The Facebook advertising platform is constantly changing, which is great in that new features and reporting functionality are constantly being added, but can get confusing when you’re trying to understand your campaign results. But no more excuses—it’s time to learn how to actually analyze your Facebook ad performance.

## Calculating ROI

The only reason you’re paying for Facebook ads is because you hope to accomplish some sort of return on investment (ROI) from them. It’s easy to get lost in the link clicks, impressions, reach, and other metrics, but when it comes down to it, ROI matters over everything. So how can you determine whether or not your Facebook ad results equate to positive ROI?

To calculate ROI, you would do total revenue generated from your campaign divided by total ad spend. For example, let’s say I spent \$500 on a paid Facebook campaign and generated \$1,000 in sales from the campaign. That would give me an ROI of 2.0 (\$1,000/\$500). This means that for every \$1 I spend on my Facebook ads, I get back \$2—which means I can hypothetically say that if I invest \$2,000 in this campaign, I can earn \$4,000—pretty sweet, right?

To practically calculate this in your Facebook ads manager, think back to the previous section of this post where you learned how to set up custom reporting views. One of the custom reporting views you set up can help you calculate ROI. Below is a screenshot of the custom report I use when I want to take a look at campaign ROI:

Now you can easily determine the total revenue from your campaign (number of website purchases multiplied by the purchase value) and divide that by total amount spent on the ads.

One important note here: If you have multiple products, you will want to calculate the Facebook ad ROI from each of those products individually, as the purchase values will be different based on the price range of your products. In other words, you can afford to spend more on a campaign for a product worth \$800 versus a \$40 product.

This method for calculating ROI is great if you’re in e-commerce or promoting an event, product, or service with a set price. For different campaign objectives such as awareness or lead generation, having a customer relationship management system such as HubSpot that allows you to track where your leads came from and when/how they convert into customers is key for closed-loop reporting.

## Breaking It Down

You can look at your overall campaign metrics, compare ad sets, and review the performance of individual ads.

### Campaigns

When analyzing the performance of your campaigns, make sure you’re comparing campaigns that have the same goal (or “objective,” as Facebook calls it). For example, you might have a lead-form campaign with the goal of generating new leads. On the other hand, your second campaign might be running videos with the goal of driving people to your website so that you can then run retargeting ads against them. Measure the success of your campaign based on the objective you set.

What to look for here depends on what you decided to test among the different ad sets in your campaign. When determining which ad set performed best, keep in mind our above discussion on ROI. Other metrics that you should be aware of when you’re making adjustments and deciding what to test next include:

• Cost Per Result – Average you paid for each action—this depends on what your campaign objective is (leads, clicks, etc.)
• Click-Through Rate – The number of times your ad was clicked on divided by the number of times it was shown to users