Friday, July 24th, 2020
When it comes to building a Facebook ad campaign, we’re faced with many decisions. One of the most common areas of opportunity that I’ve uncovered has to do with choosing the correct marketing objective. This probably seems self-explanatory. If you’re familiar with Facebook’s ad platform you know that a user can optimize ads to achieve awareness, brand consideration, or conversion. But is it really that simple?
Consider the 7-Day Learning Phase
It’s logical to think that if, for example, we want more loan application submissions, we would choose conversions as our marketing objective, counting each application submission as a conversion. However, we need to consider the 7-day learning phase associated with any Facebook Ad campaign. During this phase, Facebook’s algorithm gathers the information necessary to optimize our campaign for success. What I find often unknown, is that the algorithm needs roughly 50 conversion events during the learning phase to gain the information necessary to effectively optimize a campaign. So, in this example, we would need to obtain 50 application submissions within the first 7 days of our campaign to provide Facebook’s algorithm with enough information to effectively do its job.
Testing Marketing Objectives
So.. what does this mean for us? I think it ties back to the importance of continuously testing our Facebook Ads. If your marketing objective is conversions and you’re not getting close to 50 conversion events within that initial 7-day learning phase, test a different marketing objective that you can get 50 events for to see if it provides better results. Maybe you can’t get 50 application submissions, but I bet you can get 50 landing page views. Would optimizing your campaign for landing page views result in more loan applications? Only testing will tell. Give it a try!
I hope you found this blog useful. If you have any questions about selecting the correct or testing Facebook Ad marketing objectives, feel free to message me on LinkedIn or email me directly at firstname.lastname@example.org. Thanks for reading!
Sunday, March 24th, 2019
In Facebook’s algorithm we trust, or at least we’ll have to come September! In case you haven’t heard, Facebook Ads budgeting will soon need to be set at the campaign level. We’ll no longer be able to set specific budgets for each individual ad set. Campaign budget optimization is something Facebook previously rolled out, but because of ineffectiveness, never really stuck. Facebook decided to go back to the drawing board to provide marketers with a better product, and for the most part, they did.
What is Facebook Ads Campaign Budget Optimization?
Campaign budget optimization is a great concept. Instead of setting budgets at an ad set level, budgets are set at the campaign level where Facebook’s algorithm optimizes and distributes budget automatically to help marketers achieve goals. For example, if our campaign is set up for conversions and we have 6 ad sets, Facebook’s algorithm allocates budget between ad sets to produce the greatest number of conversions at the lowest cost.
Challenges with Campaign Budget Optimization?
Campaign budget optimization gets messy when marketers attempt to incorporate cold and warm audiences into a single campaign. For example, let’s again say that our overall campaign goal is to maximize conversions. Now imagine we have four ad sets. One ad set is aimed at running ads at cold audiences and the other three are geared toward warm audiences. Naturally, our ad sets associated with warm audiences are going to outperform our ad set aimed at cold audiences. Moving forward, Facebook’s algorithm will distribute the majority of our budget to the ad sets containing warmer audiences. In certain cases, this is ideal. However, there will be instances where we want an equal budget allocated for cold audiences. To accomplish this, build separate campaigns for cold and warm audiences.
Another challenge that marketers encounter when implementing campaign budget optimization is that Facebook’s algorithm is quick to choose a winner in terms of budget allocation. Often times it’s too quick. To ensure all ad sets have equal performance opportunity, we have the ability to set minimum and maximum spends at the ad set level. For example, if our campaign includes three ad sets and a $75 per day budget, we can set $25 minimum daily spends for each of the three ad groups. This ensures a more equal budget distribution at the start of our campaign. It’s important to keep in mind that this should only be done to start a campaign. Once sufficient data is collected, minimums are removed and Facebook’s algorithm does the rest.
Test, Test & Test More!
As with anything new in the social media or digital marketing world, testing is important. Marketers will have the ability to allocate budget at the ad set level until September. Take this opportunity to test campaign budget allocation so when it becomes mandatory, you’re ahead of the competition.
I hope you found this blog useful. If you have any questions about campaign budget optimization for your Facebooks ads, please email me directly at email@example.com. You can also subscribe to be notified each time we update our blog below. Thanks for reading!
