The KPIs that really matter

kpis Nov 10, 2020

Sometimes, we encounter customers who are incredibly happy because their ads are being seen by tons of people or because they are having tons of sales - they feel proud of impacting other people with something they have created.

Also, sometimes we get customers who are happy because of the cheap CPM (cost per mil impressions), cheap traffic, and the cheap cost per engagement they are getting.

While being happy is always preferable and there is nothing wrong with it, it is crucial to be happy about the right things… and about the right KPIs. Let us reflect on some of the previous examples.


Having cheap cost per engagement and lots of traffic

It’s your first campaign, you followed the favorite instruction of the free Facebook Marketing “Expert” you may have had a call with and who recommended you doing Traffic or engagement campaigns, and you start seeing a lot of movement: tons of people coming to your website and tons of people liking & commenting on your ads.

There’s huge cheap traffic and the cost per engagement is also cheap. The feedback is immediate as you see that something is happening per each euro you put into ads. You think “Hey! This s*** really works!”.

Few weeks go by, the excitement subsides, you look at the money you’ve poured in into ads and at your bank account balance, and wonder “dude, where is my money? where are the sales?”

Precisely at that moment, the Genie of the Lamp Facebook appears and tells you, “Hey! You asked for traffic and engagement, and that’s what I got you!”. Well, the Genie is right! Traffic and engagement do not equal sales.


Having your ads shown to a lot of people and having a cheap CPM

This is basically the same as a street banner. You pay some money so your ad is shown there, and you hope a lot of people will see it. Maybe you even try to track if the customers are coming because they have seen that, but usually, it is just praying so that happens.

 If you are happy using Facebook passively, just as a street banner, that’s ok as usually kills the performance of real street banners and you know exactly how much people have been impacted by your ads and how many times. The same happens when having an ad in 99% of journals.

For example, a CPM of 2,5 euros (pretty standard these days, but brace yourself on Black Friday) means that your ad is being impacted 1000 times, which in Prospecting campaigns is almost the same as saying that 900 - 1000 different people are seeing your ad for 2,5 euros. Those are insane numbers when comparing to old school ad channels. 

In any case, even despite that, stopping on a good CPM is missing out on what makes Facebook Ads so great – making sales! Which what we are covering next.


Having a lot of sales happening

Yes, this is the endgame, this is why we do ads for, but very, very careful here. There is no faster road to bankruptcy than putting more cash into ads with negative benefit margins.

Having 1.000.000 purchases means just that, tons of purchases. There is no reason to be happy until you know the average cost per purchase and if that leaves you with a healthy benefit margin.

That is why when we teach to set up a proper Dashboard, we always show a value KPI and a cost KPI. So, Purchase and Cost per Purchase.  That is also why knowing your ROAS and your breakeven ROAS point is of utmost importance. If your ROAS is above the breakeven point then hey, you have a money-printing machine!

So, we have already used 600 words to prove a simple point – not all the KPIs matter the same.

Do you sell physical or digital products directly on your website? This is how your KPI priority should look like.

ROAS > Cost per purchase (CPA & CAC) > Cost per Initiate Checkout (cIC) >  Cost per Add to Cart (cATC) > Cost per View Content (cVC)> Cost per Page View (cPV) > Cost per Click (CPC) > Cost per Mille (CPM)

Your goal is to get a lead and you have a simple funnel? Then this is how your KPI priority should look like.

Cost per lead > Cost per Landing Page View > Cost per Click (CPC) > Cost per Mille (CPM)

The biggest mistake you can make after reading all this? Being blinded by the shine of a low CPM and putting more money into it while abandoning a campaign with the lowest cost per purchase.  

What now? You were expecting another Omnichannel Program upsell? Not today! That train left last Sunday.



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