If you’re new to social media advertising, particularly Facebook advertising, you may not be clear on what sort of results you should be seeing. Are your conversions high? Low? Middling? How do they compare to others in your industry? How can you improve them?
Seeing conversion rate benchmarks for your industry can be helpful in understanding how your ads are faring.
What Conversion Rate Should You Expect on Facebook Ads?
There are several ways you can measure your conversions on Facebook ads. It all depends on what matters most to you. Let’s look at different key metrics you can use to determine if the number of conversions you’re getting is on track to helping you reach your goals.
Conversion rate, or CVR, is a measurement of how many times your ad is converting. Now, what “converting” actually means will depend on you and your ad goals. The following go a bit deeper on the metrics.
Your click-through rate (or CTR, if we’re getting fancy) tells you the number of times someone clicked on your ad versus the number of times the ad was shown. So:
Clicks on ad/ad shows = CTR
Cost Per Click
Another way to measure conversion is your cost per click (CPC). This is what you pay for each click on your Facebook ad campaign. In an ideal world, your CPC would be very low with high conversion rates!
Cost Per Thousand Impressions
Cost per thousand impressions, or CPM, measures what you pay for every 1,000 times your Facebook ad is shown. This is a good metric if you’re looking for brand awareness and not specific conversions through actions.
Cost Per Action
Sometimes a mere click isn’t enough to convert, and that’s where cost per action (CPA) comes in. Here, you’re paying for every time someone completes an action. That might be signing up for your email newsletter, visiting a landing page, getting a free trial of your software, downloading an ebook, or making a purchase.
Now let’s see what the average conversion rate is in your industry.
Conversion Rate Benchmarks by Industry and Ad Type
So what constitutes a “good conversion rate?” It depends on a variety of factors, including the industry you’re in, what you’re offering in the ad, and how compelling the ad visuals, copy, and call to action (CTA) are at getting viewers to take action.
Wordstream, a well-known online advertising expert, frequently takes the pulse on the average clicks and average cost for ads published by different industries.
Wordstream looks at a few key industries for these metrics, including:
Employment & Job Training
Finance & Insurance
Travel & Hospitality
Discovering the average Facebook ad benchmarks in your industry can give you an understanding of how you measure up. If they’re lower than average, you might want to make some adjustments to your ad campaigns (see tips below). If they’re higher than average, pat yourself on the back!
Average Facebook Conversion Rates
While CVR alone may not be enough to give you the full picture of your conversion rate story, comparing your numbers to that of others in your industry can be helpful.
As you see, the average conversion rate for Facebook ads across all industries is 9.21%. The numbers across industries vary wildly, from a low 2.31% for technology up to 14.29% for fitness.
Average Facebook Click-Through Rate
The more people click on your Facebook ads, the higher your click-through rate, and the greater the odds that a significant portion of those people will take the action you desire.
By far, the legal and retail industries see the highest average click-through rates. On the low end, we have employment and job training (not a common category for ads, and this shows in the numbers), as well as finance and insurance, customer service, and education.
Average Facebook Cost Per Click
The CPC for ads has certainly risen over the decades since online and social media advertising first popped up. Today, companies pay on average $1.72 per click.
If you’re in the finance and insurance industry, you’ll pay more for those clicks, with an average CPC of $3.77. If you’re in travel and hospitality, you’ll be happy to hear the average is $0.63! There are good deals to be had in the world of PPC (pay-per-click) advertising.
Average Facebook Cost Per Thousand Impressions
Wordstream doesn’t break down CPM by industry, but its data does show that the average cost per thousand impressions across industries is $11.54.
Average Facebook Cost Per Action
Cost per action can get a bit higher than cost per click because you’re seeing members of your target audience move through to completing a task. As long as that CPA leaves you plenty of profit margin, it’s okay if this is a higher cost.
While the average CPA on Facebook ads is $18.68, the lowest CPA is $7.85 for the education industry. The apparel industry ($10.98) and healthcare ($12.31) also have relatively low costs. On the high end, we have technology, which pays a whopping $55.21 on average for its CPA! Given the higher cost for technology, this may well be worth the investment.
Optimizing Facebook Ads for Conversions
One of the ongoing goals in digital marketing and advertising is to continually see higher conversion rates on Facebook ad campaigns and any other element used to reach a certain demographic.
Constantly increasing lead generation, clicks, signups, and sales requires paying attention to what your audience is responding to. The ad formats you use need to resonate with them. If they’re drawn in by vivid visuals, make sure you’re investing in high-quality photography and not taking pics with your phone.
The ad copy you use will also help increase conversions. Write copy that fits the advertising platform; what works on Instagram may not sell on Facebook with the same verbiage.
Another way to optimize your Faceook ads is to keep a keen eye on what your ads cost. Certainly, you don’t want pricing to exceed profit, but don’t be afraid to increase ad spend if you’re seeing positive results.
You can also increase conversions by exploring your targeting options. Retargeting is a clever way to get your ad in front of people who have already visited your website. It’s often that repeat exposure to a brand that gets people to buy.
And finally, though it might be a duh moment for you, really invest in getting to know your audience. Ad targeting is a fine art and a science, and it may take a while to create ads that really hit home with your customer base. The more you get to know them, and the more you bullseye your ads specifically for a particular niche, the better the results you’ll get.
Optimize Your Facebook Ads Spend with dash.fi
For ecommerce companies, it’s not just how you run your ads that will determine your success with Facebook advertising. It’s also how you pay for the ads. A lot of times, advertisers get frustrated with traditional credit cards, which may freeze an account if it’s spending a large amount of money (as advertisers are prone to do). This, in turn, pauses Facebook ads, and you risk missing out on serious potential revenue.
With dash.fi, you never miss a beat because your credit limits are 10-20 times higher than that of traditional credit cards. You can set up multiple virtual credit cards so you’ve got a card for every ad platform you use, and you can automate payments so you never butt up against those (insanely high) limits.
All of that..AND you get major cash back. In your first two months of ad spend, you can get as much as 3% cash back, and 1-1.5% after that. I bet your credit card doesn’t do that!