You are listening to My Freedom Grove podcast with Gretchen Hernandez, episode 194.

Welcome to My Freedom Grove Podcast, your calm space for practical help to get your dream business up and running while being authentically you and taking care of your mental health. I'm your host, Gretchen Hernandez. I'm so glad you're here!

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Hi there my Strong Friends. I have an exciting announcement to share with you. The Platform & Profit online Summit is now open for enrollment!  This is a free 3 day online event May 1st-3rd.

The objective of this summit is to help you build your platform and position yourself as the “go-to” master of your craft or industry.  With an effectively positioned platform you’ll attract attention, increase desire in your potential clients, and create more partnership opportunities.  All of that helps you sell more of your products and services and make a bigger impact.

I love partnering with other value aligned businesses.  When we partner we increase our reach.  We all come together, share our unique expertise and perspective. This helps us change even more lives.

In this summit, you will have access to over 30 speakers that are 6, 7 & 8 figure earners.  Each speaker teaches something unique that will help you grow your business.

Not only is this a great opportunity to learn, it’s also a great opportunity to benchmark.  Watch how we partner together.  Because this can be something you do too.  Online and in person summits open the doors to new audiences and opportunities for you.

Registration to the Platform & Profit summit is free.  I’ll put the registration link in the show notes for you.  Recordings will be available.

When you come to the Platform & Profit summit, you’ll get to participate in my training “Using $4 Facebook Ads to Validate your Product and Sales Funnel Offers before you build them”.  You’ll have the opportunity to ask me questions live and get your questions answered instantly.  Go to the show notes now to click the registration link.

This month’s podcast series on Facebook ads is leading up to that training.  I want to set you up for success.

In the last two episodes I gave you an introduction to the different types of Facebook Ads and the 4 magical components to make the ad work.  Now, we’re going to talk about Ad metrics.

I know the main metric you want to see is the # of sales.  That’s the main reason you’re doing ads in the first place, right?

Why would you care about any other metric?

Simply put - ads cost money.  If you’re not paying attention to your metrics, you may end up getting a negative return or your investment, or one that isn’t as good as other options.

Top Level Metrics: ROI & ROAS

The first 2 metrics to consider are Return on Investment and Return on Ad Spend.

Return on Investment is universal to anything you do in your business.  Your investment includes time and money.  The equation uses dollars as the initial unit.  (Amount of Revenue $ / Amount of Investment $) *100 = ROI percent

In the world of business and advertising, we have the time & money  investment to create all of the funnel pieces plus the actual cost of advertising.  Those combined will be evaluated for ROI.  

Since investment includes time and money, you can use a standard hourly rate to convert time to money.

You want the ROI to always be >100%.  Or in easier terms, if you put in $1, you get back at least $1.  In fact $1 return is just hitting a breakeven point.  You need a much bigger return to have a sustainable business.

You can advertise your business and funnel in different ways.  It’s helpful to have a metric that is evaluating the specific ways you try.

Paid Advertising has the ROAS metric.  ROAS = Return on Ad Spend.

For every $1 you spend on ads, do you bring in >$1 in revenue?  A 1x ROAS means $1 in, $1 out.  A ROAs of 2x means $1 in, $2 out.  The better your ad performs with your working funnel the better  your ROAs.  Also, any improvements to your sales funnel pieces will also increase your ROAS.  The ad alone doesn’t sell your product/service.  It’s the full system of ad plus sales funnel pieces.

ROAS can help you compare different types of advertising to the same funnel.  This will let you pick the best advertising.

For Example, if your Facebook Ad ROAs is 3x and you sponsor an event that gives a 10x ROAs you’d have data to help you decide how to invest your marketing money.

Now let's get into the granular level of Facebook Ad metrics specifically.

The job of a Facebook Ad is to drive traffic to the next step of your Sales Funnel.

The objective is to send the highest amount of qualified traffic for the lowest cost.

The specific metrics to look at for this include:

Impressions

Frequency

Click Through Rate

Cost Per Click

Cost Per Result

Click Through Rate (All)

Impressions 

Impressions refers to the number of times your ad appeared in front of someone.  This is not a 1:1 metric.  It’s  possible that 1 person saw your ad more than one time.  Impressions will be the largest metric.  Your ad budget is geared toward getting you the largest number of impressions possible. 

