“How do I know if my Facebook Advertising is working?'”
If you are spending more than $100/day in Facebook Advertising and you don’t know how to tell if it’s working, we’ve created a simple test to help you figure it out.
First, to make sure we are all on the same page, answer these questions:
- What is the action you want people to take on your website? Is it to buy a product? Fill out a form? Read the content? If you want to evaluate performance, you need to first know what you are measuring.
- Secondly, have you been measuring how many of those actions were caused by your advertising in the last 30 days?
- Next, have you calculated how much you are paying on average for each successful action? This is easy – you simply take the total cost of all your advertising, and divide it by the total number of actions (we call them conversions) you’ve earned with that budget.
- Now you should have a number that represents your “Cost of Customer Acquisition,” or COCA for short. You just calculated a 30-day average. What is more useful is to calculate a 3-day running average, over the last 30 days, to see what direction it’s moving.
Ready for the test? Ok, here we go:
Over the last 30 days, has your COCA decreased by at least 50%? If not, then you may have a problem. Here is a graph representing recent performance of our clients:
Not seeing these types of results? Here are some things to consider:
- Are you optimizing your campaign for conversions?
- Are you using structured testing to evaluate the effect of different images and headlines on ad performance? Click here if you want to learn more about how we use a structured testing process to lower our client COCAs.
- Are you using structured testing to evaluate the effect of different audiences on ad performance? (this should always be done AFTER image/headline testing)
- Are you using lookalike audiences? This is one of the most surefire ways to lower your COCA!
- Are you using site retargeting? This is another piece of low-hanging fruit that can help lower your acquisition costs.
Hopefully this post has helped you sort out your Facebook Advertising campaigns. If you need any help, leave a comment below or shoot us an email.