How to Maximize Facebook Advertising ROI

Now that we’ve covered the basics of how advertising on Facebook works, let’s review how to effectively managing bids that maximize CTRs, and of course, optimize for actual return on ad spend (ROAS).

Since Facebook is a real-time market, the CPC you need can vary significantly as other bidders place, adjust, and remove ads. An ad that was generating great volume just a few hours ago can fall stagnant as the market heats up.

But CPC is just piece of the puzzle, the other challenge is keeping your CTR up. As your ad collects more and more impressions it gradually grows stale, and its CTR drops. Thus gaining and maintaining a high CTR means constantly deploying, split-testing, and refreshing the creative (images, titles, bodies) in your ads to keep them fresh and relevant.

You’ll find that there’s no one “best” ad – an effective ad for females in California who like gardening will hardly work for males in New York that are interested in sports cars. As such, a well-run campaign (creatively at least) tests multiple ad elements against each targeting segment, pairing each ad with its most appropriate audience – amounting to a creatively optimized campaign.

The question then becomes, what are you optimizing to? Everyone advertising on Facebook has a clear campaign objective – some hope to sell virtual sheep in a social game, others hope to sell designer sunglasses – the sad reality is, very few advertisers track conversion from click to purchase. That is to say, advertisers and services will optimize campaigns for cheapest CPC, then look in aggregate at purchase rates across the campaign – but not actually track which ads are driving the purchases!

Posted on August 23, 2011, in Insights & Resources and tagged , . Bookmark the permalink. Leave a comment.

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