calculating facebook ads roi

Calculating your Facebook Ads ROI For Ecommerce with ClicData

Facebook is the largest social media site globally, making Facebook Ads a powerful marketing tool for your products. With almost 3 billion registered users, Facebook lets you interact with customers, build your brand identity, run ads, and increase your reach. 

As an intuitive and easy-to-use platform, Facebook readily meets the needs of small firms and big corporations, including micro-targeting the audience. Besides running highly targeted campaigns, Facebook enables you to track engagement in form of comments, likes, shares, and reactions. 

While such metrics are great, they’re not a reliable measure of ROI if you have sales objectives. Engagement isn’t an accurate measure of ROI, a complicated metric that pools data from various sources. To calculate ROI effectively, you need a solution like ClicData to combine your Facebook Ads and eCommerce website data. 

Dig in as we detail how ClicData can help you calculate and bolster your Facebook Ads ROI.

Define Marketing Roi

Marketing ROI is a method of measuring profit and revenue growth for a specific marketing campaign. Calculating your return on marketing investment lets you evaluate the impact of your marketing efforts. You can measure the extent to which your marketing campaigns contribute to revenue growth. 

At the very least, marketing ROI justifies your Facebook marketing spend and budget for your future and ongoing campaigns. It allows you to measure the success of each marketing campaign and establish baselines to help you calculate ecommerce ROI as a whole.

Calculate Your Facebook Ads Roi In 4 Steps

Calculating your Facebook Ads ROI lets you determine what’s working and what’s not so you can focus on the campaigns that can potentially drive more sales. 

Step 1: Set Smart Objectives For Your Campaigns

You must set intelligent goals to measure your ROI objectively – simply said, you can only measure what is known. Facebook lets you focus on up to 11 objectives; hence you must set a specific goal before launching a campaign. 

Each marketing campaign uses different metrics to measure success, so it’s best to define the data you need to collect from the outset.

Step 2: Collect Data

You must collect data to calculate your Facebook Ads ROI, and that calls for data from Facebook Ads and your Ecommerce website

Collect Data From Facebook Ads

Naturally, you should prioritize data directly associated with your campaign’s objectives. Some of the critical metrics when running Facebook ads include: 

  • Clickthroughrate: It’s the number of people who click on your ads and head over to your eCommerce store. A click-through rate of 1% or higher is desirable as it indicates your ads are resonating with the target audience. 
  • Cost per Click (CPC): It’s the average amount you spend whenever someone clicks on your ad. It’s a direct measure of your customer acquisition cost. 
  • Cost per Purchase (CPP): It’s the average cost of driving a purchase on your website. This metric measures your ads’ efficiency in driving purchases. 
  • Ad Relevance Diagnostics: Uses three metrics to rank ad performance based on user interaction after 500 impressions. It measures the relevancy between your ads and the target audience. 
  • Return on Ad Spend (ROAS): Compares your ad spend and campaign earnings. It lets you track if your ad campaigns are making or losing money. 
  • Cost Per Mille (CPM): This metric measures the cost for every 1,000 impressions. It’s a popular measure of campaign success and compares different campaigns. 

ClicData offers native Facebook Ads connectors to help you dig deep into your data and monitor performance from a single dashboard. With ClicData, you get to automate and centralize all your marketing campaign data for quick access. 

ClicData business intelligence platform allows you to merge your sales and marketing data, making it easy to calculate ROI with a single click. ClicData is specially crafted to automate your Facebook marketing efforts to save you time, effort, and resources. 

Collect Data From Your Ecommerce Website

Tracking the correct KPI’s for your ecommerce website is critical to measuring the success of your Facebook campaigns. You need reliable revenue results from each campaign to determine its performance. Some of the essential KPIs in the eCommerce scene include: 

Revenue KPIs

These KPIs determine a campaign’s effectiveness by evaluating the financial results to let you determine the monetary returns on your ad spend. Some of the popular revenue KPIs include: 

  • Transactional revenue 
  • Return on Ad Spend
  • Marketing efficiency ratio
  • Ad spend & revenue by channel

Advertising KPIs

These are a series of KPIs to help you refine your paid customer acquisition efforts and bolster your profit margins. Some famous metrics include: 

  • Blended customer acquisition cost
  • Average order value
  • Lifetime value 
  • Cash multiplier
  • New Vs returning customers
  • Organic Vs paid customers 

Conversion KPIs

Measuring the rate at which customers buy from your website offers insights into your sales funnels, ad targeting, and overall marketing campaign is vital for your success. It lets you optimize your campaigns for the best results. Popular conversion metrics include:

  • Website conversion rates
  • Campaign conversion rate
  • Cost per Add to Cart
  • Cost per unique checkout initiated
  • Cost per purchase 

Creative KPIs 

These KPIs let you assess your ads for creative efficiency to help you optimize your conversion rates. Creative elements include wording, imagery, fonts, colors, size, CTA buttons, and placement. Popular creative KPIs include: 

  • Click-through rate
  • 3-second view through rate
  • Average watch time

ClicData carries a diverse range of connectors for eCommerce sites to help you centralize and automate your operations. ClicData connectors work on all top eCommerce platforms – Shopify, Magento, & WooCommerce and they include: 

  • Facebook
  • Facebook Ads
  • Google Ads
  • Google Analytics 
  • Google Drive
  • FreshBooks
  • Bing Ads
  • Basecamp
  • Amazon

Step 3: Build Your Marketing Roi Kpi With Clicdata

Combining Facebook Ads data with the Ecommerce data enables you to calculate the precise marketing ROI. Unfortunately, both platforms generate a considerable amount of data which might prove overwhelming. 

