Is there a reliable way to estimate ROI for Facebook and Google ads?

7 replies
Both of these represent a substantial investment if you want to reach more than a tiny number of prospects, so I don't see how anyone could use them without confidence in their ROI.

Heard of any good methods?
#ads #estimate #facebook #google #reliable #roi
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  • Profile picture of the author echelon
    For Facebook ads, one thing I have done to track sales of my own product was to setup the conversion tracking inside Facebook ad manager.

    Regarding the promotion of CPA offers with Facebook ads, I have made use of dedicated subids for the landing pages links located inside the Facebook ads. So the link of an ad goes to a landing page or optin page that links to an offer with a specific subid. That way, I could connect a specific ad to the earnings generated.
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    • Originally Posted by echelon View Post

      For Facebook ads, one thing I have done to track sales of my own product was to setup the conversion tracking inside Facebook ad manager.

      Regarding the promotion of CPA offers with Facebook ads, I have made use of dedicated subids for the landing pages links located inside the Facebook ads. So the link of an ad goes to a landing page or optin page that links to an offer with a specific subid. That way, I could connect a specific ad to the earnings generated.
      I agree that good use of analytics in both Facebook ads and AdWords is essential to a successful promotion.

      What I was getting at, however, was whether there was any good way to estimate the revenue a potential ad can realistically generate BEFORE actually running it. Or is the only way to make a small purchase before committing to a large one?
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  • Profile picture of the author DIABL0
    Originally Posted by Hopeless Bromantic View Post

    Both of these represent a substantial investment if you want to reach more than a tiny number of prospects, so I don't see how anyone could use them without confidence in their ROI.

    Heard of any good methods?
    There is simply no way to know for sure how an offer will perform until you test it.
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  • Profile picture of the author ChrisBa
    Originally Posted by Hopeless Bromantic View Post

    Both of these represent a substantial investment if you want to reach more than a tiny number of prospects, so I don't see how anyone could use them without confidence in their ROI.

    Heard of any good methods?
    Unfortunately there is no real way to properly estimate roi, it's all trial and error.
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  • Profile picture of the author atia ferdous
    nothing will move your social media marketing campaign further down the field than a strategy informed by solid numbers, and no single barometer tells you more than ROI. Why? Because you not only want to know whether your Facebook marketing campaign is generating buzz and drawing paying customers -- you want to know whether it's worth the effort you put into it.

    But how do you get tangible social media ROI statistics when you're dealing with such fuzzy concepts as brand awareness, reputation and likes? Believe it or not, measuring social media ROI is possible. Here are three reliable ways to do it:

    1. Reach

    ROI has two basic components: return and investment. First, you need to define the "return" part. If your objective is to increase brand awareness and expand your reach, then a reasonable goal may be adding 100 new Facebook followers within one month. Or perhaps you're on a quest to improve your reputation. In that case, you may want to generate 10% more likes per post over the course of two months.


    Collecting such vanity metrics is easy with Facebook Insights, a free tool that tracks all your basic social media stats, including:

    • New followers

    • Active followers

    • Likes

    • Shares

    • Comments

    Next, you need to measure how the return stacks up against the investment. That means translating soft metrics into dollars. One option is to figure out your cost per like. Let's say you spent $5 on a Facebook advertising campaign and it generates 150 likes (Facebook Insights tells you how many likes come from paid ads as opposed to organic). This gives you roughly $.03 per like ($5 divided by 150).

    Pretty good. Of course, that figure doesn't include the time spent creating the ad or the resources used to produce it. Factor all of that in and you may be looking at a much lower ROI, particularly if you promoted a video ad.
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  • Profile picture of the author DivineClaw
    When it comes to tracking Facebook Likes and shares, it's easy to monitor these metrics through Facebook's Page Insights. Here you'll be able to measure your reach, engagement--including post clicks, Likes, comments and shares--and ad spend (if applicable) for each post you've published.
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  • Profile picture of the author mostCPA
    When you get right down to it, advertising on Facebook or Adwords isn't about cost--it's about profitability. That being said, for most businesses, running a Facebook,Adwords campaign makes a ton of sense. You can get high-quality clicks, conversions and sales without paying through the nose for them.

    Google AdWords
    Pros
    -----------------
    • Detailed measuring tool makes your campaign easy to track
    • Large potential audience
    • Immediate influx of traffic
    • Complete control over your daily budget and maximum cost per click
    • Instant return on investment (You can easily define a cost per conversion and understand at what point your profit is made)
    • Targeting options, including regions, time of day, days of the week, and specific websites (if using Display Network)
    • Different advertising options, including Display Network, Search Network, and Remarketing
    • Targeting those who already have an interest and, therefore, are more likely to convert into sales

    Cons
    -----------------
    • If set up and managed incorrectly, it can be extremely costly
    • Setup and management can be very time consuming
    • Limited space within your ad (Three lines of text when you are using Search only)
    • Unless you use other forms of Google advertising, such as Google Shopping and YouTube Advertising, you cannot include images or videos to sell products and services
    • Depending on your industry, the cost per click (CPC) can be substantial (For example, one client paid between $9.90 and $22.84 per click)
    • Depending on your target market, the majority of the large potential audience can turn out to be irrelevant


    Facebook Advertising
    Pros
    -----------------
    • Campaigns are easy to track
    • Immediate influx of traffic
    • Complete control over your daily budget and maximum CPC
    • Instant return on investment (You can easily define a cost per conversion and understand what your profit is)
    • More targeting options, including, towns, regions, age, likes/interests, income bracket, and other demographics
    • Easier to set up than Google AdWords
    • The ability to reach people early on in the buying process, before they are aware of their need, whilst capturing those who are aware of the need in a subtle way
    • You can use images and videos to capture the interest of your target market, helping you to sell your products and services
    • CPC is relatively cheap, depending on your industry (On average, our clients have paid no more than $0.61 per click)


    Cons
    -------------
    • If set up and managed incorrectly, it can be costly, but less so than Google AdWords
    • Depending on your target market, the majority of the large potential audience can be irrelevant (For instance, we would not recommend Facebook Advertising if someone only served or supplied their products and services to one town)
    • There is no option to target your ads at certain times within the day or on certain days of the week unless you choose a lifetime budget (Most of our clients request daily budgets)
    • Only really suitable for those operating in B2C markets.
    • Reaching people too early in the buying cycle could potentially reduce your goal conversion rate.
    Good Luck!
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