Ad spending on social media worldwide was projected to reach US$226.00 billion in 2022 (Source: Statisa). However, as businesses increase their ad budgets, so does the ad spend wastage.
According to a report published by Next&Co, digital ad spend wastage on Facebook was around $35 million in Q2 of 2022 in Australia. LinkedIn ad spend wastage reached up to $13 million. That’s millions of dollars down the drain at a time when competition is fiercer, and customer behaviour is ever-changing.
Wasted ad spending is linked to several reasons, such as fraud or poor strategy. But there is another reason that’s often overlooked; a lack of optimisation.
Ad optimisation is the opposite of a set-and-forget practice. It drives you to constantly assess and adjust your campaigns based on data and insight. Ensuring they are successful and every marketing dollar is utilised effectively.
To determine how and which part of your campaign to optimise, you first need to look at various key metrics that measure your campaign’s performance.
Key Metrics To Monitor
It’s easy to get caught up in metrics like impressions, shares and likes. But there’s a reason why these are called “vanity” metrics. They look great on paper but don’t necessarily translate to a successful return on investment (ROI).
Instead of focusing on how many people see or like your ad, measure whether those views and likes lead to conversions and positively impact your bottom line. Here are ten metrics that can provide the best benchmarks for your campaign’s progress:
Unique Outbound Click-Through Rate (CTR)
This metric estimates the percentage of individual users who see and click your ad to go to your landing page. A high CTR indicates the messaging and offers in your ad are so convincing that people can’t wait to learn more about your product or service.
The Ratio of Unique Clicks to Landing Page Views
A click on a call-to-action (CTA) button is just one step. Users may change their minds and not wait for your site to open up. Or they could have accidentally clicked on the ad’s button, so they would go back to the previous page before your website could load.
That’s why it’s crucial to understand how many ads clicks actually convert to website visitors. It provides valuable insight into whether or not you’re targeting the right audience. It can also tell you if your site is experiencing slow page load time. Remember, the longer your load time, the higher the chance you lose a potential customer who would have been interested in visiting your website.
Several factors influence CPC, including the type of social media platform used, the audience, and the quality of your ads.
If your CPC is higher than average, you may want to experiment with different bidding models or target a different audience. Ask yourself: who is viewing or engaging with my social media ads? Is there a particular demographic segment that is more responsive to my ads, or are there specific ad formats more effective at reaching a particular audience?
Bounce rate is a metric that measures the visitor percent who view your landing page and immediately leave but have not visited any other pages on your site. Monitoring this metric helps you identify potential website copy or design issues that may be turning off customers.
If you keep getting a high bounce rate, check if your audience targeting is correct and if you need to adjust. You also need to pay close attention to user experience factors like load times, accessibility options, and the relevance of your landing page content to your ad message.
Pages Per Session And Average Time Per Session
Whilst the bounce rate focuses on people who immediately leave your site, the following metrics focus on those who stay. A session starts when a visitor lands on your site and continues until they exit, or a session timeout occurs (usually if there’s no activity for 30 minutes).
Pages per session refers to the average number of pages users view during a single session on your website. This metric provides insight into your visitors’ interest in your content or products.
On the other hand, average time per session gives you insight into how much time users spend on your site. If your audience doesn’t stay long (eg. spends less than 20 seconds), it could indicate that they’re not finding the solution they’re looking for. Go through the user journey yourself and see if other factors affect user engagement.
Enticing people to your landing page or your other pages isn’t enough. Your ultimate goal should be for them to complete an immediate action; whether it’s purchasing straight from your store or filling out a contact form. Here are several metrics you can use to determine if you’re achieving this goal.
Landing Page View To Add To Cart Ratio/ Landing Page View To Form Submission Ratio
This metric tells how many website visitors landed on your page added products to their shopping cart, or proceeded to submit a contact form.
To keep this ratio high, ensure your landing page is well-designed and easy to use. Include clear and compelling call-to-actions so people can easily navigate and add products to their carts. Most importantly, remember to highlight the benefits of your products or services, and align them to your potential customer’s pain points or aspirations. You may also want to consider A/B testing different versions of your landing page to see which one yields the best results.
Add To Cart And Checkout Ratio
This metric tells how many people who added a product to their cart go to checkout and complete the purchase. If this ratio is low, there may be some issues with your checkout process preventing people from buying what they want.
If you see many drop-offs, think about how you can bring them back to your site. It could be through abandoned cart emails or remarketing ads that are based on user behaviours.
Cost Per Quality Lead (CPQL)
CPQL is what our team monitors if our objective is to generate leads for our clients. Notice that it’s not just cost per lead, but cost per quality lead. You may have many ad and landing page views, and form submissions. But if the people who express interest in your product or service aren’t your ideal customers, you will get little to no return for your work. Tweaking your ad’s targeting or messaging to filter out non-potential customers will help solve this.
ROAS (Return On Ad Spend)
Finally, we have the ROAS. ROAS is the ultimate measurement of your campaign, as it gives you a clear understanding of how much revenue your ad is actually generating for your business. The formula is simple: your ad’s total revenue is divided by your advertising costs.
As you can see, there is no ‘one metric to measure them all.’ To comprehensively understand your campaign, you will need to measure and monitor different metrics together. For example, a high bounce rate on a landing page with a high CPC may be related to a low form submission ratio.
And when you have the complete numbers, what do you do with the insight? You have three paths you can take: Continue, Change or Cease.
To Optimise Or Not To Optimise
Not all ad campaigns need to be optimised. But to avoid ad spend wastage, ask these three questions.
Do I Keep My Campaign Running As Is?
If your social media ads are working as you intend them to, there may be no need for significant changes. Just make sure to regularly keep an eye on your key metrics to ensure the campaign stays successful.
Do I Need To Change Any Elements Of The Campaign?
If your metrics are not meeting your goals, it may be time to change some campaign elements. This could involve altering the targeted audience, image, or ad copy.
Constantly test and experiment whilst monitoring key metrics until you see the numbers you want.
Bonus tip: It’s tempting to constantly optimise and tweak your social media ad campaigns. Remember that over-optimisation can hurt your results, too. It’s important to find the right balance between making necessary adjustments and allowing them time to run effectively before making any drastic changes.
Trust the process and give your ads a chance to perform before jumping into constant optimisation mode.
Do I Stop My Campaign?
Are you not seeing any result or return on investment? Are there better opportunities for your budget elsewhere? If you have exhausted all possible techniques and your social media ad campaigns are still not generating a positive ROI, it may be time to stop them altogether and reevaluate your strategy.
Optimising your ad campaigns is essential to make the best business decisions possible. This involves paying attention to several key metrics at the ad and website levels. By taking these factors into account, you can gain valuable insights into the effectiveness of your campaigns and make any necessary changes to ensure maximum ROI.
Want to learn more about social media and advertising? Check out these articles:
- Marketing Channels: How To Grow Your Business Without Social Media
- The 7 Primary Benefits of Display Advertising
- Using Social Media For Ecommerce
- The Ultimate Guide to Instagram Advertising
- Master Keys to Thrifty Advertising: A Guide to Advertising on a Micro Budget
- 8 Powerful Social Media Marketing Strategies for Your Small Business