TheVigilante
Banned - Multiple Rules Violations
- Aug 31, 2010
- 14,993
- 16,105
Savannah Sanchez, social media marketing extraordinaire, just presented a bold idea: Get rid of CPC (cost per click), CPM (cost per mille) and Relevance score from your dashboards. Why? Because there’s no correlation between CPC and ROAS (return on ad spend).
Savannah’s analysis is drawn from her experience with more than $10M in ad spend on FB, so we should probably listen to what she has to say.
Let’s start with some context. On Facebook you can target two types of users:
To target those engaged shoppers, optimize your campaigns for Conversion.
After aggregating and analyzing the data of 50 ad accounts, amounting to $10M of ad spend, Savannah measured the correlation between CPC and ROAS.
The finding?
There’s no correlation between CPC and ROAS.
This comes down to which users you target: if you target engaged shoppers, your CPC will be higher – but so will your ROAS!
+ Which key metrics should you focus on instead? Savannah recommends making these changes to improve your approach:
Source: http://thesocialsavannah.com/blog/articles/3-facebook-metrics-that-matter-based-on-10-million-ad-spend
Savannah’s analysis is drawn from her experience with more than $10M in ad spend on FB, so we should probably listen to what she has to say.
Let’s start with some context. On Facebook you can target two types of users:
- Engaged shoppers, people that frequently click on FB and IG ads and buy from them. This is expensive traffic, but it’s usually valuable.
- Users that click on your ads but do not convert. This is the traffic that gives you low CPCs, but won’t help you stack piles of cheddar!
To target those engaged shoppers, optimize your campaigns for Conversion.
After aggregating and analyzing the data of 50 ad accounts, amounting to $10M of ad spend, Savannah measured the correlation between CPC and ROAS.
The finding?
There’s no correlation between CPC and ROAS.
This comes down to which users you target: if you target engaged shoppers, your CPC will be higher – but so will your ROAS!
+ Which key metrics should you focus on instead? Savannah recommends making these changes to improve your approach:
- Remove CPM, CPC, and Relevance score metrics from your dashboard.
- Add Website Purchases, Unique Adds to Cart, and Unique Checkouts Initiated to your dashboard. Use these three metrics as the main indicator to kill or scale your ads.
- If an ad doesn’t get at least one purchase after spending 1x AOV (and Unique Adds to Cart and Unique Checkouts Initiated metrics are not high enough to convert one sale), turn it off and launch a new ad creative or audience.
- If an ad gets at least one purchase after spending 1x AOV (or Unique Adds to Cart and Unique Checkouts Initiated are high enough to convert one sale), let the ad spend to the next AOV multiplier (2x, 3x, 4x, and beyond).
Source: http://thesocialsavannah.com/blog/articles/3-facebook-metrics-that-matter-based-on-10-million-ad-spend
