Following The Numbers: How Data Works In Digital Advertising

by Common Thread Collective Collaborator

Feb. 09 2018


“Lots and lots of people (your boss, the person who works for you, the advertising gurus you follow on Twitter, and everybody else) have lots and lots of opinions about best practices, hidden strategies, and the secrets to advertising success. Carefully-collected and rightly-interpreted data is the pathway to cutting through all of that to know what is actually working for your business. And there is just nothing more important or empowering than really knowing what’s going on.”

-Andrew Faris, Director of Strategy, Common Thread Collective



In the world of Ecomm, it’s no secret that data > intuition. Another one of our digital marketing specialists Michelle Luo, in her fiery spunk, boils Andrew’s wisdom down to four words:

“Without data, you’re guessing.”

-Michelle Luo, DMS



In the name of simplicity, we’ve broken down the four most important metrics to watch when running Facebook ads. If you keep your eye on these, you will eliminate wasted ad spend and be able to alter strategy in real-time to sell more product.



CPM (Cost Per Thousand Impressions) = Ad Spend x 1000 ÷ Total Impressions

CPM will tell you whether or not your campaign is cost-effective. CPM is especially important when advertising across devices because it indicates which device is the most efficient in reaching 1,000 audience members. An average CPM is around $7, but keep in mind that a low CPM is a waste of spend if you’re not effectively reaching your target audience.



CPC (Cost Per Link Click) = Ad Spend ÷ Clicks

CPC tells you how much it costs you each time someone clicks on your ad. It’s a critical benchmark to whether or not your ad is performing efficiently. The average CPC across industries on Facebook is $1.72.



CTR (Click Through Rate) = Number of Clicks ÷ Number of Impressions) x 100

CTR compares how many people saw your ad to how many people clicked on it. Keep a close eye on your CTR to understand whether or not your ads are effectively driving traffic to your website. An average CTR is around 0.9%.

PS: If your CTR is high, but so is your CPC, then that means your website isn’t converting! Time to optimize your website to drive more sales.



ROAS (Return On Ad Spend) = Website Purchase Conversion Value ÷ Ad Spend

All hail the ROAS (Insert praise hands). This metric is based on all of the conversions that are tracked through the Facebook pixel on your website, because of the ads you’re running. While ROAS varies widely across brands and industries, the average ROAS across FB is 2.87. A desirable benchmark? 4x.



If you’re in marketing or advertising, take the excuse “I’m just not a numbers person,” light it on fire, and scatter those ashes at least three nautical miles from land (as required by the Federal Clean Water Act). You’re not a numbers person? Become one… or just ask our boy Kramer to help you.


“In the digital advertising world, we look at the data just as closely as your financial advisor looks at the stock market. To the untrained eye, it can be overwhelming and confusing, but we know how to interpret the data and find trends in ad performance to make sure we can maximize returns.”

-Scott Kramer, Lead Digital Marketing Specialist, Common Thread Collective


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