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:
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:
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.
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 2.89 BILLION 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!).
That said, Facebook ads can, in fact, be a waste of money if you fall prey to these mistakes B2B marketers often make:
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.
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:
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%.
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.
Well, you have a few options for bringing the data together.
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.
If you can’t quite make it to fully aggregating your data, this is the next best thing. When you advertise on Facebook:
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).
Shameless plug—we’re really good at this.
If you’re tired of hacking it together yourself, we make 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 2021 B2B Paid Social Benchmark Data for a variety of industry averages for ROI metrics like:
All of the data comes directly from our clients’ Facebook ad campaigns.
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.