How to Analyze Facebook Ads (the right way)

What's up, marketers! In today's article, I’m going to show you how to analyze Facebook ads data the right way. I'll walk you through my exact dashboard column setup and explain why your CPMs, CPCs, and click-through rates don’t really matter in 2023. Let’s get started!

My Column Setup

Here's my column setup called "DD Master" for analyzing Facebook ads:

Delivery
Bid Strategy
Attribution
Budget
Amount Spent
Next Step (Purchases in my case)

Since I work primarily in e-commerce, I focus on purchases. If you're optimizing for leads, you'd replace purchases with leads and cost per lead.

Next, I have:

Reach
Impressions
Frequency

Frequency is crucial because it tells you if you're reaching new audiences or showing ads to the same people repeatedly. Aim for a frequency of 2 or under for blended prospecting and retargeting campaigns, and 4 or less for pure retargeting over the last 7 days, possibly up to 8 for the entire month.

Then I monitor:

CPM
CPR (Cost Per Reach)

CPM indicates cost in your industry. Facebook may reward effective creative with lower CPMs.

Additional metrics include:

Hook Rate - Percentage of viewers watching the first 3 seconds.
Hold Rate - Percentage of viewers reaching a through play.
Video Average Watch Time

This way, I can understand audience engagement effectively. I prefer Unique Outbound Click-Through Rate (CTR) over link CTR because it shows users who actually reached the landing page.

Finally, consider:

Cost of Landing Page Views
Leads
Checkouts Initiated
Post Shares
Post Engagement

Main KPIs vs. Secondary KPIs

My primary KPIs are:

Amount Spent
Amount of Purchases (or Leads)

When analyzing the ad account, the algorithm's spending pattern and the number of purchases guide my decisions. I cross-analyze spend with purchases, looking over the past 7 or 30 days, to determine top-performing creative.

Secondary storytelling KPIs are:

Hook Rate
Hold Rate
Video Average Watch Time
Unique Outbound Click-Through Rate

These metrics help dissect why certain creatives work. For example, a higher hook rate generally indicates higher audience engagement.

Beyond Metrics

User feedback in Ad Comments and on platforms like TikTok can provide invaluable insights into creative performance beyond metrics.

Why CPMs, CPCs, and Click-Through Rates Don’t Matter

Metrics like CPM, CPC, and click-through rates are indicators, not benchmarks. High CPM might just indicate a competitive industry. Similarly, broader audiences might result in lower click-through rates.

Final Thoughts

I hope this article demystifies my approach to Facebook ad analytics. For more in-depth training, check out my free series with Motion on "Make Ads That Convert."

Keywords

Facebook Ads
CPM
CPC
Click-Through Rate
Creative Analytics
Dashboard Setup
e-Commerce
Frequency
Hook Rate
Hold Rate
Video Watch Time

FAQ

1. Why is frequency an important metric in Facebook Ads? Frequency indicates whether you're reaching new audiences or showing ads to the same users repeatedly. Aim for a frequency of 2 or under for blended campaigns and 4 or less for retargeting over the last 7 days.

2. What is a good hook rate for Facebook video ads? A good hook rate means a significant percentage of users watched the first 3 seconds of your video. This metric helps gauge initial audience engagement.

3. Why don't CPM, CPC, and click-through rates matter much? These metrics indicate industry competitiveness and audience size rather than performance. They should be used for storytelling and context rather than optimization.

4. How do user comments help in analyzing Facebook ads? User comments can provide qualitative data on why an ad is performing well or poorly, offering insights that metrics alone can't reveal.

5. What should be the focus when analyzing Facebook ads for e-commerce? For e-commerce, focus on the amount spent and the number of purchases. These metrics will guide you in identifying top-performing creatives.