How to Calculate the ROI of Facebook Ads

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In this article, you will learn how to measure and analyze the social network ROI for your Facebook ads so that you can evaluate their value to your business and see which ads to show again..

ROI has its roots in financing a business. Companies use ROI to calculate profits in dollars and cents from investments in dollars and cents.
On Facebook, ROI is more than just reach or experience. This can be measured in several ways. For example, if you use advertising on Facebook, you can see direct returns generated by advertising clicks. If you do not use advertising, you can still see returns in the form of leads, customer reviews, and referral traffic.

When you spend money on an advertising campaign to increase long-term interaction with your audience, rather than immediate sales, the results can be difficult to quantify.

In this article, you'll learn how to measure and analyze the social network ROI for your Facebook ads so that you can evaluate their value to your business and see which ads are worth showing again.

When you create an advertising campaign on Facebook, start by choosing a goal, which is also an action. Goals range from clicks on a website to uploading applications to Facebook likes, as well as other types of interaction.

According to Vianinja, 66% of organizations do not believe that their social strategy is related to business results. By setting goals for social networks, you can determine how to link social strategies with your business results and what you need to track to measure your return on investment.

Some goals you can set for your social media campaigns are:

  • Build brand awareness
  • Drive traffic
  • Drive conversions
  • Improve customer retention
  • Let’s take a look at how you can measure these.
  • facebook ads drive traffic ad-objectives roi tips 2019

    Then use tools such as Facebook Insights and Google Analytics to track these actions and evaluate their social impact.

    How to Measure Social Media ROI

    ROI = (return – investment) / investment

    This simple formula consists of only two parts: return and investment. Here's how to define each of the two values ​​in social networks.

    How to Track Facebook ROI

    Facebook Page Insights lets you see which posts get the most clicks. The easiest way to track referral traffic from Facebook to your website is through Google Analytics. Even if you are new to Google Analytics, this is easy, as traffic from social networks is automatically tracked using the Social Reports tool.

    facebook ads Google Analytics-Social media tips 2019

    To find out whether you are getting a positive or negative ROI in social media campaigns, you also need to measure how much you spend. However, these expenses do not include money. This is what should be included in your ROI calculations.

    Time: your time is valuable. Regardless of whether you are an individual business or you have a team working with social networks, add time spent on a specific marketing campaign on social networks during a certain period of time.

    Content: Did you get a landing page written by a professional copywriter? Or perhaps you updated the status on the side. These costs are easy to overlook, but they certainly count. If you write such a copy yourself, it will take into account your time costs.

    Advertising costs. If you use an advertised tweet, an ad on Facebook, or a higher post on Facebook, add this cost as well. It is quite easy to track when you set your advertising budget.

    Once you have calculated your expenses, you can calculate the profitability of social network investments for each campaign using the following simple formula:

    (Earnings – Costs) x 100 / Costs

    For example, if you spent $3,000 on Facebook Ads in the last 30 days, and generated $4,100 in sales, then the ROI percentage formula is $4,100 – $3,000 = $1,100 divided by $3,000 = 36.67 percent.

    It is important to establish a targeted return on investment and make sure that the generated return on investment, even if it is positive, is not a waste of your time.

    Social Media ROI Tools

    Now that you know the theory of measuring social profitability, you need the right tools to actually do it.

    Google Analytics: Google Analytics analyzes ROI using ROAS . Therefore, although the name of the GA report is the “ROI Analysis” report, in fact these are the calculations and ROAS reports. Track site traffic, conversions and registration in social networks.

    Facebook Pixel: A snippet of code for your website that allows you to track conversions from advertising to Facebook - from everything that leads to sales. You can use the pixel feature on Facebook’s own advertising platform or with social media optimization and targeting tools.

    Tips to increase your return on marketing investment on Facebook

    Target the right audience.

    If you are creating one wide Split testing (also known as A / B testing) advertising campaign on Facebook and expect to reach every member of your target audience, this will not work. All your customers have different needs, and they are also at different stages of the customer’s journey,therefore, you must create advertisements for each target audience you are trying to reach.

    facebook ads Demographics Based Targeting roi tips 2019

    You must develop a strategy before even thinking about optimizing your ads on Facebook — a strategy based on a deep understanding of your target audience: what they like and what they are likely to respond to.

    Facebook Retargeting

    Facebook Retargeting is a cookie that you add to your website that allows you to track when a user leaves your website, follow it on Facebook and other places on the Internet, and show them targeted ads that convince them to return to your website and buy. By rebuilding abandoned visitors with retargeting, you can significantly increase your return on investment.

    facebook ads drive traffic retargeting roi tips 2019

    Split test

    Split testing (also known as A / B testing) Split testing is very important, especially when running a campaign on Facebook. You will never know it unless you run them both. The advice is to create multiple versions of your ad and show them for the required amount of time. Once you have enough data for all such ads, start comparing the results you get from them. However, make sure that you are targeting the same audience groups, otherwise, you cannot determine which ad works best and why.

    facebook ads Placement-AB split-test a/b test roi tips 2019

    Optimize Ads at the Right Time

    Page managers sometimes panic when ads are shown, but results are not provided for the first 24 hours. Many companies have a daily advertising budget of $ 5 or $ 10, and they quickly turn off advertising that is not convertible or is being converted too expensive.
    They forget that the data they have is not perfect. Most of the statistics they use to make advertising decisions are incomplete and insignificant because the ads have not reached a sufficiently large audience.

    facebook ads data traffic Scheduling roi tips 2019

    You can’t and shouldn’t start any social media campaigns without having a clear goal in mind. Goals will help you establish what return on investment looks like for a given campaign.

    Tracking social ROI on your Facebook ad campaigns is just as important as measuring financial ROI, especially since the likes that you’re getting on your page can ultimately convert to paying customers.

    Team Vianinja appreciates client's valuable time and avoid sharing random packages as rate sheet when clients reach us. We understand every business is different and has custom requirements. We don't believe in:

    ❎ Offering random packages to our client
    ❎ Ask for budget and only work when they are ready to pay X amount
    ❎ Give over-night results using black hat techniques
    ❎ Working without strong foundation/ base/ complete analysis of project
    ❎ Fake promises of results

    Experts at Vianinja always listen to all your requirements closely while doing Project Analysis Call. We appreciate client's time and make sure the 15 min time is worth a ROI for your business.
    The speciality of FREE - Successful Project Analysis Call is:
    ☑️ 1-on-1 session
    ☑️ Understand priority of work
    ☑️ Analyze the available budget
    ☑️ Build customize solution
    ☑️ Deliver 300% increase in ROI

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Madhuranjan Kumar

Madhuranjan Kumar
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