Do you feel like you are spending too much on your Facebook advertising? Or maybe you are looking to start advertising and want to have the security of feeling like you understand the numbers. No worries, this will be a short fact-based article that will hopefully articulate everything you should look for in understanding Facebook advertising and knowing what is a good Click-Through Rate (CTR) for Facebook ads.
- How engaging your creative (art and copy) is
- How well your market is being targeted/how well the targeted group is responding
- How well you are placing your product (is Facebook the right market)
How to Calculate CTR
CTR is calculated by measuring impressions that led to the next page via a click (or engagement) with the ad. If you have 100 impressions with an ad and 10 people click on the ad, you would have a click-through rate of 10%.
From here you can add the apparent numbers and calculate out more of the funnel, deciding whether perhaps if only 2 of those go through with reaching out for services and only one closes then your Conversion Rate may only be 1%.
Conversion Rate is a metric of people who are brought to your site that complete a given action. This will more than likely be a percentage far lower than your CTR.
Your conversion rate regarding sale closings and the associated prices will also help you determine your Return-on-Investment (ROI) and decide if you should put more or less money into the (Facebook) ad system. Additionally, “Blocking” existing in the form of A/B Testing can help to optimize the ad which may increase CTR and subsequent Conversion Rate.
Beyond this, however, exists the actual mechanics of the craft. In short, if your given ROI is leaving you at least 2:1 then you are doing well. Extrapolate that out enough times and it is a simple and solid return rate. The numbers are there.
To bring this all back around, more complexly, Facebook advertising runs all the data for you. So while it is a clear pay-to-play system, having all the analytics can give you an edge. Additionally, it does work to pacifyingly relocate that locus of control.
It can vary heavily by industry, especially given the percentages of numbers can spell huge margins when extrapolated over hundreds of thousands of ad runs and people. An excellent per-industry graph exists here. However, to simply answer what is a good Click-Through Rate (CTR) for Facebook ads, in a heavily understated way ~1%. That’s a good Click-Through Rate.