Your Ad Campaigns are Live, Now What?
You've launched your Facebook (or any other ad platform) campaign. But the work isn't done yet. To really succeed, you need to keep improving your campaigns even after they've started. But how do you do that?
This is where many people get stuck, falling into analysis paralysis, unsure of what metrics to focus on, and how to make decisions.
Let's break down the process I use in my daily work and find out.
There are two very important aspects of your campaign maintenance, Optimization and Scaling. In this article we will only cover Optimization The topic of scaling is extensive and we will dive deeper into that concept and how to effectively implement it in another article, so stay tuned!
1. Optimization refers to the process of refining and improving the performance of your advertising campaigns.
It involves analyzing data, identifying areas of improvement, and making changes to maximize the effectiveness and efficiency of your ads.
The goal of optimization is to achieve better results, such as higher click-through rates, conversions, and return on ad spend, by refining targeting, ad creative, bidding strategies, and other campaign elements.
2. Scaling refers to the process of expanding the reach and impact of your successful ad campaigns.
It involves increasing your ad spend, expanding targeting parameters, or exploring new advertising channels to reach a larger audience and generate more conversions or revenue.
Scaling aims to amplify the positive outcomes of your campaigns without compromising their performance or efficiency.
Successful scaling requires careful monitoring, testing, and adaptation to ensure that the increased investment translates into proportional returns.
PART 1: CAMPAIGN OPTIMIZATION
When Do I Start Optimizing my Campaigns?
The first thing I check is whether the campaign has been running for at least 4-5 days and if it has reached at least 100k people.
This helps me know that enough people have seen the ad, and if it's going to perform well, it should have shown some positive signs by now. This is typically when I start optimizing campaigns.
Return on Ad Spend (ROAS)
Next, I look at the Return on Ad Spend (ROAS), which you can see at Campaign, Ad Set or Ad level. It is calculated using the formula: (Revenue from an Ad Campaign / Cost of Ad Campaign).
ROAS is a measure of the effectiveness of your advertising campaign, showing how much revenue you're generating for each dollar spent on advertising.
You should have a good understanding of what your breakeven ROAS is.
This will depend on your specific business and profit margins, but in general, a higher ROAS indicates a more effective campaign.
To calculate your breakeven ROAS, you need to understand your profit margins.
Profit margin is the difference between the selling price of a product and the cost to produce it. It's usually expressed as a percentage of the selling price.
Once you know your profit margin, you can calculate your preferred ROAS.
Remember, every business is different, so it's important to calculate these figures based on your own costs and prices.
Example: Calculating Your ROAS
Let's say you're selling a product for $20, and it costs you $8 to make it.
First off, you need to calculate your profit margin. This is the selling price minus the production cost, divided by the selling price, then multiplied by 100 to get a percentage.
In this case, your profit margin would be (($20 - $8) / $20) * 100, which equals 60%.
This means you're making a 60% profit on each product sold, before factoring in advertising costs.
Next, you calculate your breakeven ROAS. To break even on your ad spend, you need to make at least $1 in revenue for every $0.60 spent (because $0.60 is 60% of $1).
So, your breakeven ROAS would be 1 / 0.60, which equals 1.67.
This means that for every dollar you spend on advertising, you need to make at least $1.67 in revenue to cover both the advertising cost and the production cost. Any revenue above this would be your profit.
Identifying Losing Ads and Ad Sets
Now, to start optimizing using ROAS, first, examine this metric between different ads in an ad set. Try to spot the losers and turn them off. You can later add new ads to the ad set so that Facebook can start comparing them to the ones performing well.
Tip: When you add new ad creatives, try to keep them similar to the successful ones, but consider changing a few features like the messaging, certain elements or colors.
Next, move to the ad set level and compare the ROAS of each ad set. Follow the same process: if you find clear under-performers, look into that ad set and check the ads.
If there's one ad creative that's not doing well and is bringing down the performance of the entire ad set, consider turning it off. If all ads are under-performing, then the issue might be with the ad set target audience itself. In this case, consider turning off this ad set and keep only those with a better ROAS.
What to Do If You Don't Have Revenue Data From Your Website?
While ROAS is a useful indicator of performance, not all businesses, especially those that aren't e-commerce, have revenue data from their website.
Therefore, it's also important to check other key metrics, such as Cost Per Action (CPA) and number of Conversions (Sales, Leads etc.).
