How to Measure ROI on Facebook Ads

Likes, comments, shares, and click-through rates on a Facebook ad can be deceptive. While these metrics offer insights into content quality and audience interests, achieving a substantial Facebook ROI (return on ad spend) goes beyond social engagement. If you’re wondering how to accurately measure Facebook ad ROI, I’ve got you covered with a step-by-step walkthrough. Let’s get started!How To Calculate ROI on FB Ads

Calculating Facebook Ads ROI: A Step-by-Step Guide

Note: This method leverages free tools like Google Analytics and Facebook Ads Manager, making it accessible for marketers and business owners.

  • Log in to your Google Analytics account.
  • Navigate to “Acquisitions > All Traffic > Source/Medium,” set the date range to the last month, and use advanced reporting to filter out Facebook and Instagram referrers.
  • Record the last direct sales from Facebook, representing total revenue generated.
  • Go to “Conversions > Multi-Channel Funnels > Assisted Conversions,” choose ‘Source,’ and filter Instagram and Facebook URLs to check the Assisted Conversion Value.
  • In Facebook Ads Manager, set the date range to the last 30 days and determine the total spent on all Facebook campaigns during this period.
  • Customize columns in Facebook Ads Manager, click on Comparing Windows, and select the attribution window (e.g., 28-day or 1-day view) based on your marketing strategy.
  • Check the “Website Purchases Conversion.”
  • Calculate ROI using the formula:

\[ \text{ROI} = \left( \frac{\text{Net Profit}}{\text{Net Spend}} \right) \times 100 \]

  • Example Calculation:

         – Ad spend: $80 for a $50 product.

         – Assume 100 clicks, 50 website visits, 20 product likes, and 10 purchases.

          \[ \text{Net Profit} = \$500 – \$80 = \$420 \]

          \[ \text{Net Spend} = \$80 \]

          \[ \text{ROI} = \left( \frac{\$420}{\$80} \right) \times 100 = 525\% \]

Note: Set a target ROI aligned with financial expectations for successful Facebook ad campaigns.

  • Difference between ROI and ROAS:

        – ROI measures total revenue from a Facebook ad, indicating    campaign profitability.

        – ROAS (Return on Ad Spend) calculates gross revenue from every penny spent, focusing on campaign effectiveness in generating impressions, clicks, and revenue.

Why Track ROI on FB Ads?

Tracking Facebook Ads ROI is essential to assess campaign effectiveness and determine its worth in terms of time and investment. If a campaign helps achieve financial goals, consider doubling down to maximize profits.

Not all clicks are equal; prioritize 10 converting leads over 100 non-converting ones. Business owners should avoid fixating on vanity metrics like ad likes, especially if the ad spend doesn’t break even or yield a decent ROI.

Without tracking Facebook ROI, assessing lead generation success or the impact on the balance sheet becomes challenging. Avoid unnecessary ad spend to scale your business effectively.

Utilize Google Analytics and Facebook Insights for a comprehensive understanding of ROI and its social impact. Additionally, acknowledge that some sales occur offline and often go unnoticed; explore methods to track them for a holistic assessment of campaign impact.

Google Analytics for Measuring ROI on FB Ad Spend

While Facebook Insights provides an overview of your ad campaign, for a more comprehensive assessment of engagement beyond Facebook, turn to Google Analytics!

Imagine John landing on your website through a Facebook ad and making a purchase. This indirect Facebook ad ROI is vital to calculate. Use the URL tagging feature to create tags from Facebook, tracking each campaign individually. Afterward, check web traffic on Google Analytics.

1. Navigate to Acquisitions > All Traffic: (Refer to steps 1-8 for a detailed process). Here, you can observe the number of users arriving via Facebook ads. Discover their stay duration, pages visited, and whether they made a purchase.

This process is instrumental in evaluating the value of your Facebook ad spend. It allows you to gauge if the investment is yielding meaningful engagement and conversions.

But Facebook Insights and google and Google Analytics Can’t Track offline sales

Recognizing that not all conversions occur on Facebook or websites is crucial, especially for business models relying on substantial front-end sales through sales calls, as seen in high-ticket coaching businesses. While Facebook Insights provides insights into overall social engagement, and Google Analytics unveils the dynamics of off-Facebook marketing and conversion rates, both fall short in measuring offline ROI.

Key Insights

Facebook Insights Constraints: Lack of in-depth analysis for off-Facebook advertising campaigns, coupled with impractical data export, limits its effectiveness.

Google Analytics Limitations: Despite its proficiency in off-Facebook insights, it cannot quantify sales occurring during a call.

Real-world Scenario

Consider closing a $20,000 deal over a call after a $500 Facebook ad spend, resulting in an impressive 3900% ROI. Remarkably, neither Facebook Insights nor Google Analytics registers any trace of this substantial sale.

Addressing the Challenge: Enter 46solution!

To overcome this hurdle, leverage the capabilities of platforms like 46solution. This specialized tool integrates offline sales data, providing a comprehensive solution to measure ROI, especially in scenarios where significant sales materialize offline.

Conclusion

Conclusion: Unlocking Facebook Ad Success!*

Measuring ROI on Facebook Ads is a game-changer, and we’ve just given you the playbook. For an extra boost and to tackle those tricky offline sales, explore the wonders of 46solution at Questions or ready to elevate your ad game? Shoot an email to [email protected]. Your secret weapon for maximizing Facebook ad impact is just a click away! 🚀

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