The Most Important Facebook Ads Metrics
CPA, CPC, AOV, CTR, ROAS, CPM, Spend, Revenue, Purchases, & Clicks: Vanity vs. Reality Metrics for business owners.
There are a lot of metrics that you can pull into your columns on Facebook ads. And there is a ton of value to be extracted from all of this knowledge. There is also an extremely varied opinion on what metrics are important, and what metrics make you feel good.
When it comes to running a business, Facebook can be a vital part of your e-commerce universe. There are some very specific metrics to keep an eye on, and a bunch of metrics that can really get in the way of actionable insight.
Here are 10 metrics that everybody knows has a specific type of value… The question is, which ones have actual business value, and which ones are just for vanity?
(Spoiler Alert)
CPA: Cost per Acquisition - 100% Reality Business Metric of Value!
* how much did it cost to make a sale today on Facebook. Without knowing this number it is extremely difficult to understand the efficacy of any advertising.
CPC: Cost Per Click - Vanity Metric!
* While knowing how much Click cost is interesting, the price of a click has very little impact on the value of that click, and is extremely dependent on the quality of the ad, the audience that you’re sending that ad to, and Budget x Estimated Action Rate… also, you have no control over this, other than trying to force this number down and drive a higher volume of worse traffic to your site, which will ruin Email, SEO, and Conversion Rate
AOV: Average Order Value - 100% Reality Business Metric of Value!
* Knowing how much, on average, every order is worth to you… Is fundamental to understanding the value of every sale. Profit comes directly on the back of your AOV being greater than your CPA. Also, AOV while more difficult to have direct control over with your ads, is absolutely Actionable with the post-Click journey.
ROAS: Return on Ad Spend - Vanity Metric!
* this is a very controversial topic, however Facebook Robles is an extraordinarily out of context data points. Unless your entire job is to make Facebook look good, regardless of the overall business impact, your Facebook group has is a metric it doesn’t really mean anything for your success. How much of your revenue comes from Facebook? How variant is the AOV? Does Facebook track post transaction upsells? How many channels took credit for that sale? Etc etc etc
ROAS is myopic vanity
CPM: Cost per Mille (1k Impressions) - Vanity Metric!
* CPM is variant from add to add, day today, audience to audience, dollar to a dollar. While it is something that you can point to with correlation to business results, it is not an actual Actionable bit of conversational insight. The biggest fallacy here is people saying, well if my CPM was lower, this would work. While that’s true, he relies on isolating one Variable in a long string algebra equation that lacks any situational context.
Amount Spent: What did you spend today -
100% Reality Business Metric of Value!
* I hope this makes sense already
Purchase Conversion Value: what is your attributable revenue to Ads today? - 100% Reality Business Metric of Value!
* Outside of spent, revenue is the second most important data points to truly understand. How much did you spend today and how much did you make today, that is the fundamentals of business.
Purchases: how many sales did you make? - 100% Reality Business Metric of Value!
* What is the volume of overall conversions are attributable to the platform today? This is outside of spending revenue the third most important metric, and arguably the only other metrics you need your reporting to show outside of the actual dollars in and dollars out
Clicks: How many people clicked on your ad to go to your site? - Vanity Metric!
* The amount of people that click on your ad has very very little correlation to the volume of qualified people in proportion to your overall traffic, it comes from any source. There’s an old saying, not all clicks are created equal. This is a nice to know, but provides no actionable insights, because the conversion rate off of a click click the one in 1 million or one out of 10
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