How to Measure Your Facebook Ads ROI (With Metrics That Matter to Your Boss and Business)

There’s a big, honkin’ elephant sitting next to me that I need to address here.

If you’re reading this post on the ROI of Facebook ads, you’re probably asking a lot of common questions:

• Are Facebook ads worth it for B2B?
• What’s a good ROI for B2B Facebook ads?
• How do I calculate the return on investment of my Facebook ads?

Yeah, you’re not alone. But you’re asking the wrong questions.

The problem is that these questions are all predicated on a giant assumption (and you know what they say about assumptions)—that you’re measuring your ad performance against the right metrics.

You don’t want to measure just any metrics. You want to measure the right metrics.

The metrics that matter to your boss. And your boss’ boss.

And that’s not typically the case.

In this post, we cover:

1. Are Facebook ads a waste of money for B2B?
2. Common mistakes to avoid
3. How to calculate the real ROI of your Facebook ads

If you like raking in “leads” that have downloaded your eBook or attended your webinar, you can stop reading now.

But if you’d rather measure the ROI of your Facebook ads by things like pipeline and revenue, read on.

Oh, and we’ll dive deeper into how you can accurately measure and optimize your Facebook ads ROI, providing actionable insights to get the most out of your B2B campaigns.

Are Facebook ads a waste of money for B2B?

A lot of B2B marketers wonder if spending marketing dollars on Facebook is worth it as part of your paid social media strategy. You might worry that your super special and totally-unique-to-you ICP isn’t on Facebook—or maybe that you just won’t be able to reach them on the platform.

I’ve said it before, but it’s worth a reminder. There are about 3 billion active people on Facebook. I promise you, your ideal customer is there, and you can find them. And Facebook offers the advantage of catching these people outside of their typical work hours (score!).

In fact, 74% of Facebook users are high-income earners, making it an untapped goldmine for B2B marketers. With an average cost-per-click of $1.72, it’s a cost-effective platform when used correctly.

Common mistakes to avoid

That said, Facebook ads can, in fact, be a waste of money if you fall prey to these mistakes B2B marketers often make:

1. Using bad targeting
2. Optimizing your ads against the wrong metrics

1. Using bad targeting

I already covered finding your perfect B2B Facebook target audience pretty extensively, but targeting is, in fact, one of the biggest hang-ups when it comes to driving return on ad spend (ROAS).

Working natively in the Facebook platform, you have limited options for targeting the people and accounts you’re looking for. It’s difficult or impossible to aggregate audiences by typical B2B variables like job title, industry, and employee count, you can’t upload account lists to find employees, etc. 

If you don’t get good at things like using your own first-party data and setting exclusions, you’re going to serve ads to a lot of people that don’t fit your ICP.

Which will tank your ROI.

Go back and check out that post if you’re struggling with Facebook targeting.

2. Optimizing your ads against the wrong metrics

Outside of targeting, the biggest problem surrounding the ROI of Facebook ads is your metrics.

When the top executives in your company present marketing results to the board, do they include impressions? Clicks? Engagement?

😬 😬 😬

I hope not.

The big wigs are much keener to hear how you’re actually impacting the bottom line. They want you to present metrics like:

• Pipeline and revenue created
• Opportunities created
• Cost-per-opportunity

Ultimately, you want to tie your ad spend to revenue, but since your sales cycle might make that an excessively long process, these are strong performance indicators to report on and optimize against along the way.

The problem is that Facebook doesn’t allow you to optimize your ad performance against these metrics. The only option the platform gives you is to optimize to the initial conversion event, which is a higher funnel metric.

This conversion point is flawed and doesn’t account for the lower funnel metrics that matter to the business—like opportunities, pipeline, and revenue.

So, you may end up with a bunch of “leads” that downloaded your guide but aren’t the people that end up buying your product/service. 

Volume looks good. Cost per lead looks good. But the ultimate ROI does not look so good. Then Facebook continues to optimize your ads against this metric, sending you more of the same.

D’oh. It’s a money pit.

Great for Facebook, but not for you.

The exit out of this merry-go-round (and driving real ROI) is to connect your Facebook performance data with your marketing and sales performance data. 

This lets you figure out who IS buying your product or service after engaging with your ad. The better you can get at measuring lower-level conversions and feeding that data back to Facebook, the better your ROAS will be. 

