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Pearmill’s Facebook Ads Playbook: Baseline Click-Through-Rate Rule

Facebook Ads Baseline Click Through Rate Rule

Part of Pearmill’s Facebook Advertising Playbook

Nima Gardideh
Dec 18, 2018 · 3 min read

Before we get into the CTR rule, it’s important to talk about the lens we use when it comes to Facebook Advertising.

There are plenty of different ways to use Facebook Advertising for growth, however, we’re specifically looking at it as a performance marketing channel — meaning all the campaigns we run, and all the rules in our playbook series are meant to have the user perform a specific action (e.g. make a purchase, install an app, etc.)

This is an important distinction, because every metric becomes related to its positive or negative effect on helping us reach the ultimate performance goal.

With that in mind, let’s take a look at one of the first ratio-based metrics in Facebook Advertising: Click Through Rate.

Baseline CTR Rule

The main reason we look at the Click-Through-Rate metric is to help us judge the relevance of the Ad Unit and Creative to the audience that our Campaign and/or Ad Set is targeting.

Our rule is based on campaigns we’ve run from budgets started at $5 / day to $50,0000+ / day — so the rule can be applied to a wide range.

However, a good rule of thumb is that the less money you’re spending on a campaign, the higher your CTRs should be.

Rule

If a link ad has a link CTR less than 0.75%, you should consider swapping it out with a new ad unit. You should de-prioritize changing the Creative or Ad Unit if the CTR is above 0.8% and close to 1% or higher.

Caveats

You should only judge the CTR of an Ad Unit or Creative once it has passed the Enough Impressions Rule.

You should be comfortable with lower CTRs in the case that the post-click Conversion Rate is higher than the average you see across your campaigns and when costs are sustainable. For example, an ad unit may not be the most engaging — but it gives a great deal of context. In this case, when someone does eventually click on it they’re more likely to convert than people that came from other ads.

It’s also okay to be at the lower-end of this range if you’re using self-selective Creative (which we’ll talk more about in the future).


Mini Glossary

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

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Nima Gardideh

Written by

Co-Founder of Pearmill (https://pearmill.com). I write about the intersection of engineering, product, and growth.

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Nima Gardideh

Written by

Co-Founder of Pearmill (https://pearmill.com). I write about the intersection of engineering, product, and growth.

HackerNoon.com

Elijah McClain, George Floyd, Eric Garner, Breonna Taylor, Ahmaud Arbery, Michael Brown, Oscar Grant, Atatiana Jefferson, Tamir Rice, Bettie Jones, Botham Jean

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