12 Facebook Ads Metrics Every Ecommerce Business Should Track
Launching a Facebook ad is easy. Set it up. Launch it. Done. Knowing when to scale or pause the ad can be difficult, especially if you’re not tracking the right metrics.
In fact, tracking the right Facebook metrics can make or break your entire advertising. Choose the right ones and you’ll be able to take smarter, faster decision. Choose the wrong ones and you’ll see your budget spent without understanding why your ads are not bringing any results.
With over 150 metrics to choose from, tracking the right metrics and avoiding the unnecessary ones is no easy task, unless you’re a Facebook Ads expert.
The Essential Ecommerce Facebook Metrics
In order to start tracking the right metrics, we’ll have to adjust the default dashboard view in Ads Manager.
On the top right corner press on Columns button and then click on Customize Columns.
In order to edit our dashboard, we’ll remove almost all default Facebook metrics and start searching for the 12 metrics described below.
Once the right metrics are selected and sorted, save the setting as a preset.
To ensure your preset is being used every time you open Ads Manager, simply set it as default.
Now you know how to create your own custom views in Ads Manager, let’s focus on adding the essential metrics for your ecommerce business. Ready? Let’s get started.
1. Purchase Conversion Value – total value of purchases tracked with the conversions objective.
Facebook Ads can be deceiving if you’re looking at the wrong metrics. You could be getting a thousand clicks for few bucks, but if you’re not generating any sales, it’s not going to help you. Purchase Conversion Value shows you exactly how much revenue your ad has generated.
As a rule of thumb, if an adset spends more than the value of the product you’re promoting without bringing a purchase conversion, in most cases it won’t be profitable, so you might as well pause the adset.
Ultimately, the right time for pausing a bad adset depends on how aggressive your strategy is and what kind of risk level your company can bear.
2. Purchase ROAS – calculated as Purchase Conversion Value divided by Ad Spend.
ROAS is the holy metric of any ecommerce business. That’s because it usually shows if an ad is profitable or not. The higher the ROAS, the more profitable your ad.
To understand what ROAS is and why is so important, let’s take some examples:
- Ad spends $10 and generates $10 in sales. That’s a ROAS of 1.
- Ad spends $10 and generates $50 in sales. That’s a ROAS of 5.
- Ad spends $10 and generates $5 in sales. That’s a ROAS of 0.5.
You may noticed few things here. First, a ROAS less than 1 will always be unprofitable and second, a ROAS of 1 will (theoretically) mean break even.
I say “theoretically” because a ROAS of 1 is does not mean break even in ecommerce. When we spend $10 and generate $10 in sales, we need to count in the COGS (cost of goods sold) as well.
Each business is different, so the best way to approach ROAS is to either calculate the minimum ROAS for a specific product you’re advertising or calculate an average ROAS for your entire line of products sold.
Generally, our ads need to hit at least 2 ROAS in order to be profitable.
3. Website Purchases – The number of purchase events tracked by the pixel on your website and attributed to your ads.
Website Purchases simply tell us the exact number of purchase conversion an ad has generated. Just like in the case of Purchase Conversion Value, if we see 0 and the amount spent bigger than the value of the product, we should be pausing the ad.
One of the best use cases for this metric is when we’re thinking about scaling an adset: always be looking at the number of purchases generated. We may be hitting a ROAS of 50 for an adset which spent $1 and returned $50, but that’s not the ideal adset for scaling. We’d rather see an adset with ROAS 3 which is generated hundred of purchases in the past month.
4. CTR (Link-Click-Through-Ratio) – The percentage of times people saw your ad and performed a link click.
We only want to see the CTR for people who actually click on our links and navigate to our website or Facebook/Instagram page, so we need to make sure we select the right CTR metric: Link-Click-Through-Ratio.
We want to be able pausing the adsets as soon as we realise they won’t be profitable, so CTR (Link-Click-Through-Ratio) is an essential tool that can tell us that prior an adset is generating any purchases or ROAS.
The CTR varies for each industry and business type, but the average CTR on Facebook is 0.90%. That means if your ads are in that spot they should be good. Hitting a much lower CTR, such as 0.10% usually tells us that the ad is not engaging, therefore it won’t be a success.
5. Cost per View Content – The average cost of each content view.
While most advertisers focus on CPC (cost per click), I believe Cost per View Content can present better insights. Let me explain: content view means page view in our case. That means a person who performs a single click can perform multiple content views, since that person browses our website.
As general rule, the more pages a user visits, the more time it spends on our website, the better chances are it will convert into a paying customer. Knowing not only the cost per one click, but the cost per each content view, gives us a better understanding of user behaviour and ad performance.
When you track CPC (cost per click) you simply track how much you are paying for 1 click, but not taking in consideration the quality of the clicks (the number of pages that user visited).