CPA measures how much it costs you to get a user to complete a desired action. This could be a sale, a lead, or any other objective you've set for your campaign.
For example, consider a company that generates leads on their website. They might not have ROAS, but they do have CPA and Cost per Lead (Form submission on their website). In this case, they would focus on how much it costs them to get a user to register on their website.
Just like with ROAS, you would look at the CPA of different ads and ad sets, turning off the ones that are underperforming.
Tip: Remember, the ad optimization process is iterative. You should keep track of all your changes and conduct A/B testing. It's a good idea to log all your changes in an Excel sheet or similar tool for future reference. This way, you can learn from past campaigns and continually improve your strategy.
Other Important Metrics
In addition to Return on Ad Spend (ROAS), and CPA, there are several other important metrics that can help identify good and bad performing campaigns. Here are some additional metrics you should consider:
1. Outbound Click-Through Rate (CTR): CTR is a critical metric that measures the percentage of people who clicked on your ad after seeing it.
A high CTR indicates that your ad is relevant and appealing to the audience. On the other hand, a low CTR might suggest that your ad's messaging isn't resonating with the targeted audience, and you may need to refine your ad creative or targeting.
2. Result Rate / Conversion Rate (CVR): This metric shows the percentage of users who took the desired action (such as signing up for a newsletter, making a purchase, or filling out a contact form) after clicking on your ad.
A high conversion rate suggests that your ad and landing page are effective in convincing visitors to complete the desired action.
3. Frequency: Frequency measures how often your ad is shown to the same user. A high frequency can sometimes be a sign of ad fatigue, meaning your audience is seeing the same ad too often, which can lead to decreased engagement.
Keep an eye on this metric and consider refreshing your ad creative if the frequency becomes too high.
4. Engagement Rate: This metric takes into account the likes, comments, shares, and other interactions that your ad receives.
A high engagement rate suggests that your ad is resonating with your audience and encourages further interaction. This can also be a signal of the quality and relevance of your content.
5. Reach: Reach tells you how many unique users have seen your ad. Increasing reach is essential for brand awareness campaigns, but it’s also important to ensure that you're reaching the right audience.
6. Cost Per Click (CPC): CPC measures how much you pay for each click on your ad. This metric is vital for understanding how much you’re spending to get people to your website or landing page.
Lowering the CPC while maintaining or improving the quality of traffic can lead to a more efficient use of your ad budget.
7. Cost Per Mille (CPM): This is the cost per 1,000 impressions. It helps you understand how much you're paying for visibility.
Lower CPMs can be a sign of efficient targeting, while high CPMs might indicate that your targeting is too broad or that there’s high competition for your audience.
8. Video Metrics: If your campaign includes video content, metrics such as Video Average Watch Time and Video Engagement (likes, shares, comments) are crucial for understanding how viewers are interacting with your video content.
By keeping a close eye on these metrics, you can gain deeper insights into the performance of your Facebook campaigns. This will enable you to optimize your ads for better results, ensuring that your advertising budget is used effectively and that you’re reaching your campaign goals.
In Summary
So, let’s wrap things up. When it comes to keeping your Facebook ad campaigns in perfect shape, it’s all about Optimization and Scaling. However, in this article, we delved into Optimization.
Optimization is all about making your ads better over time. You need to check on how your ads are doing, find out what's working and what's not, and then make improvements.
This involves looking at data, like your Return on Ad Spend (ROAS), and making tweaks to things like your target audience, the creative elements of your ad, and how much you’re bidding.
Remember, before you start optimizing, make sure your campaign has been running for at least 4-5 days and has reached a good number of people (around 100k). From there, pay close attention to metrics like ROAS, to know how much money you’re making compared to how much you’re spending.
It’s also important to keep an eye on other metrics like Click-Through Rate, Conversion Rate, Frequency, Engagement Rate, Reach, Cost Per Click, and Cost Per Mille.
By keeping track of all these numbers and knowing when to make changes, you’ll be on your way to making your ads more effective and getting a better bang for your buck.
Don’t forget, we’ve only covered Optimization here. Scaling, or making your successful campaigns bigger, is just as important and we’ll dive into that in another article. Stay tuned!
The journey to master performance marketing is ongoing and filled with learning opportunities. If you're hungry for more knowledge and looking to delve deeper into this field, I invite you to check out the courses I offer at digitalhub.edu.ge
Just a note: these courses are fully in Georgian.
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