Paid Advertising KPIs Key Performance Indicators

Paid Advertising done correctly can help grow your business. Often times, people create a Facebook post and boost it. They often spend $100 dollars on the boosted post and after they realize it didn’t work. Now you have a belief that Paid advertising doesn’t work. You must have a strategy to ensure that your Facebook ads are going to work. Overall, you need to know your business. Here are some things you need to know before you set up any Paid Advertising:

Lifetime value of a customer
How to target on Facebook
Understand the KPI’s

You need to know the lifetime value of your customer for your Paid Advertising strategy

What do I mean by this? Well, you have to take into consideration how long is your customer going to stick around, so I’m going to give you 3 examples:

Paid Advertising for a: Movie Theater

Here are a few assumptions we are going to make about the movie theater customer:

The person will always live next to the movie theatre.
The person goes once a month, from the age of 30-75 that means he will see about 540 movies in their lifetime.
He/she buy their ticket, drink, and popcorn total cost is $30 a time.

With these assumptions, the lifetime value of this customer is $16,200. From an online marketing standpoint, you could spend or should be able to spend $1,000 easily to obtain this customers business.

Every business is different you need to find out these numbers for your business.

Treatment Center

Here are a few assumptions we are going to make about the addiction treatment center

The person will stay about 9 months total
The treatment center makes 20k a month off of this client

The lifetime value of this customer is $180,000.

Again from a Paid advertising standpoint, we could easily spend $20,000 to get this client to come to our treatment center.

Real estate

My assumptions we are going to make about the real estate:

The person will buy 1 house
Cost of the average house is 200k
The agent makes around 6%

The lifetime value of this customer is $12,000

If I was a real estate agent, I could easily spend $1000-$3000 to get this client.

The lifetime value of a customer is important to know!

Know how to target with Paid Advertising

There are a variety of ways that you can target people on Facebook! Here is a list:

Geo-Target
Age-based
Gender-based
language based
Relationship-based
Education based
Work-based
Parents
Life Events
Interest-based (this list is huge)

Fixed Business

If you are a fixed location, one of the best ways that you can run ads is by geo targeting. You can set a radius around your business and try and attract people to come to your store. You can offer the deal of the month, or a 20% off promotion to get more traffic for your business.

Online Store

Your options are endless with targeting. You can test just about everything. If you are running ads, I recommend to keep your audience size around 2,000,000 people when running ads. You don’t want your audience too small. Trust me! You need to let Facebook do its thing!

Know Your Paid Advertising KPI’s For your business

There are a lot of KPI’s (Key Performance Indicators) you can go off, but I’m going to share some of my personal KPI’s:

Things to take into consideration when doing Paid Advertising

Is your email list growing?

The reason why this is important because the money is in your list. These people are loyal fans.

Are sales coming in?

Unfortunately, you can’t track everything when running ads. For example, some on might see an ad on Facebook, get on his wife’s computer, and purchase a ticket by typing in the URL. You can’t track that.

Are people liking, commenting, sharing, clicking your content?

If people are engaging with your content, you are doing something right.

Are you getting reviews?

Reviews are essential for your business. The more reviews, the better. You can never have enough.

The KPI’s that are absolutely essential

Paid Ads for Facebook and Adwords

Cost Per Click

This metric is going to vary depending on the industry that you are in. I have seen with every industry that Facebook works! For your industry, you should be getting dollar clicks on Facebook Ads but, it is hit or miss with Google paid ads.

CTR

Facebook– 1.56% or higher! If it is lower, you need to change copy, messaging, targeting, etc.

Google paid– Your click-through rate should be around 6%. if it isn’t, you might need to change your copy or possibly increase your bids.

Delivery

Facebook only- If your delivery is above 4.0, you need to change out all of your ads. You need to do this because your audience has seen your ads too much.

Conversion Rate

Facebook & Google Paid- If your ads are converting around 4-6%, you are doing a great job on feed ads and search ads. Other ads placements around 1-2% should be your goal.

Cost per conversion

Cold traffic- If you are running ads to new people, you should be happy if you can break even on your first sale for e-commerce. If it is a monthly subscription, you should be satisfied if you are breaking even in the first month!

Re-marketing- For re-marketing ads you should be making money off of your ads. At this point, you should be content with a small profit.

Quality Score/ Relevant Score

Facebook- You need to have a relevant score of 6 or greater. If you don’t, then change out the ad and go back to testing.

Google Paid- If your quality score isn’t above a 6 then, you need to either raise your ad spend or you need to change out the ad copy.

View Rate

On YouTube and Facebook if you average view rate isn’t above 10% then go back to the drawing board.

Landing Pages

Page Duration

On any page, if your page duration isn’t above one minute. You could have 2 problems.

Your ad isn’t relevant too your landing page.
Your landing page doesn’t have the info they are looking for.

Bounce Rate

Your bounce rate shouldn’t be higher than 75%.

Bounce Rate means that people are looking at your page and leaving. The lower the bounce rate means they are looking at multiple pages on your website, and staying on your website.

Conversion Rate

Your conversion rate should have a goal of 4-6%. If you aren’t converting at this rate, you need to change everything across the board. If you are higher than this, you are crushing it!