to compare your link clicks to your landing page views. If less than 50% of your link clicks are viewing your landing page, you most likely have some site speed issues to fix. If your landing page doesn’t load in less than 2.5 seconds, your chances of the viewer sticking around to take action decrease with each tenth of a second. You can use Google’s Page Speed Tool or Google Chrome’s Lighthouse Tool to analyze your website’s speed and gain improvement insights.

Our Facebook Ads for this particular week produced a 2.72% CTR at a cost of $1.45 per landing page view. I was concerned with the drop off rate, so made a couple of coding changes to our landing pages.

Take the Facebook Ads I run for DM Digital for example. On average, 54% of link clicks stuck around to view the landing page. I was concerned when I saw this number, so I made a couple of changes to the headline and deleted a few extra Javascript codes that were unnecessary for the web page to function. I also made sure that the images were correctly formatted and sized, so they did not take any extra effort from the server to load them.

You can view our article on how to improve your website’s SEO and rank higher in search results for more tips on improving your website experience. You can also check out Moz’s Page Speed Best Practices for more in-depth knowledge.

Another reason for link clicks not matching landing page views could be explained by misclicks, but less than 50% of link clicks viewing the page is usually a significant indicator that something is wrong with your website’s mobile-friendliness or site speed. Another reason that this gap exists is because as soon as the webpage loads, the first thing the viewer sees is your headline. If your headline seems irrelevant to the ad or does not provide a seamless transition to a landing page, users will exit your website even faster than they entered.

Engagement rates can provide more in-depth insight into why your ads aren’t being clicked.

If you are not seeing a whole lot of link clicks, there is another way you can identify what might be the problem. Engagement rates can help you determine what about your ad is not succeeding in getting the viewer to click. Here’s a quick tip: most of the time it’s the headline.

If you are running a video ad, you can check the video views to help illustrate how engaged your audience is with the video. Check how many users make it to 3 seconds of your video, compared to 10 seconds, compared to 50%. If you see a major drop off after 3 seconds, chances are your video is not engaging enough to keep the viewer watching. Your video ads should never start with an introduction, and should always start with a hook. Ask a question that is specific to your niche or relate to them through a benefit of your product or service you know they have been searching for all over the internet.

If people aren’t engaging with your ad by viewing the image, clicking anywhere on the ad, viewing your page, or reacting to the ad, chances are it is not catching their attention and is very easy to scroll past. If this is the case, you will need to come up with a more eye-catching image. Videos usually work best for Facebook Ads, but those have to use a thumbnail image that stands out as well.

Another good determinant of ad performance is the quality ranking metric. This statistic allows you to see an educated guess of how engaging your ad is compared to other advertisers in your industry. While this metric is not a huge deal quite yet, if your cost per result or cost per conversions are undesirable, then you can use this metric as another way to determine what actions to take.

Most of the time, an ad’s performance is directly correlated to the creative content. Make sure your headlines are enticing, visuals stand out, and copy is short and sweet. Sometimes, depending on your niche, the length of your copy doesn’t matter as much, but that’s why it’s important to test different creative before launching a full scale campaign and wasting money.

If you feel confident that your creative is good, or if you have a decent amount of video views, you can probably come to the conclusion that your targeting is the issue. Targeting is important for Facebook Ads because it determines automatic bidding strategies and affects the amount of time Facebook’s algorithm has to take before it optimizes your campaign.

The size of your target audience should always reflect the size of your budget. This varies greatly between industries, but typically a good ratio to follow is about 3,000 people for every $1 spent/day. Granted, this also varies with the campaign objective, but that standard is a good comparison for the most common objectives (awareness, reach, website traffic, and engagement).

Google Analytics offers very in-depth insights into who your website visitors are.

If the majority of your website traffic comes from Facebook Campaigns, you can use Google Analytics to break down your audience in more specific segments than Facebook Ad Manager offers. You can segment your audience by different interests to make sure that your Facebook targeting is accurate and that you don’t need to make any changes to it. Google’s audience interest insights also allow you to track which segments are most interested in your website’s content, which take the most action (conversions), and what kind of products or services they are actively looking for.

Google’s in-market segment breaks your website traffic into categories for specific products or services they are actively searching for on Google. For example, if your highest converting in-market segment is labeled “Home & Garden Products,” that means people who are purchasing your product or service are actively looking for home and garden products, for whatever reason that may be. Finding that reason could be the ultimate link in connecting your product or service to your ideal customer, or it could just be a major coincidence. You could use Affinity Interests to help determine whether that’s the case or not.

Affinity interests are broader interests that Google is able to identify based on the user’s search history, website visits, and purchase habits. For example, “Foodies” is an Affinity Category for people who are constantly trying new food or searching for different types of places to eat. This would be a great opportunity for higher-end restaurants to learn more about that group’s interests and demographics, so they can more accurately target them on other platforms such as Facebook.

Being able to understand and implement the understanding of your Facebook Ads data will determine whether you continue to run underperforming campaigns or if you are able to improve your ROI and gain more customers. Sometimes, trying to decipher and implement the research and knowledge one can gain for this data can be too time consuming for a busy small business owner to manage. It may be worth finding an ads expert to handle your advertising needs so you can efficiently improve your campaign performance without wasting anymore budget than necessary.

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