Today’s topic is a basic one, but it’s the most important lesson ever on Facebook ads…
…if you want to run profitable ads for a long period of time, that is!
Here’s the deal…
The way you need to run Facebook ads in 2016 and beyond is with science, not emotion.
The emotional approach is to throw money at Facebook and hope your ads will convert.
When you put it that way, it sounds pretty weak, wouldn’t you agree?
The scientific approach is to gather data, review and analyze it, and make decisions on your campaigns based on what that data is telling you.
Doesn’t that sound stronger?
Because it is.
That’s how I do all my traffic, and so does EMP…
…which is how we’re able to be consistently profitable and scalable.
It’s Not a Lottery!I’ll share a little bit of history about how I started out with Facebook ads.
In early 2013, I started running ads for various affiliate offers.
I’d spend ten or twenty bucks on an ad, sometimes not even capturing the leads to my own list…
And I’d get bummed out and frustrated when I wouldn’t make sale.
I developed a negative mindset with regard to paid traffic for a while because, “it didn’t work.”
The truth was that I wasn’t looking at any of my metrics whatsoever.
All I cared about was that I had put 20 bucks in and I wanted 50 bucks out.
That’s a lottery mindset, not a business strategy.
When you’re hoping and praying that your ads will work instead of setting yourself up for success…
It’s just like putting money into a slot machine and crossing your fingers.
You’re not doing any real work on your ads or learning from your results.
You’re just hoping that money is going to come out in the form of product sales.
So don’t be lame like “Old Matt.” ;)
Be like “New and Improved Matt,” who learned how to run Facebook ads the smart way—
And makes money from them!
Track Your Data
Well, fortunately for me, I learned the better way to run traffic: the scientific way.
I started studying some of the traffic leaders like Justin Brooke, Curt Maly, and Vince Reed, I learned how they tracked their data, and I learned how they made decisions on campaigns based on the results that they got:
They “bought data” first by looking at the early ad results and then made decisions:
- “Is this something I want to continue?”
- “Should I make changes here?”
- “Should I just completely kill this program?”
The decisions were all made based on complete data they had gotten from running the ads.
From there, I saw how they were able to turn unprofitable campaigns into very profitable campaigns.
They were getting to 4x, 5x, and 10x ROI on what they had spent…
…because they had to put in a little bit of work to get there.
I realized that I had been had been approaching paid traffic with the lottery mindset.
I needed to take the scientific approach instead, and it meant doing things like:
- Tracking all my metrics
- Making improvements
- Spending enough money to get adequate data
- Writing down my results
I became really good at spreadsheets, which I used to track my ads.
I actually have an MBA.
For that program, I took, hated, and almost failed a statistics class.
I remember thinking at that time, “I’m never going to use this stuff in real life.”
Well, here I am six years later, using statistics and data analysis.
Little did I know that I could use those skills to make money!
I use statistics to spot trends in ads and leads and increases in our cost per click.
I use it to see what we’re doing right so we can do more of it with lower cost metrics.
It leads to new pockets of income that I completely find by just tracking everything and writing it down.
That’s one pro tip:
Get good at Excel spreadsheets.
It’s really not that hard, and it’s actually kind of fun to track your numbers and find these little patterns that will help get you to profitability.
The takeaway is that I never would have gotten to where I am now if I hadn’t gotten more pragmatic about my approach to traffic.
I could probably teach a college course on paid traffic, but today you’re getting the basics of what to track—and keep track of—in spreadsheets, or at least to your own little traffic diary.
Let’s start by thinking through the process of what you’re trying to accomplish and reverse engineering it…
Begin at the End
What do you want?
Well, your ultimate goal is…
To make money.
Specifically, to make more money in sales than you spent into ad costs.
Sales come from leads.
Leads are people that we can contact about our business or people that will read our sales message and get into our sales funnel.
Leads come from clicks.
…meaning clicks on the ad in the News Feed to see the full content.
Clicks come from impressions.
….which is the number of people who see the ad.
So in normal order, the process is for people to see your ad, click on it, become a lead by getting into your sales funnel, and then buy.
You want to track those key parts of that process.
Starting at the end of the process, you’re tracking the cost per sale.
That’s how much money you spent on ads (the beginning of the process) versus how many sales you got (the end of the process).
How much did it cost you to get from “Point A” to “Point B?”
If you spent $100 in advertising and you got two sales, your cost is $50 per sale.
The step prior to that is to track the cost per lead.
This is important because the more leads you get, the higher chance you have of making a sale, and the more sales you will eventually end up with.
The basic idea is that the cheaper you can get those leads, the less you can spend on advertising to make a sale, and the more profitable you will get.
Calculate the cost per lead by taking the total amount you spent on that particular ad and dividing it by the number of leads you’ve got.
If you spent $100 on ads and you got 25 leads, that would be a cost of $4 per lead.
Moving to the previous step, how do you get a lead?
Someone sees your ad and they opt in by clicking to your page.
The most basic number to track is your cost per click.
As you can see…
- …the cheaper you can make the clicks,
- …the cheaper you’ll make the leads,
- …and the cheaper you’ll make the sales.
Now that you understand how the metrics relate to your end goal, let’s look at the process chronologically.
In order to get more sales, you want to increase number of leads.
In order to get more leads, you want to get more eyeballs on your ad.
Therefore, as a new marketer, focus on clicks.
You want to get more clicks and improve the cost per click
I do that every single day we are running traffic.
I don’t look at the cost per click from one day to the next day to the next day.
I look for patterns.
Am I starting out with a 20 cent cost per click today?
Is it trending up or is it trending down over the last week?
