When running a Facebook ad campaign that uses your Facebook Page as the destination, Facebook will provide a variety of engagement statistics (user Actions) in your ads dashboard.
Understanding Facebook Ad’s Cost-Per-Engagement Metric
These engagement stats usually include the number of:
- Comments on Page Posts
- Link clicks
- Page Likes
- Page Photo Views
- Page Post Likes
- Page Post Shares
In addition to these individual stats Facebook provides the total number of Actions and the cost-per-post-engagement (which can also be called your cost-per-action).
To calculate the cost-per-engagement Facebook simply takes your total spend and divides it by the total number of engagement actions.
In the example above the total campaign spend was $54.33 and the total number of engagement actions were 51 therefore the cost-per-engagement was $1.07 (54.33/51 = 1.07).
Knowing the cost-per-engagement is important in a branding/educational campaign, but if you’re running a lead generation or sales campaign, you need to dig deeper.
Going Beyond Cost-Per-Engagement to Cost-Per-Lead
For example, in a lead generation campaign you would want to track two very important metrics:
- Number of people who click your link
- Conversion rate / number of people who become leads
While it may be nice to know how many people Liked the post or viewed the photo, these are really just vanity metrics for a lead generation campaign.
Instead you can calculate your cost-per-click by looking at the total number of link clicks under Actions (in the above example it would be 11 Link Clicks) or by looking at the number of unique visitors from this ad campaign in Google Analytics.
(If you’re not sure how to track your Facebook ads in Google Analytics check out our blog post with step-by-step instructions).
In the case of this particular campaign the cost-per-click at this time would be $4.94 ($54.33 total spend/11 clicks=$4.94).
Additionally, when I log into Google Analytics I can report that the conversion rate for this campaign is currently 11% which means we’ve had one visitor turn into a lead. Since the total spend so far is $54.33 the cost-per-lead so far is $54.33.
If you don’t want to have to calculate these numbers for yourself for every campaign you run, the AdEspresso Facebook ads manager can do it for you and present the data in a neat little dashboard:Knowing your cost-per-click and cost-per-lead or cost-per-conversion metrics is really important and will help you know if you’re spending too much on the campaign or not. After all, if you spend too much money to acquire a lead you may still lose out in the long run.
For example, if you calculate your numbers and you see your cost-per-lead is $20.00 but your product costs $5.00 and people usually only purchase from you one-time you have three options, figure out how to get your cost-per-lead down (this can usually be done through Facebook ad campaign testing), figure out how to increase your average order value or figure out how to increase the average lifetime value of a customer.
Do you know what your cost-per-click and cost-per-lead is for your campaigns right now? If not, break out your calculate or sign up for a FREE Adespresso account today and start watching your numbers!