Part of Pearmill’s Facebook Advertising Playbook.
Given that we’re looking at Facebook Advertising with a performance marketing lens, it’s paramount that we look at each step of the funnel in relation to the cost and performance of the Ad, Ad Set, or Campaign.
We follow a systematic way to make sure that each of the steps in the funnel is performing well within a baseline, but it’s important to understand that even if one metric is performing well — it doesn’t mean the Ad is worth putting more of your budget behind.
With that in mind, let’s take a look at another ratio-based metric in Facebook Advertising: Lead Conversion Rate.
Conversion Rate: To clarify, by conversion rate we mean the rate of which a user clicking (or tapping) on your ad converts into an install, a sign up (on the web), a newsletter subscriber, a lead, or anything that requires the user to go through a simple form or on-boarding process.
Baseline Conversion Rate Rule
The post-click conversion rate signifies the relevancy of the landing page to the Ad Unit, as well as how good it is at directing the user to take the action you want them to take.
In our experience, landing page conversion rates stay more or less consistent when the budget is increased, so long as the visitors are coming from the same Creative and audience.
As each conversion action is different, conversion rates tend to be different. Here are some common conversions along with what we’d consider being good conversion rates from ads:
- App Install Rate: 20–40%
- Newsletter Subscriber: 10–15%
- B2B Lead: 8–10%
- B2C Signup: 15–30%
If your conversion rates are below some of those standards, you should consider changing it dramatically or at least improving on the copy to match the Creative that’s driving traffic to it.
You should de-prioritize changing the landing page or on-boarding process if the Conversion Rate is higher
You should only judge the Conversion Rate of a Landing Page of an Ad Set or Creative if the Ad Set or Creative has passed the Baseline Click-Through-Rate Rule.
In the case that the Action isn’t as simple as a sign-up, or filling up a lead form then you should expect much lower Conversion Rates.
In some Campaigns, you may be attempting to get cheap clicks (e.g. with a wider audience and a catchy Creative) and naturally the quality of the clicks aren’t high. In this scenario, you should expect a lower Conversion Rate.
You should also expect your conversion rates from paid sources to be lower than conversion rates from organic sources. This is typically because people coming from organic sources have more context about your product, compared to people just coming from an ad.
Action — the final action you want the user to take (sign up, purchase, install, etc.)
Impressions — the number of times an ad has been seen (counts multiple views by the same person)
Reach Size — the number of people that are being shown an ad
Campaign — the grouping of Ad Sets, usually indicates targeting and/or Creative direction
Ad Set — the grouping of Ad Units within a Campaign, usually indicates a sub-target within the Campaign and/or Creative direction
Ad Unit — the image, copy, and/or video combination that’s displayed as an individual Ad Unit
Creative — Individual pieces of an Ad Unit (i.e. image, copy, and/or video)
CTR — the number of clicks over the number of unique impressions
Conversion Rate — the conversion rate from Click to Action