Tags: Facebook ads
, facebook ads campaign budget optimization
Monday, August 20th, 2018
Facebook ad benchmarks matter, especially when your goal is business growth. Companies large and small in almost every industry are scrambling for attention on Facebook. How do you know if your ads are working? We’d all love to have what we’d consider high click-through rates (CTRs) and low cost per action (CPA), but how do we know how we’re stacking up? How are our metrics comparing to those of our competition and our industry in general? Wouldn’t it be great to have access to industry averages to measure your results against? Luckily, our friends at WordStream have made that information available to everyone in their Facebook Advertising Benchmark report which includes click-through rate, cost per click (CPC), conversion rate (CVR) & cost per action data across 17 industries. Let’s take a look!
Facebook Ad Benchmarks by Industry in 2018
Click Through Rate (CTR) By Industry
The first Facebook ad benchmark we’ll look at is CTR. Average click-through rate of all industries is 0.90%. You’ll see that the legal industry has the highest average CTR at 1.61% followed closely by retail at 1.59%. The highest ranked may come as a surprise to some. After all, legal has nothing in common with some of the other industries with high CTRs like retail, apparel, beauty or fitness. Consumers in these industries are more apt to be swayed by eye-catching, creative ads. Many of them make impulse purchases. Legal counsel isn’t exactly going to be an impulse buy.
Bringing up the rear of the industry field is employment and job training with the financial industry just slightly ahead. Social media marketers in industries like financial services have it harder than most. People aren’t often in the market for a mortgage home equity loan. This is why it’s so important for these marketers to build sales funnels and lead customers and prospects through the sales process. We’ll cover this important topic in a future blog.
Cost Per Click (CPC) By Industry
So, we know how often our ads should be getting clicked, but how much should it cost? According to Facebook ad benchmarks, the average CPC of all industries together is $1.72. Financials, consumer services & the home improvement industry top the charts in terms of highest cost per click. This makes perfect sense. Marketers in these industry groups are willing to pay more because a conversion can result in a much more significant return on investment. $3.77 per click when we’re talking about attempting to convert on a $200,000 mortgage loan is much easier to swallow than if we paid the same to try to sell a t-shirt for $19.99 (apparel has the lowest CPC).
Conversion Rate (CVR) By Industry
Now let’s talk conversions as they pertain to Facebook ad benchmarks. Remember, at the end of the day, clicks don’t pay the bills, conversions do! The average CVR is 9.21%. Companies in the fitness and education industries enjoy the highest CVRs at 14.29% & 13.58% respectively. Tech and travel & hospitality are our CVR bottom feeders with CVRs under 3%. Often times social media marketers can achieve average to high CTR & CPC metrics but experience a drop off when it comes to conversions. This may be the result of poor ad targeting, bad creative or an over-complicated landing page. It may also be as simple as putting a re-marketing plan in place. Re-marketing is another topic our social media marketing team will cover in the near future.
Cost Per Action (CPA) By Industry
Conversions are great, but we need to know how much they cost. If we’re paying more for a conversion than it’s worth, it’s time to go back to the drawing board. Or invest that money in other platforms where we’re achieving a higher ROI. The average CPA across all industries is $18.68. It’s most expensive for tech companies to sell products and services or obtain leads via Facebook. They pay over $55 per action! Organizations in the educational industry are only paying an average of $7.85. This is why it’s important for our tracking to be on point. It allows us to make decisions based on the return our Facebook ads are providing, not our cost.
Facebook ad benchmarks – the takeaway
To wrap this all up, is it helpful to know what the average Facebooks ad benchmarks are in your industry? Yes, of course. This important information can offer insight as to how well you stack up from a metrics perspective and provide an idea of where you need to improve. Just remember that what’s most important is the return on social media investment. Businesses and organizations are unique, even those competing within the same industry. Set up your tracking and know your numbers. It doesn’t make sense to throw money at any form of advertising if there’s no return. If you’re looking for help improving the performance of your Facebook ads, contact us. We’re always happy to help new clients get on the right track!
Tags: advertising benchmarks
, average click through rate
, average conversion cost
, average conversion rate
, average cost per action
, average cost per click
, effective facebook ads
, facebook ad benchmarks
, facebook ad industry benchmarks
, facebook ad performance
, Facebook ads
, facebook advertising
, facebook advertising benchmarks
, facebook marketing
, high performing facebook ads
, social media marketing