Understanding Facebook Ads

Commonly used terms and acronyms for stores running Facebook Ads

Previous in series: Set up your Facebook Ads account

While creating and managing Facebook Ads has been made simpler with Business Manager, Facebook doesn’t do the best job at explaining the numerous terms associated with running ads. Facebook does have a comprehensive glossary of these ad terms, but you’ll be lost as a first time advertiser.

To make your life easier, here’s a list of terms that you NEED to understand before you create your first ad campaign.

  • Objective: Your advertising objective is what you want people to do when they see your ads. For example, if you want to get more leads, you need to select lead generation as your objective. If you want more store visitors, your objective should be traffic. I’ll cover this is more detail in future articles.
  • Campaign: It is a group of ads that you create. Ads under the same campaign have same daily / lifetime budget as well as schedule. But you can have separate bids and targeting settings for individual ads. This is where you define your objective.
  • Ad set: An ad set tells your ad how to run. At the ad set level, you’ll create an audience for your ad using Facebook’s targeting options. You’ll define your audience, set your budget and schedule, choose your placements, and more.
  • Ads: Your ad is what your customers or audience will see. At the ad level, you’ll choose your creatives (images, videos, text, call-to-action button), which will drive the audience to what you are trying to promote.
New campaign structure for Facebook Ads
  • Audience: An audience is a group of people who can potentially see your Facebook ads. When choosing a target audience for your ad set, you can either create a new audience or use a saved audience.
  • Potential Reach: The number of monthly active people on Facebook that match the audience you defined through your audience targeting selections.
  • Campaign Reach (Actual Reach): The number of people who saw your ads at least once. Reach is different from impressions, which may include multiple views of your ads by the same people.
  • Actions: An action is activity that happens as a result of your ad. For example, if someone views your ad and then visits your store, this may be attributed to your ad. An action is attributed to your ad performance when it happens within a specific time period.
  • Clicks: This metric counts each time a user clicks on your ad to visit your landing page.
  • Impressions: It is simply the number of times your ad entered the viewable area of user’s screens for the first time, regardless of whether the user clicks or takes any other action on the ad. If someone sees an ad, scrolls down, and then scrolls back up to the same ad, Facebook counts as 1 impression.
  • CPC: Cost Per Click. While running CPC ads, you are charged when users click on your ad and visit your website.
  • CPM: Cost Per Thousand Impressions. While running CPM ads, you are charged when users view your ads, regardless of whether or not they click on them.
  • CTR: Click Through Rate. This is the ratio of the number of clicks your ad receives to the number of times impressions in the same time period.
  • Bid (or Max Bid): This is the maximum amount you’ve indicated you’re willing to either on a CPC or CPM basis.
  • Budget: This is the maximum amount you’re willing to spend on your ad sets, either on a daily basis or over the lifetime of your scheduled ads (ads having a specific start and end date).
  • Targeting: This is the process of defining an audience for your ads. by choosing various factors like location, gender, age, likes, interests, etc. of your target audience.

The terms mentioned above are the ones you should have a good grasp on before you continue any further with this guide. The topics not mentioned here like custom audiences, ad bidding, optimization, and many more will be covered in detail in future articles. Stay tuned!