Are you analysing your Facebook ad performance on an on-going basis?
It’s the most important campaign management activity, as it allows you to recognise ad fatigue and adjust your campaigns accordingly.
In this article you’ll discover how to analyse your Facebook ad performance using four core metrics, known as the CRFC Method.
Analyse ROAS before using the CRFC Method.
Before you use the CRFC Method you first want to analyse the Return-on-ad-spend (ROAS) of your campaigns to identify ones that are underperforming. Measuring your ROAS answers the two most important questions when it comes to successful Facebook advertising.
- Are you generating new revenue?
- Is it more than your Ad Spend?
Meaning, is the total revenue generated from your Facebook ad campaigns higher than your total ad spend? If it is then you are ROAS positive, if it isn’t then you are ROAS negative and if it’s the same then you have breakeven ROAS.
For more information on how to implement ROAS analysis click here.
What is the CRFC Method?
The CRFC Method is a way to identify and analyse the performance of your campaigns and the ads within them.
One of the most common mistakes people make with Facebook advertising is launching an ad campaign and doing no analysis once it is running.It’s the analysis of your campaigns and the subsequent actions you take, depending on your findings, that delivers exceptional ROAS.
The CRFC method consists of analyzing four core metrics:
- Cost
- Relevance
- Frequency
- CPM
Let’s look at each one in turn.
1. Cost
First is Cost. This isn’t your overall spend or amount spent on each of your campaigns, it’s specifically your cost per result.
When you have a set daily budget and aren’t scaling your campaigns, if you see your cost per result decreasing, then your campaign results will be increasing.
For example, if you are running a conversion campaign
The opposite will be true if your cost per result is increasing. Your campaign will be decreasing in performance and therefore you’ll be getting fewer results for your budget.
Relevance
Next is Relevanceby which I mean relevance score. Relevance score is the 1-10 metric that Facebook gives to each of your ads and it can only be viewed at the ad level of your campaigns.
After 500 impressions your ads will get an initial relevance score. However, this will usually change, either increasing or decreasing in the first 72 hours as your campaign embeds in the algorithm.
If your relevance score increases over time, then you’ll typically see your cost per result decrease and your campaign performance rise.
However, when your relevance score is decreasing you’ll find that your cost per result will increase, indicating that your campaign performance is decreasing
Frequency
Next we have Frequency. Your frequency is a delivery metric that tells you how many times on average someone has seen your ad.
Your frequency will always start at 1 and increase over time as you spend more of your campaign budget and reach more of your target audience.
As your frequency increases to 2,3,4,5 and so on, you’ll notice that it has an impact on your cost per result and relevance score.
The higher your frequency, the more people are seeing the same ads and eventually you’ll hit what is known as ad fatigue.
Your relevance score will start to decrease and your cost per result will start to increase. Overall, your campaign performance will be decreasing and that will have a negative effect on your ROAS.
CPM
Finally, we have CPM, which is an acronym for cost per mille. This is your cost per 1000 impressions. As your frequency increases and you reach more of your target audience, your CPM will start to increase.
This means that it is now costing you more for 1000 impressions than it previously did. This will have a knock-on effect on the rest of the CRFC metrics.
For campaigns that are decreasing in performance due to ad fatigue indicated by a high frequency, you’ll also notice that your CPM increases as well as your cost per result and soyour relevance scores will decrease.
When you have a campaign that is improving however, your frequency will still be increasing, but at a slower rate as you are reaching more of your target audience due to the high relevance scores.
Your CPM will stabilize or decrease slightly and as a result your cost per result will also decrease, therefore increasing your result rate and your ROAS.
Create CRFC Customised Reporting Column
In order to measure these metrics in one reporting view, you’ll want to create a custom reporting column in your ads manager dashboard.
First, navigate to your Ads Manager dashboard and under Columns click on Customise Columns.
Remove irrelevant columns and under the Performance section add in Relevance Score and Frequency. Then under the Cost category add in CPM.
Click the “Save as preset” check box and name your new column CRFC Metrics and then click on Apply.
When using the CRFC Method you now have a specific reporting view to use at the ad level of your campaigns.
Use the compare feature to track changes in these metrics to measure effectiveness of your ads.
By using the compare feature in your data reporting you can track how the CRFC metrics change over time as your campaign is running. This gives you insight into how your ads are performing and when to make changes, known as “testing refreshes”, to reduce the impact of ad fatigue.
One of the compare reporting methods you can use is to implement 7-day running analysis. This is where you compare the CRFC metrics from the last 7 days against the previous 7 days. That way you can understand how your ad performance is changing over time and recognize the signs of ad fatigue.
To implement this navigate to the ad level of a campaign that has been running at least two weeks. Once at the ad level, select the CRFC Metrics reporting column that you created earlier and then in the reporting view select last 7 days.
Finally, toggle the compare switch in the reporting view, a previous period date selection will appear and finally click update. You’ll now see an arrow next to the title of your columns.
Click on this arrow for each of the CRFC columns as well as your results column and you’ll be able to see the change from the first week to the second both in actual numbers of the given metric, as well as the percentage increase or decrease in that metric.
In this example below you can see that the cost per result, the Add to Cart action, has increased by 26.67% from £1.50 to £1.90. In particular the first ad in the top row has increased by £0.77, ad two in the second row decreased by £0.35 and the third ad has also increased by £2.01.
By doing this level of ad performance analysis on a rolling 7-day basis comparing the latest week’s data with the previous week you’ll be able to spot when your campaigns start to decrease in effectiveness due to ad fatigue.
You’ll also be able to spot the opposite effect, when your campaigns are increasing in performance and you want to identify a winning ad to scale.
What to do with your analysis findings?
By properly analysing your ads and how their performance changes as your campaigns are running, you can identify ads that are decreasing in effectiveness and then implement ‘testing refreshes’ to combat ad fatigue.
For a full walk-through of how to combat ad fatigue and the types of changes you can make based on the results of your 7 day analysis, such as ad refreshes, targeting refreshes and offer refreshes click here.
Conclusion
Additionally, you can also use the CRFC Method to spot campaigns that are increasing in effectiveness, which you can then scale to reach more of your target audience.
What do you think?
What key metrics do you use to analyse your campaign performance?
Let me know by leaving a quick comment below.
About Charlie Lawrance
Charlie Lawrance is the Founder and CEO of Gecko Squared, a digital marketing agency that specialises in Facebook advertising. His clients include eCommerce companies, software companies and professional service businesses. Stay in touch by liking his Facebook Page (Charlie Lawrance).