Adam Goyette, VP of Marketing at Help Scout, does a great job explaining what that looks like in 4 Ways to Reduce Your CPL on Facebook by 50%.

Additionally, B2B ROI measurement differs from B2C in several key ways. While B2C often focuses on immediate sales, B2B success metrics include longer-term indicators like Marketing Qualified Leads (MQLs), Customer Acquisition Cost (CAC), and Customer Lifetime Value (CLV).

How to calculate the real ROI of your Facebook ads

It’s a pretty simple equation to calculate the ROI of any advertising campaign, Facebook included:

(Money Received – Money Spent) / Money Spent = ROI

So, if you spent $2,500, which resulted in $10,000 coming into the business, the ROI equation would look like this:

(10,000  – 2,500) / 2,500 = 3

That can be expressed as a ratio, which would be 3:1, or a percentage, which would be 300%. 

The difficult part is connecting the spend with the money coming into the business.

For B2B marketers, measuring Facebook ads ROI goes beyond simple revenue calculations. B2B ROI measurement requires a nuanced approach due to longer sales cycles and multiple stakeholder involvement.

Key metrics to focus on include:

Return on Ad Spend (ROAS)

ROAS = Revenue from Ads / Cost of Ads

Aim for a minimum 2:1 ratio, though this varies by industry and sales cycle length. This metric helps you understand the direct revenue impact of your ad spend.

Customer Acquisition Cost (CAC)

CAC = Total Cost of Marketing and Sales / Number of New Customers Acquired

This metric is crucial for B2B because it accounts for longer sales cycles and higher-value transactions. Track this alongside your average deal size to ensure profitability.

Customer Lifetime Value (CLV)

CLV = Average Purchase Value × Average Purchase Frequency × Average Customer Lifespan

In B2B, CLV is particularly important because customer relationships often span years with multiple upsell opportunities. Compare CLV to CAC to ensure sustainable growth.

Pipeline Metrics

Track how ads contribute to:

• Marketing Qualified Leads (MQLs)
• Sales Qualified Leads (SQLs)
• Opportunity Creation Rate
• Pipeline Value Generated

Implement proper attribution tracking through tools like Facebook Pixel and your CRM to connect ad performance directly to pipeline generation and revenue outcomes, giving you a clear picture of your advertising impact on business growth.

Analyze these metrics together rather than in isolation. A campaign might have a higher CAC but could be worthwhile if it generates higher-value opportunities or customers with greater lifetime value.

Setting up proper tracking systems

To accurately measure your Facebook ads ROI, establish robust tracking systems. Start by installing the Meta Pixel on your website through Events Manager in your Facebook Ads Manager account. This code snippet should be placed on every page of your website to track visitor behavior effectively.

For easier implementation and management, use Google Tag Manager. Instead of adding multiple tracking codes directly to your website, you can place a single GTM container code that handles all your tracking needs. This approach simplifies future updates and reduces the likelihood of coding errors.

Set up precise campaign tracking by implementing UTM parameters for all your Facebook ads. This allows you to filter and organize your data accurately in Google Analytics while maintaining distinct tracking for your test campaigns. Your UTM structure should include:

• Campaign source (facebook)
• Medium (paid)
• Campaign name
• Ad set name
• Ad name

Configure conversion tracking in Facebook Ads Manager by defining specific actions that align with your B2B goals, such as form submissions, whitepaper downloads, or demo requests. For advanced automation, consider integrating your tracking data with your CRM system to sync your retargeting audiences and lead data automatically.

Test your tracking implementation thoroughly before launching campaigns to ensure all data flows correctly between platforms.

So, how do you connect all of your data?

Well, you have a few options for bringing the data together.

1. Aggregate all of your own data

Hello, spreadsheets! 

At my last company, we used a data connector to pull everything we needed into a Google sheet—Facebook channel data plus opportunity data from our marketing automation platform (MAP). Then the Google sheet was full of calculations to net out the ROI of our Facebook ads.

It was messy, and it broke all the time, and I had to spend a lot of time fixing it, but it got me the ROI data I was looking for (namely, SQOs and cost per SQO). 

If you’re a bit more sophisticated, you can use a business intelligence (BI) tool like Domo for this integration and number crunching. 