Luckily, dedicated platforms such as ClicData allow you to cut through the noise and zero in on the most valuable information.

With ClicData, you can comfortably manage big data and blend it to uncover helpful insights about your marketing campaigns. For instance, integrating data from various platforms can help you determine:

  • The number of new customers in each campaign
  • The average order value per customer
  • Your cost of customer acquisition 

Such metrics offer deeper insights into your campaign to help you optimize performance and increase conversion. Harnessing the power of big data and data blending capabilities of ClicData provides you with a granular way to calculate ROI. It also reduces your reliance on vanity metrics such as likes, share, and engagement. 

Step 4: Visualize Data With Dashboards

Visualization is critical for successfully applying big data and data blending to your marketing campaigns. ClicData curates and blends your data and presents the results in a clear and comprehensive dashboard. 

The platform provides a custom dashboard for every KPI in your marketing campaign. A custom dashboard presents live data with all the critical aspects you need to adjust and optimize your campaigns for best results. 

Besides letting you take in the results at a glance, ClicData allows team collaboration. You can share your dashboards with internal and external users. Each party in your team gets a live link to access the data in real-time.   

Social Media Dashboard

Chances are that you run advertising on several social media platforms. Manually tracking the results from each platform can be taxing and overwhelming. ClicData comes with a dedicated social media dashboard for all your marketing campaigns

The dashboard offers an overview of your social media marketing efforts while comparing your Facebook ads performance with other platforms. With a click of a button, you can see how your ads on Instagram, TikTok, and LinkedIn stack up against each other. If running a nation or international campaign, you can blend the data from different regions into one comprehensive report. 

Marketing Dashboards

A comprehensive digital marketing campaign extends beyond Facebook and other social media ads. You’re probably running a multichannel campaign that spans SEO, PPC, and email. The marketing dashboard on the ClicData platform brings all your marketing initiatives under one roof. 

Now you can combine them on this dashboard, and you can monitor progress, perform detailed analytics, and calculate the ROI for each campaign. Within the marketing dashboard, you can dive deeper into your customer profile. 

You can match your revenue generation to granular features such as gender, location, age, and online behavior. Having access to all your marketing campaign data eliminates tunnel vision when running online marketing campaigns. 

Adjust Your Campaign

Automation is at the heart of every successful online marketing campaign, and ClicData is particularly useful in this regard. Once you’ve defined your metrics and customized your dashboard, the platform keeps you abreast of your campaign performance. 

With ClicData, you can set up alerts and receive notifications whenever your campaign hits a significant milestone. For instance, the platform can notify you if the ad spend exceeds the budget during a set period. Or if a drive fails to meet the sales objective. Timely notifications allow you to recalibrate your campaigns to minimize losses and improve performance. Luckily, you can dig through your dashboard to troubleshoot an underperforming campaign. 

E.g., receive a notification when expenses exceed the budget given a specific period or if the sales from a given campaign don’t meet objectives

Is My Facebook Ads Campaign Worth It?

The ultimate goal of running a Facebook ads campaign is to grow your sales and generate revenue. Therefore, calculating the ROI on your marketing efforts is the most reliable way to gauge success. Your business will only grow and thrive if you’re making more money than you spend. 

As a rule of thumb, the ROI on your Facebook ads campaign must be greater than your ad spending and the human resources necessary to run the campaigns. Generally, there are two typical results when running Facebook Ads campaigns: 

  • Your Facebook Ads Campaign has a good ROI

Naturally, you’d want to replicate your winning campaigns and apply them to your other product. Or you can increase the budget allocation and scale your operations. 

Luckily, ClicData can help you drill down to the factors responsible for your runaway success so you can achieve similar results each time. 

  • Your Facebook Ads campaign has a bad ROI

With ClicData, you can latch on to a losing campaign before it runs through the budget and bleeds you dry. The platform can help you run detailed analytics to identify the shortcomings and take corrective measures. 

You can contrast it against the better performers and get to the bottom of the matter.

Thanks to ClicData’s analytical capabilities, you can take a deep dive into the campaign and compare target audience, types of CTA, media, length of advert, running time, and more.  

Conclusion

Running Facebook ads can increase your sales and grow your revenue, but only if you focus on the right metrics. 

Focusing on the wrong metrics can make it impossible to calculate your ROI when running Facebook ads. For the best results, you need to focus on tangible metrics such as revenue, conversions, sales, not vain metrics such as likes and shares. 

ClicData simplifies the process of calculating your Facebook ads ROI while giving you deep insights into each marketing campaign.

Connect your Facebook ads and ClicData today!

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