Depending on what I notice, if I see it’s trending up, I take a look at the ads that I’m running.
Other metrics will show me that maybe this ad is getting tired, so the Frequency Rate is going up.
If I see the cost per click going down, I consider scaling the ad and doubling the budget on it.
Cost per click is the starting place to see what’s happening with the ad, and from there, I can really dig in deeper and find out what’s going on.
That’s why tracking that cost per click is the most basic metric I use to make decisions about my campaigns.
Also called CTR for short, click through rate is the number of views or impressions your ad gets versus the percentage of people that actually stopped, look at your ad, and clicked through to your page.
Facebook is a business, and they don’t want to waste ad space because every single ad that somebody skips past and doesn’t click on is money lost to Facebook.
If a higher percentage of people click on your ads (you have a higher CTR) than your competitors, Facebook rewards you with a lower cost per click.
If a lower percentage of people click on your ads than your competitors, you will get charged more per click.
While I don’t necessary track CTR on the spreadsheet, it’s something I always look at as far as my ad goes.
If I your CTR is below 1%, there’s a real problem with that ad.
You’ve hit a home run if you get anything above 2%.
I’ve seen some of our students getting like 5-6%, so you can tell those ads are really dialed in.
Usually when I see a low CTR, it’s accompanied by a much higher cost per click because Facebook is saying…
“This ad sucks. People aren’t clicking on it and we’ve got to make up for it somehow. We’re going to charge you more for every click you do get.”
How do you improve your CTR?
Use better copy that reaches out towards your market, appealing images, and a relevant offer.
Let me give you just a quick example by some of the students I see in the Elite Marketing Pro “Fast Track” group.
Many are getting 5 and 6% CTRs.
They are advertising pictures of their family and using personal stories on their ads.
It really blends into the news feed and it’s getting people’s attention.
It’s getting curiosity, it’s very unique, and it’s very relevant to the people that they’re actually advertising to.
By being unique, relevant, and having a great image and very personalized copy that reaches out towards their markets, some marketers are able to achieve those high CTRs.
I pay some attention to the relevancy score, but I also take it with a grain of salt because I don’t always think it’s reliable.
The relevancy score is basically a number from one to ten that Facebook assigns you on your ad, similar to a letter grade in school.
It’s also based on CTRs.
It’s based on the response from the audience.
If somebody sees your ad, and they click, “I don’t like this. I think it’s spam,” it’s going to lower your relevancy score.
It’s usually the last thing I look at when deciding if an ad is working, because sometimes it’s reliable, and sometimes it’s ridiculous.
I’ve seen very profitable ads with great metrics and a low relevancy score.
I’ve also seen the complete opposite—an eight or nine out of ten for a relevancy score, but the ad metrics are just horrible.
Like I said, I take it with a grain of salt, but I do pay attention to it.
It’s just not the overall deciding factor on whether I keep an ad, scale it, kill it, or change it.
The metrics I suggest you track at the very minimum, are:
- Cost per click,
- Cost per lead, and
- Cost per sale
You should all be putting those into a simple Excel spreadsheet and looking at those every single day and looking for various trends that you can spot on your advertising.
You also want to make sure your click-through rate making is at least 1%.
Higher is much better because, at the end of the day, because it’s going to help you with your low cost per click and then, at the end of the day, the relevant score as well.
Also, let’s talk video.
Facebook videos are a bit different than regular ads because they are for branding purposes, so I don’t really look at the cost per click on those.
A similar metric you want to track is the cost per view.
Obviously, you want to make sure you get as low cost per view on your videos as possible.
When To Review Ads…
People often ask…
“How do I know when to look at my ads? And how do I know if they’re working or not?”
Answer: after you have at least 3,000 impressions.
At that point, Facebook’s algorithm is kind of settled in and you can look at your stats and know that they will be reliable.
The numbers don’t matter until you have enough impressions.
Super Cheap Ads?
There’s another common mistake that people make.
If you are getting super cheap ad clicks, like 3 cents, or 7 cents, that’s great if you’re doing it correctly.
Most of the time what’s happening when the clicks are that cheap is that there are no opt-ins because the audience network is on or you’re unintentionally advertising on Instagram.
Make sure that in the placement section when you’re creating your ad that you turn off audience network and turn off Instagram.
The only place you should be advertising on is mobile and desktop in the News Feed.
Even turn off the right sidebar, for now, until you know what you’re doing.
Your Next Steps…
Now, may I make a suggestion?
Because here’s the honest truth…
It can take a fair bit of costly trail and error to optimize all these metrics and create a winning campaign.
However, I do know a proven shortcut…
Which has helped dozens of marketers get in the black (often within just a few days).
And that’s taking an over-the-shoulder tour of…
Our most profitable offers, audiences, ads, and landing pages
Yep, here at Elite Marketing Pro, we’ve put together a point-for-point tutorial revealing our exact advertising process in a 100% FREE traffic workshop…
Which is hosted by none other than Tim Erway, our fearless leader and CEO.
Simply pick a time and register right here.
You’ll discover how you can put together a profitable ad campaign in just 10 minutes a day with as little as $10 in initial ad spend.
We’ve used the exact formula to turn a $10 test campaign into $141,246.30 in sales.
Those are 100% real numbers, and Tim will show exactly how we did it.
So if you haven’t registered yet, what are you waiting for?
Until next time,
Elite Marketing Pro
Latest posts by Matt Baran (see all)
- 7 Facebook Ad Metrics You Should Be Tracking - November 3, 2016
- Six Factors to Create Higher Converting Campaigns on Facebook - August 11, 2016
- Using Facebook to Engage Your Audience in 8 Easy Steps - July 12, 2016