You may discover that some ads, with the exact same budget will have significantly different numbers of impressions.  This is due to the popularity of the ad space at the time.

You know how Super bowl ads can cost millions of dollars?  It’s just a Sunday at 4pm.  But, it’s not like any Sunday at 4pm.  A premium is charged for that special day because the demand is really high.

Facebook operates the same way.  If there’s a lot of demand, your ad dollar will get you fewer impressions.

There are plenty of regular old days where the demand is at normal levels, so don’t worry.

Frequency

This is the average number of times your ad was shown to the same person.  If you are running an Awareness campaign you are aiming to have this number be high.  Your objective is to get them to remember your brand or product.

For ads where you are trying to get people to do an action, you’ll want this number to be below 3, preferably below 2.  This helps stretch your budget to show your ad to more people that are ready to take action.

Let’s demo this with some quick math.

If you are purchasing 100 impressions.

Do you want to show your ad to 25 people 4 times?

Or do you want to show your ad to 50 people 2 times?

The ones that take quick action are more likely to become a paid client.

Click Through Rate

This refers to the percentage of people that saw the ad and clicked on the link.  You want this number to be a bare minimum of 1%.  If your ad is not at 1%, you need to experiment with the 4 magic components mentioned in ep # 193.

The higher the Click through Rate, the better.  It’s worth some time to improve this number.  It will reduce your overall ad costs down the line. 

Cost per Click

This metric takes your total ad spend divided by the number of total clicks to the linked page.

If you’re running Traffic Ads <$0.50 CPC is a good target.  If you’re trying to get leads or purchases, the CPC will be a personal decision.  You’ll base your maximum CPC on your product/service price and the conversion rates of the rest of your funnel. 

It’s possible to have a high CPC like $50 and still be profitable.  Especially if you have a product/service that costs thousands of dollars.

If you have a lower cost product/service and/or your conversion rates are low, you’ll need the CPC to be really low to stay profitable.

It’s worth some effort to experiment with the 4 magic components to get your CTR higher and your CPC lower.

Cost Per Result

If you are running a Conversion campaign you told Facebook what type of result you want.  It could be a lead, sale or something else.

Facebook will use it’s pixel to detect when someone clicked from your ad to your page and took the action you wanted.

The Pixel sends that as a result back to Ad Manager.  The Cost Per Result is calculated with the total ad spend to date divided by the number of results.

Your target and maximum cost per result is a personal decision.  One person may think that $25 per registered lead is affordable and another will not.  It depends on the likelihood of a purchase, the amount of the purchase.  Additionally, if a business has their whole product ladder set up well, 1 lead could eventually purchase several products from them.  If the lifetime value of that lead is really high, it might make perfect sense to have a very high lead cost.

I know of one coach that was willing to pay $300 for a lead to sell her $300/mo membership.  At first, that doesn’t make any sense.  But, her clients would stay in her membership for years and purchase her next set of products/services that were above $25k each.  In the grand scheme of things, it was ok that she had a 1x ROAS on the 1st month of membership.  After that, everything was pure profit.

If your Cost per Result is higher than your affordable target, you may wonder if your ad is working.  The answer is yes because you are getting results.  This is where it’s a question of Optimization.  The page where the result happens can be optimized to get more results with the same amount of traffic.  If you do this, you haven’t changed anything about the ad, but you will have the benefit of a lower Cost per Result of the ad.

You may also choose to optimize your ad more.  If you experiment with the 4 magical components you may lower your cost per click and increase your click through rate. This will result in more traffic for the same cost.  More traffic to the page will result in higher results.  Since the cost is the same, your Cost per Result will decrease.

Click Through Rate (All)

This metric provides additional information.  I wouldn’t use this as a primary indicator to determine if your ad is working.  Instead, this is letting you know if people are reading the copy of your ad.

Some people will see the creative picture or video of your ad and the headline and immediately click.  Others will have their attention captured and want to read the copy you wrote.  Your copy can be very compelling to get them to click.