The Cost per View Content varies, depending on the target country, size of the audience and the type (and quality) of your ad. For example, when targeting main countries (US, UK, Canada), we want to pay maximum $1 per View Content. In our case, anything higher than that will result in an unprofitable ad.
Strat tracking Cost per View Content and you’ll discover what your average cost is. Any ad that costs double the average cost per View Content and brought no purchases can be paused, even if it only spend just few dollars.
6. Content Views – The number of view content events attributed to your ads.
The number of Content Views can be a good indicator of the potential of an ad, way before it starts generating purchases or adds to cart.
If an adset spent $3 and generated no Content Views and no Purchases, it’s usually a clear indicator of a bad adset.
One of the most effective ways to prevent spending the budget on bad ads, is to track Content Views and pause ads which spend over a certain amount, without bringing Content Views or Purchases. I recommend pausing any ad which spends over $2 and brings no results.
I added two metrics into one section, as they are related. An add to cart action is done when a user presses add to cart button, while a checkout initiated action is done when a users starts the checkout process. Usually, in order to reach the checkout process, a user must press add to cart button.
Knowing how much we’re paying for add to cart or checkout initiated actions helps us better understand user behaviour and take smarter actions, just like in the case of Cost per View Content.
One of the best uses of the two metrics is when an adset has spent a sizeable size of budget and generated no purchase conversions. Imagine this:
- An adset spends $30 and the Cost per Add to Cart is $15.
- An adset spends $30 and the Cost per Add to Cart is $1.
If we’re not tracking Cost per Add to Cart we could consider both adsets being bad, therefore pausing them too soon. When we track Cost per Add to Cart, we notice one of them generated two expensive adds to cart, while the other generated a large number of cheap adds to cart.
As a rule of thumb, the more adds to cart / checkouts initiated an ad generates, the better chances of success it will have. We noticed a Cost per Add to Cart / Checkout Initiated between $1 and $10 is acceptable, while anything that costs over $10 is a sign a bad ad.
9. Cost per Purchase – The average cost of each purchase.
Cost per Purchase brings clarity to our metrics when we use different campaigns for different products. That means a “good” Cost per Purchase means is depending on the product we’re promoting on Facebook.
A Cost per Purchase of $40 is great when we’re advertising a $200 watch, but it’s not so great when we’re advertising a $30 t-shirt.
If you’re running different campaigns for different products, first determine your maximum allowed Cost per Purchase for each product then start tracking each campaign individually.
10. Adds to Cart & 11. Checkouts Initiated – The number of add to cart and checkouts initiated events attributed to your ads.
Just like Content Views, Adds to Cart and Checkouts Initiated can give us useful clues about the future performance of an ad, before it started generating purchases.
Let’s take these 2 example:
- An ad spent $15, at a Cost per View Content of $0.10 and 0 Adds to Cart / Checkouts Initiated.
- An ad spent $15, at a Cost per View Content of $0.10 and 10 Adds to Cart / Checkouts Initiated.
If we didn’t track the Adds to Cart / Checkouts Initiated, we would be looking at the examples above and see the low Cost View Content. Naturally, we think both adsets look great, so we should let both to keep spending.
When we track the number of Adds to Cart / Checkouts Initiated, we clearly see the first one spent $15 and generated no conversions, therefore it’s safe to say it won’t be a success.
As a rule of thumb, if your ads spent more than $15 and generated no Adds to Cart / Checkouts Initiated, it’s a clear sign that you can safely pause the ad.
12. Frequency – The average number of times each person saw your ad.
Frequency is the last metric on our list, not because it’s the least important, but because it’s different from the previous ones.
Since this metric is telling us how many times a person saw our ad, the number has a significant impact on the performance our ads. A frequency too high can lead to less engagement and negative feedback but also a frequency too low can mean we’re leaving money on the table.
Allow me to explain.
All ads should not be treated equally. As an example, an acquisition campaign does not share the same attributes with a retargeting campaign, which targets website visitors.
Acquisition ads means targeting a cold audience who doesn’t know who we are or we have to offer. If someone sees an ad and doesn’t click on it for the first time, chances are it won’t click on the ad the 7th time it sees it.
Well, that rule changes when we’re talking about retargeting ads, which target website visitors. Showing an ad multiple times to a person who visited our website and is familiar with our offering, it’s quite effective, therefore having a low frequency for retargeting ads means you’re leaving money on the table.
By now you may ask… what’s the ideal ad frequency? There’s no one-size-fits-all when we’re talking about about Frequency. However, there are two rules of thumb you can use:
Target Frequency for acquisition ads = 1-2
Target Frequency for retargeting ads = 4-8
Also, Facebook describes the factors to consider when planning for effective frequency:
Tracking the right metrics is the foundation of a successful Facebook Ads campaign for any ecommerce business. To take the smart decisions, don’t rely on a single data point (metric) and always try tracking multiple data points for your ads.
Once you start paying attention to the metrics that matter, ads management will become easier, faster and more effective.
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