Evaluating Metrics Against Your Target Goal Flashcards
SMART GOALS?
Specific Measurable Achievable Relevant Time-Bound
KPI?
Key Performance Indicator: Metric or set of metrics that you use to evaluate if you have met your goal.
It should be:
MEASURABLE (a number)
DIRECTIONAL (could go up or down)
RELATE TO YOUR GOAL (be relevant to what you are trying to achieve with your SMART goal ad objective)
What are the THREE things your KPI should be?
Measurable
Directional
Relevant to your Goal
What are the three main categories of KPI’s?
Awareness (Reach, Impressions, Followers) (TOFU)
Consideration/Engagement (Likes, shares, comments, clicks)
Conversion (app download, buy a product)
How do KPI’s and Campaign Objectives work together in ads manager?
In ads manager, you choose a campaign objective that is clearly labeled as one of three options: Awareness, Consideration, Conversion. Underneath these options are different campaigns you can run that will address and measure your different KPI goals
(ie: ads campaign for consideration is traffic, ad campaign for conversions is app downloads, catalogue purchase, ad campaign for awareness is reach)
What 3 things should you align to make sure your ad campaign is successful?
Campaign Objective, KPI’s, and SMART goals.
What is ROAS?
Think of it as the revenue generated from a specific ad campaign.
It is technically Return on Ad Spend (for a specific campaign). Important to make that distinction because it is different than ROI (Return on Investment). ROI includes everything involved with product costs too.
What is formula for ROAS?
ROAS = Revenue (earned from ads) / Ad Costs
What does ROAS tell you?
if your campaign is profitable.
What is a good ROAS number?
Should always be over 1. One means it equals the cost of your ads.
ROAS vs ROI
ROAS is the revenue from ONE ad campaign, ROI looks at bigger picture spending and profit and takes into account the total costs involved with advertising and sales and product costs.
Ex: If your ROAS was 3, because you had a revenue of $750 on an ad spend of $250, BUT you had a product cost of $500… then you have a ROI of $250 which is what your ad cost, so you didn’t really make any net profit.
Formula for ROI:
ROI = (Revenue - Investments) / (those investments)
investments include the money you spent on advertising and sales PLUS the cost of goods sold
What are the only two ways you can increase ROAS?
- either lower the cost of your ads
2. increase the revenue you generate
What is the result?
the result is the action we want people to take based on the objective we set for our campaign (which is based on our goals).
What is the Cost Per Result?
How much we paid to get a desired action to happen.
What is the CPR formula (Cost Per Result)?
Total amount spent on campaign / # of results you achieved.
Zigtebra ROI example:
Say we spent $500 to buy 50 $10 tee shirts and sold all fifty tee shirts for $20 each, we made $1000. So what its our ROI? 1000-500 = 500/500 = 1. 1 = 100% ROI
What is CAC?
Customer Acquisition Cost: the total marketing cost of getting one new customer.
What is LTV?
Lifetime Value: How much your customer will spend with your business over the lifetime of their relationship with you.
Calcuated by multiplying the Average Customer Value times the Average Customer Lifespan.
How can FB Ads Manager help you manage your CPR Cost Per Result?
Fb Ads Manager can let you set a rule where it will flag you if your CPR goes past a certain point that you specify.
Average Purchase Value?
Average amount a customer spends per purchase
How do you calculate the Average Purchase Value?
Divide the Total Revenue by Total Purchases
What is the Average Purchase Frequency Rate?
How many purchases you typically get from one customer
How do you calculate the Average Purchase Frequency Rate?
Divide the number of purchases by the number of customers. # of Purchases / # of Customers
