Now that you know how to set up an ad, let’s delve into how to manage and optimize it. Here are some key terms that will help you understand the reporting process:

Impression: Facebook measures an ad impression the moment an ad enters the screen of a desktop browser or mobile app. If an ad doesn’t enter the screen, Facebook does not count it as an ad impression.

Click through rate (CTR): The percentage of people who click on the ad. You can find the CTR by dividing the number of clicks by the number of impressions.

Cost per Click (CPC): A pricing model where the advertiser is charged whenever someone clicks on the ad.

Cost per Thousand (CPM): A pricing model where the advertiser is charged according to the number of times their ad appears per 1,000 impressions.

Relevance Score: Relevance score is calculated based on the positive and negative feedback Facebook expects an ad to receive from its target audience.

A/B Test: When you compare two versions of an ad to see which one performs better.

Ad Copy: The text part of the ad.

Ad Content: The image in the ad.

A/B Testing

Now that your ads are up and running that does not mean it is time to sit back and relax! This is the perfect time to start A/B testing and optimizing your ads. You can create ad variations using different images and headlines to see which one performs better. Facebook will automatically optimize your campaigns so that more of your budget goes towards the best performing ad.

The trick with A/B testing is that you can only test one ad component at a time. For instance, if you want to A/B test ad content then you can create two ads with different images BUT you must use the exact same ad copy, headline and call-to-action in both ads. Do not try and kill two birds with one stone!

Why is that important? If you use different images in each ad and different copy, then you won’t be able to know what component of the ad made it perform the best. Doing separate tests to see which headline, image, description and call-to-action is the top performer works best for your brand.

Improving CTR

If you have a low click-through-rate, A/B testing is a great way to improve it. If you are finding that you are not getting very many clicks on your ads then you should try increasing your bid price. Facebook will give you a recommended range of where your bid price should be. The suggested bid amount is based on how many people are competing to show an ad to your target audience. The bid price is the maximum amount you are willing to pay to show your ad and odds are that you will end up paying less than that amount.

Improving Audience Targeting

If the opposite is happening and you are getting tons of clicks but very few valuable leads then I would suggest narrowing down your target audience. You can choose to target by location, gender, age, likes and interests, relationship status, workplace and education. You can also include or exclude people who are connected with specific Facebook pages and events. 

Take the time to think about who would be most interested in your ad and then combine multiple targeting methods to improve the chance of them seeing your ad.

Sometimes it can be tricky to identify your target audience, which is why Facebook created the Audience Insights tool. This tool can show you the demographics, location, language and purchase activity of a given group of people. You can choose to view information from three different groups:

•All people on Facebook.

• People connected to your page or event. 

• People in a custom audience that you created.

Let’s use the same example from before. Say you have a listing in San Diego that is perfect for a family. You can create an audience in Audience Insights for married couples, ages 35 to 45, living in California. Once that audience is created, you can see statistics about their lifestyle, spending habits, education level and household income. You can’t craft the perfect message without knowing your audience and Audience Insights is a great tool to help you do it.

You might be curious about how Facebook is getting this information. Don’t worry they aren’t hacking into computers and stealing personal information. Audience Insights surfaces information people share on Facebook, along with information from trusted third party partners.

Relevance Score

The last performance indicator that you should keep your eye on is Relevance Score. Ads are given a Relevance Score between 1 and 10, with 10 being the highest. The score is calculated based on the positive and negative feedback Facebook expects an ad to receive from its target audience. The reason why this score is important is because it can help you lower the cost of reaching people. A higher score indicates a lower cost. This is because Facebook’s ad delivery system is designed to show the right content to the right people, and a high relevance score is seen by the system as a positive signal.

Please keep in mind that you should not use one single metric as an indicator of a successful ad. For instance, you could have an ad with a 10/10 Relevance Score but that does not mean that it is the best performing ad. It is important to keep all metrics in perspective and test ad variations to find the perfect ad to accomplish your campaign objective.