8 Facebook & Instagram KPIs You Should Be Measuring
Apr 09, 2020
Updates added 11/24/20
Understanding how your digital campaigns are performing often poses a challenge for advertisers. Dealer Teamwork has compiled a list of key performance indicators (KPIs) that we use to evaluate the performance of our dealer’s social media campaigns to help make this process easier.
Social media advertising’s role for automotive dealers
First, let’s take a look at the role of social media advertising in a car dealer’s marketing mix. Social media marketing can be effective at every stage in the sales funnel. Typically the OEM covers high-funnel efforts to build brand awareness around new models. So, at Dealer Teamwork, we see social media advertising driving the most value for dealerships with mid-funnel researching shoppers and low-funnel decision making shoppers.
This doesn’t mean that dealers should never try any other strategies with social advertising. This is where we recommend starting and dialing in your efforts. Each dealer and market will be different, but these strategies almost always drive the most value across the board.
If you want more tips for setting up social media campaigns, read our blog on best practices for Facebook and Instagram advertising beginners. This blog also goes over Facebook and Instagram campaign structure, which will be helpful to know before you read the next sections.
KPIs for mid-funnel research strategies
Before we jump into the KPIs for mid-funnel research strategies, it’s important to first understand your objective. Shoppers at this stage in the car buying journey are getting more serious about their research. They are looking to make a decision about which type of car they ultimately want to purchase, and they are starting to look for dealers with those vehicles available in their area.
At this stage in the car buying process your goal is driving a lot of relevant traffic at the lowest cost. You want to show that you have what a shopper is looking for and initiate a connection between the shopper and your dealership.
Reach helps you know how many unique people are seeing your ads. If this number is low, something may be off with your targeting or daily spend allowance.
Frequency tells you how often shoppers see your ad. Dealer Teamwork aims to show these ads 1-2 times per week per user. You don’t want this number too high for a few reasons. One, showing the same ad over and over again to the same shopper doesn’t give them any new information. Two, shoppers repeatedly clicking this ad can be wasteful. You want to generate a high volume of clicks here so you can build up your audience for targeting with lower-funnel ads later.
CTR is important to look at in conjunction with reach and frequency. It’s important to show your ads to the biggest audience possible, but you also want them to engage with the content. Success of mid-funnel strategies is a balance of generating awareness (seeing your ad) and clicks (engaging with your ad).
Finally, CPC is important because you are trying to drive a lot of traffic with this strategy. If you spend too much money per click, you limit your ability to achieve that goal. CPC will vary by dealer and market. If you use a social media vendor, they will be able to provide a target CPC recommendation.
KPIs for low-funnel retargeting strategies
Let’s look at the objective again first. Shoppers at this stage in the car buying journey are finishing their research. They are narrowing their search to the 1-2 dealers that have the vehicle they want in stock at their ideal price point.
Purchases (sales measured with Facebook’s offline conversion measurement tool)
Cost per purchase (cost per purchase with Facebook’s offline conversion measurement tool)
At this stage in the car buying process, your goals are driving repeat traffic and actionable leads (calls and form submissions). Achieving these results means you are reaching the right audience with the right message, and you are driving them towards a purchase with your dealership.
CTR is, again, a KPI here because you are looking to continue engaging your audience. If this metric is low, your offers may not be competitive with the competition. You may also want to highlight the benefits of buying from your dealership versus your competition. As shoppers move farther down the funnel, you will want to prioritize cost per lead and cost per purchase higher than CTR.
Leads will also help you gauge if you are meeting your shopper’s needs and wants. Shoppers typically don’t reach out to a dealer by phone or email if they aren’t in the final stages of making their purchase decision.
If you don’t have a goal in mind for cost per lead, collect a baseline number after a few months of running ads on Facebook and Instagram. Monitor this metric as time goes on to ensure your campaigns are driving results at an efficient price point. Some fluctuation is normal, but huge spikes are cause for re-evaluating your creative, targeting, budget and competition in the market.
You can track how your Facebook and Instagram ads influence vehicle purchases by setting up offline conversions, also known as sales matchback reporting. There is some manual effort and a set-up period involved, but it’s worth the work. Once set up, this tool gives you an aggregate number of shoppers who made a purchase after viewing one of your ads. Facebook attributes sales up to 28 days after someone viewed an ad, so it’s important to upload your CRM data frequently (on a monthly basis at minimum).
Cost per purchase, like cost per lead, is important to watch over time. Set a baseline, then watch it on a regular basis. Again, some fluctuation is normal, but huge spikes should trigger review of your campaign creative, campaign set up and potential market influences.
Are these the only metrics to watch?
This begs the question, “why are there so many additional metrics in Ads Manager if these are the KPIs I should be looking at?” As with any advertising efforts, there are always additional supporting metrics that help you determine the health of your campaigns. Also, if you try different campaigns with different objectives, you may consider other metrics to be your KPIs.
For example, watching Amount Spent. Monitoring this metric helps you understand if you have enough budget to achieve your goals. However, looking at this metric by itself doesn’t shed much light on performance.
Also, trying out newer ad formats, like On-Facebook Destination for Automotive Inventory Ads (OFDAIA), may require different KPIs. This ad format keeps shoppers “on-Facebook” (hence the name) by dropping them on a dynamically generated Facebook VDP vs your website. So measuring website traffic is not very useful here. It also takes advantage of Facebook audience data, special ad placements and your dealership’s audience data to target in-market shoppers. For this ad format, metrics like leads, purchases, cost per lead and cost per purchase are valuable. Learn more about OFDAIA here.
As machine learning advances and ad formats change, some KPIs may phase out. For example, even though we listed CPC as a potential KPI above, it may not make sense as a KPI based on the bidding strategy you use. You can learn more about Facebook’s bidding strategies here.
We don’t say this to confuse you, but to alert you that there’s no one-size-fits-all or set-it-and-forget-it approach for KPIs. Choose your KPIs based on factors like audience, goals and campaign set up. At Dealer Teamwork, if you run social media marketing with us, we will help you determine the KPIs based on the campaigns you have running.
As you get more familiar with running campaigns on Facebook and Instagram, the meaning behind other metrics becomes more apparent. One easy way to start getting familiar with other metrics is to simply hover over them in Ads Manager and read the definitions.
Below are Facebook’s definitions of each metric as found in Ads Manager for reference.
Reach: The number of people who saw your ads at least once. Reach is different from impressions, which may include multiple views of your ads by the same people.
Frequency: The average number of times each person saw your ad.
Link Clickthrough Rate: The percentage of times people saw your ad and performed a link click (clicked your ad’s destination link).
Cost per link click: The average cost for each link click.
Leads: Dealer Teamwork measures Click to Call and Form Submissions. We set these up as custom conversions. They are tracked as the number of lead events tracked by the pixel on your website and attributed to your ads.
Cost per lead: The average cost of each lead (Amount Spent / Leads).
Purchase: The number of purchase events attributed to your ads, based on information received from one or more of your connected Facebook Business Tools.
Cost per purchase: The average cost of each purchase (Amount Spent / Purchases).