26 Feb 2019
The 5 most important metrics for measuring social media ad success
Measuring the success of a social media ad campaign can be a tricky business. Take a look at the ad analytics page of your brand’s favorite social media platform, and you’ll be treated to a veritable cornucopia of metrics and measurements all clamoring to show you what’s working, what isn’t, and what needs to change in your social media advertising strategy.
Engagements, likes, retweets, shares, clicks, interactions, reach, impressions, cost per action, link clicks, comments…
The list goes on.
The trouble is, with this many metrics in play, it’s too easy to either make the case that a particular ad was effective or to make the case that a particular ad fell completely flat. Sifting through all this performance data for insight into the actual effectiveness of an ad or campaign can be an onerous and confusing endeavor.
Learning exactly what to measure and pay attention to, then separating the performance metric wheat from the performance metric chaff is the only way forward.
Here at Phrasee, where optimizing social media ad performance through AI-driven analysis is what we do, gleaning useful insights from mountains of performance data is not only possible, but can be accomplished in a relatively short amount of time, and at scale.
We realize, however, that not everyone has access to the best AI marketing platform in the business. For those who don’t, paring down the ever-growing list of performance metrics and focusing on the ones that REALLY matter is a much more practical solution.
And, having analyzed and optimized social media ad performance for some of the world’s biggest brands for some time now, we’ve learned exactly which metrics those are (and decided to share them with you!)
Here they are, in no particular order…
1) Click through rate (CTR)
An ad’s click-through rate (CTR) is a measurement of the rate at which that ad’s viewers click on the link included in that ad. It is calculated by the total number of impressions an ad generates divided by the total number of users who click on its associated link.
Engagement metrics like “comments”, “likes”, and “shares” are great for measuring brand impressions and keeping your brand top-of-mind at the point of purchase (which is a very good thing), but clicks-through is where your audience really starts moving along the sales funnel.
Every brand impression is inherently valuable, but if your social media ad is truly effective it should be able to take that impression a step further and generate genuine curiosity and interest in the product or service you are advertising. The click-through rate is the best metric available for tracking this.
2) Cost per lead (CPL)
An ad’s cost per lead (CPL) rate is a measurement of the actual cost of each sales lead generated by a particular ad or campaign. It is calculated by dividing the total cost of an advertisement (including creative and platform ad budget) by the total number of sales leads that ad or campaign generates.
Generating qualified sales leads is (or should be) one of the most important goals of any social media advertisement. Doing so in the most financially efficient way possible simply makes sense. Cost per lead (CPL) is the most effective metric available for measuring how efficiently an ad or campaign makes use of your brand’s advertising dollars to generate the qualified leads your brand craves.
A significant reduction in cost per lead represents a significant improvement in social media ad performance and should be a key priority for any effort to optimize a campaign.
3) Conversion rate
An ad’s conversion rate is a measurement of how often a social media ad or campaign is able to get its viewers to take a desired action (ie; subscribe to a mailing list, make a purchase, visit a website, ad an item to an online shopping cart, etc). It is calculated by dividing the total number of impressions an ad generates by the total number of users who take the desired action associated with the ad (whatever that action may be).
In today’s crowded social media newsfeeds, claiming social media user attention for more than a split-second can be tough. Holding that attention long enough to inspire a user to take action is even tougher still. There is simply no other metric than the conversion rate to measure how effectively an ad is accomplishing this difficult (but certainly not impossible) task.
Any social media advertisement that manages to span the gaping chasm between impressions and meaningful engagement and inspire a decent number of users to take some form of positive action can be considered a smashing success.
4) Relevance Score
An ad’s relevance score is a measurement of the quality of an advertisement and the engagement it generates from your audience. It is measured (and managed) by the social media platform your ad has been placed on. On Facebook, for example, your ad’s relevance score is based on the responses (both positive and negative) of the first 500 users your ad is served to, and a resulting algorithmic calculation of your audience’s expected reaction to your ad moving forward.
Every prominent social media platform has its own form of relevance score to measure ad quality and manage how ads are served to its users. An ad’s relevance score determines two extremely important things:
- The cost per click (CPC) you will be charged for posting the ad on the social media platform you are using
- The frequency at which your ad will be served to the target audience you have identified on the social media platform you are using
Obviously, the relevance score your ad is assigned will have a significant impact on how well your ad will perform on the social media platform you’ve chosen, and learning how to keep your social media ad relevance scores as high as possibly should be a key priority for any brand.
5) Customer Acquisition Cost (CAC)
An ad’s customer acquisition cost (CAC) is a measurement of how successful that ad was at winning new customers for your business. It is calculated by dividing the total cost of an ad or campaign by the total number of new customers your company acquired as a result of that ad or campaign.
As we at Phrasee have said many, many times, if it doesn’t make dollars, it doesn’t make sense. This is one of the founding tenets of everything we do, and it certainly holds true for any social media advertising campaign. If your social media advertising efforts aren’t winning your brand new customers, that’s an indication that something is seriously amiss in your approach.
All the likes, shares, comments, and impressions in the world amount to very little if you aren’t acquiring new customers when all is said and done.
Looking for a way to boost your social media advertising performance? Phrasee is AI that makes your social media advertising perform better so your brand can make more money. Book a demo today!