BI tools will make your life a lot easier—if you know how to use them. You’ll probably need the expertise of a data analyst or strong marketing ops person to navigate the tech.

2. Make UTM codes work for you

If you can’t quite make it to fully aggregating your data, this is the next best thing. When you advertise on Facebook:

1. Use a custom UTM for your campaign
2. Tag anyone that engages as leads in your MAP
3. Funnel these leads into a CRM campaign

With this approach, you can keep track of how many members end up in your campaign, how many convert into opportunities, how many show up to their demo calls, etc. 

The caveat is that you cannot see campaign spend in Salesforce—you’ll need to manually bring this data in from the ad channel (i.e. Facebook).

3. Use a tool like Metadata that measures Facebook ROI for you

Shameless plug—we’re really good at this.

If you’re tired of hacking it together yourself, Metadata makes it easy by pulling in data from your ad channels, MAP, CRM, etc. It’s all in one place, numbers crunched behind the scenes, so you can quickly get at the ROI metrics that actually matter (adios, impressions).

But obviously, we’re biased. So, I suggest you dive into some Facebook benchmark data yourself. Head on over to our 2023 B2B Paid Social Benchmark Data for a variety of industry averages for ROI metrics like:

• Click-to-lead conversion rate
• Lead-to-opportunity conversion rate
• Opportunity win rate

All of the data comes directly from our clients’ Facebook ad campaigns.

Additionally, consider using multi-touch attribution models to better understand the customer journey. Models like Time Decay or U-Shaped Attribution can assign value to multiple touchpoints, giving you a more complete picture of how your ads influence conversions.

Advanced ROI calculation methods

While the basic ROI formula provides a starting point, B2B marketing requires more sophisticated calculation methods. Incorporate Lifetime Value (LTV) into your calculations by including average revenue per user (ARPU) and retention rate. This approach accounts for the ongoing value of customer relationships, crucial in B2B where sales cycles can span months or years.

Multi-touch attribution provides another layer of sophistication. Rather than attributing all revenue to a single touchpoint, consider these models:

• Linear Attribution: Divide credit equally across all touchpoints
• Time Decay: Assign more value to recent interactions
• U-Shaped: Emphasize first and last touchpoints while acknowledging middle interactions

For optimal results, combine multi-touch attribution with LTV calculations. Aim for a 5:1 ROI ratio—meaning $5 in return for every $1 spent on marketing activities.

Optimizing campaigns for better ROI

To maximize your Facebook ads ROI, take a data-driven approach to optimization. Implement comprehensive tracking through UTM parameters and multi-touch attribution models to understand how your campaigns contribute to the entire customer journey.

A/B testing is crucial for improving performance, testing one variable at a time. This could mean testing different ad copy variations, images, or audience segments. For instance, test two different value propositions with the same target audience to see which generates more qualified leads.

In addition, consider integrating your Facebook campaigns with email nurture sequences. Use the insights from your Facebook campaigns to segment and personalize these follow-up communications.

For B2B, focus on optimizing for quality over quantity. Use your campaign data to identify which audience segments and messaging combinations bring in the most sales-qualified leads, then reallocate your budget accordingly. Leverage social proof in your ads—test different customer testimonials and case studies to see which resonate best with your target accounts.

Reporting ROI to stakeholders

When communicating ROI to stakeholders, focus on translating marketing metrics into business outcomes that resonate with executives. Instead of highlighting vanity metrics, connect your marketing activities directly to revenue impact and pipeline growth. Be transparent about any data limitations or assumptions in your analysis, as this builds credibility with leadership.

Create regular reporting workflows that compile campaign performance data against key business objectives. Make sure your reporting timeframes align with your actual sales cycles. Use shared definitions across marketing and sales teams to maintain consistency in how you attribute and report revenue impact.

Proactively share insights about optimization opportunities and strategic contributions to revenue. This demonstrates that marketing isn’t just tracking numbers, but actively working to improve business results.

Friends with the ROI elephant yet?

I get it—it’s hard to let go of the metrics you’re familiar with. They’ve been ingrained in our marketer brains. 

We have to do some rewiring to measure and optimize against lower-level metrics. Because focusing on these metrics that actually matter to your boss—and your business—is the real way to drive ROI from your Facebook ads. 

🎤🙋🏼‍♂️