This metric is read a little differently than the others.  Instead of just looking at the number, you will do a comparison.  You will compare the Click Through Rate to the Click Through Rate (All).  Both columns have a percentage displayed.  The CTR will be lower than the CTR (all) rate.  If the CTR(all) rate is at least 1% higher than the CTR rate, you know that people are reading your copy.

This is especially helpful information if your creative is an attention stopper.  In last week’s episode I mentioned an example.  The creative is of a woman with fushia hair with her tongue covered in rainbow sprinkles.  Are people clicking on the link because of the fun picture?  Or did the picture catch their attention, then they read the copy and wanted to click because of the words.

Comparing the CTR to the CTR(All) rate will tell them the difference.

Breakdown Metrics

Breakdown Metrics are a wonderful feature of the Meta Ads Manager.  With this drop down menu you can slice and dice your data to get more insights.

All of the same metrics are available for each slice of your data.  Impressions, Frequency, CTR, CPC, Cost per Result and CTR(All) are there.

Your data represents a set of people from many parts of the world, different genders and ages, on different platforms and engaging with Facebook on different days and times.

The breakdown feature displays data in all the subsets.  For example “Placement”.  Placement refers to where the ad was displayed.  This can be in feeds, reels, side panel, in messenger and so many more.  I believe there are at least 18 places the ad can be shown.

The breakdown will show you all 18 places.  For each place you will see the metrics.  It will become obvious which places are not giving results.  Out of 18, I usually have 4-5 places give results.  The remainder gave nothing, it just cost money.

This helps me deselect those places for the next round of running my ad.  It reallocates my ad money to the places that do get results.  

Working vs. Optimized Summary

One last thing I want to point out.  Metrics can be used to determine if something is working.  They can also be used for Optimizing.

For the first rounds of FB ads testing, you’ll use the metrics to determine if the ad is working.  You’ll make adjustments to the magical 4 components to hit the metric targets of a working ad.

If you already have a working funnel with acceptable conversion rates, great.  You’ll just verify the ad to the funnel works all the way through.  As long as you are happy with the conversion rates, cost per result and you have at least a 2x ROAS, you’re done.  Just keep running the ad.  Increase the ad spend to get more revenue.

If you don’t have a working funnel yet, you’ll use FB ads to drive traffic to the next step of your funnel.  You’ll use the metrics from the ad and the funnel piece to experiment and make data driven decisions.  Keep the ad costs as low as you can.  At this point, your goal is to optimize your funnel, not necessarily get revenue.

Once you complete all of your optimization tests and your funnel is converting well, you’re done.  Just keep running the ad to make revenue.  Increase the ad spend to get more revenue.

One of the things you may have noticed me mention is your Sales Funnel.  You want to have that ready before you invest too much into Facebook Ads.  I see people wanting to jump into Facebook Ads before they are ready.  Some of that comes from scarcity.  They don’t have enough clients, so they immediately think of paid ads.  Throw money at the problem. 

Facebook ads are a great way to create clients.  It works best if you have a Sales Funnel and your Product/Service already created.  I help you design and build both of those. 

Both a Product/Service and Sales Funnel are also important if you want to have success collaborating with other Entrepreneurs.

During the Platform and Profit Summit, you’re going to see the power of collaboration.  Over 30 speakers came together to help people.  All of us have our products/services and sales funnels created.  Instead of using Facebook Ads, we’re using a Summit to get traffic.  Instead of individual webinars, we are all presenting within this great 3 day event.

I’d love to see you be part of impactful events like this summit.  If you want help creating your products/services or sales funnels, I invite you to sign up for a free consultation.

I also want to invite you to come to the Platform and Profit Summit.  This is a free 3 day event with entrepreneurs running their businesses at the 6, 7 and 8 figure revenue brackets.  Everything taught is going to be action oriented.  You will walk away with your action plan for your profitable business.

Register today by clicking on the Platform and Profit Summit link.  The Link is in the show notes.

My friends, data is your friend.  Having your business house in order is also your friend.  You can make your business work!  Cheers to your success!  I’ll talk with you next week.  Bye - Bye

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