What’s Your Return on Investment with Facebook Ads?

October 1, 2021

What’s Your Return on Investment with Facebook Ads? | AIA Book in a free 30 minute strategy session

Facebook Ads are a powerful tool for digital marketers, and many businesses rely mainly on social media advertising to boost their conversions. Understanding how to measure your return on investment (ROI) is crucial for maximizing your ad performance and tailor your future campaigns.

In the long term, making a habit out of measuring your Facebook Ads return on investment ensures that your money is spent efficiently and your Ads are actually bringing the revenue you are expecting.

In this article, we will get into more detail on how to measure your social media marketing ROI and how to improve your Facebook Ads campaigns.

How Is ROI Measured with Facebook Ads?

You can measure the ROI of your online marketing budget by determining your Return on ad spend (ROAS). This value shows the ratio between the revenue brought to you by your Facebook Ads and the total amount of marketing dollars you have spent on your Facebook advertising.

When advertising on Facebook, you take advantage of the social network’s efficient tracking system that can provide you with palpable, hard data on how successful your marketing investments are.

ROAS is calculated very simply: it’s the proportion between the total revenue brought to you by Facebook Ads, divided by the total amount you have spent on Facebook Ads. For example, let’s say that you have spent $1,000 on Facebook Ads in a 30 days period. Facebook reports show that these ads generated a total revenue of $4,000. Your ROAS for the 30 day period is 4X.

There are more ways to measure your ROAS, but the most common ones are Facebook’s own integrated system, named Facebook Pixel, and Google Analytics, the classic reporting tool for online marketing.

How to Set up Facebook Pixel

Facebook pixel is a code placed on your website to measure traffic brought to you by Facebook in a detailed way. Having Facebook pixel already embedded in your website’s code before you run a Facebook Ads campaign enables you to reach custom audiences and highly target your customers. Here is a step-by-step guide on how to install a Facebook pixel on your website.

Once the Facebook pixel is installed, you can use pieces of code that are linked to certain events, like shopping cart, checkout, purchase, viewing content (like a relevant landing page), completing registration, etc. The various types of event codes that you can add on your website enable you to target audiences at a high level of detail.

So How Do You Retrieve the ROAS from the Facebook Ads Dashboard?

To get the relevant data for your ROAS calculations, you need to make sure that Facebook pixel tracks the value of the purchase, the number of purchases, and conversion value. Once Facebook pixel event codes are placed to gather the relevant data, you can create a custom reporting column that will display real-time data on your ROAS.

The indicators that you want to have in your custom reporting column are:

● Campaign Name
● Delivery
● Ad Set Name
● Bid Strategy
● Budget
● Last Significant Edit
● Results
● Reach
● Cost per Result
● Amount Spent
● Ends
● Website Purchases
● Cost per Purchase
● Purchases Conversion Value
● Website Purchase ROAS

As you can see, the Facebook Ads Dashboard pretty much gives you everything you need to know when monitoring the ROI of your Facebook ads. To get a perspective view on how your ads are performing, you should definitely add the 28-day view window to your custom reporting column.

Google Analytics Reports on Social Media ROI

You can also find the ROAS value in Google Analytics, under the name of “ROI Analysis” if you use the Social Reports, which gathers data regarding social networks traffic. Here is a guide on how to use Google Analytics to track social media traffic on your website and landing pages. Even for less versed users, Analytics still provides plenty of easy to read the information on how well your Facebook Ads are performing.

How to Increase the ROI of Your Facebook Ads Campaign?

There are so many things to say about how to increase the effectiveness of your Facebook ads! We will mention some of the most basic things you should do as a business owner trying to increase their Facebook Ads ROI.

Targeting the Right Audiences

Facebook Marketing

Targeting is a big part of running an effective Facebook Ads campaign. Facebook pixel allows you to create custom ads for your leads, customers who are at different levels on the sales funnel. From targeting newly registered users to addressing loyal clients, targeting is one of the most important actions in your strategy. You can monitor the audiences on your business Facebook pages and those that land on your website through your Facebook Ads through your Business Manager.

Retargeting

The users who, for some reason, did not end up as conversion after targeting them with your advertising can receive retargeted ads after leaving your website. For example, you can send them price alerts for items that they’ve placed in their shopping cart, but never ended paying.

Split Testing

Split testing can save you a lot of money as it’s a straightforward way of choosing the best version of your ads. Running an A/B test before you put all your eggs in a basket is not necessarily going to increase your ROI, but it will rather save it from decreasing as a result of a bad ad choice.

When doing a split test, the one thing you need to make sure of is that you have the same target group for all the versions of the ads that you will run. Other than that, just try different things and see how it works.

Conclusion

Measuring the return on investment of your Facebook Ads is important for building an effective strategy and not throwing your marketing budget out the window. Do you still have questions about the whole process? Then, the Facebook Marketing Experts at Australian Internet Advertising are ready to give you a free first consultation and help you find the best way to increase your return on investment.

Billy P.

About The Author

William Polson founded Australian Internet Advertising in 2013 and has over 12 years of experience immersed in Digital Marketing.

With an in-depth level of digital marketing knowledge, William has been sort after by and worked for, many large national brands including Subaru, Blooms The Chemist, and Nova 96.9.

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