[MUSIC PLAYING] It's time for the analyze and optimize section, where we're able to look at the results of our campaigns, analyze them, and optimize them for better performance in the long run. Let's take a look inside Facebook Ads Manager. I going to show you some metrics you can look at that you can use to make decisions. So here I am inside of the Facebook Ads Manager in one of my awareness campaigns.
Now, over here in the top right hand corner, you can see that there is a dropdown menu called Columns. And Facebook has some pre-setup dashboards that you can look at. I would recommend starting by looking at the Performance and Clicks dashboard. So I'm going to go ahead and select Performance and Clicks. Within Performance and Clicks, you'll notice these two metrics called Reach and Frequency.
There's an additional metric further to the right in the Columns list called Impressions. Reach is the total number of people your ads have reached. The frequency is the number of times that your ads have reached those people. In your awareness campaigns, if your frequency is higher than two and a half, your budget is probably a little too high.
You're shooting for a frequency of between one and two and a half in your awareness campaigns. If you end up higher than that, you either want to reduce your budget or increase your audience size. One of the metrics that is not native to the Performance and Clicks dashboard is the cost per purchase metric. This is a very important metric for e-commerce business owners because it tells you exactly how much you're spending per purchase.
So we're going to go ahead and add that to our Performance and Clicks dashboard. So here from the Performance and Clicks dropdown, we're going to click the dropdown again. We're going to scroll all the way to the bottom where it says Customize Columns. We're going to select Customize Columns. And we're going to search in this box for purchase. Here we can see that one of the options is Purchases.
We're going to select total number of purchase and cost per purchase. What this will do is this will take those two metrics and it will put them at the very end of our dashboard. I'm going to uncheck all of these boxes here so that I just get the total number of purchase and the actual cost per purchases that are happening. What I want to do now is scroll down and click the Apply button.
What we will notice is we now have the number of purchases that happened and the amount that we've spent per purchase. It's very important that you don't look at my data and try to compare yourself against it. My business is mature. It's in its ninth year. What I'm willing to spend per purchase is different because of where I'm at the stage of my business. A good way to think about this is you don't really want to spend more than double your average profit per order to buy a customer.
So if you make $25 in profit per order, then you probably don't want to spend more than $50 on a purchase. The reason for that is that over time, that purchase price comes down as your retargeting and loyalty campaigns kick in, as your email marketing campaigns kick in. So you can allocate a little bit more budget to advertising than is profitable to get you kickstarted.
But if you're spending more than double the amount of profit you make per order to buy a customer on Facebook, in the long run, it's hard to make that work. One more note about purchases is we can look at our different ad sets and see which ones are performing the best. You'll notice here that audience number 11 is $10 cheaper than audience number 9.
So I would go in and look at the interest and who I'm targeting in audience number 11 and attempt to create more audiences that are related to those interests because that's performing better than audience number 9. The next metric I want to tell you about is the click-through rate. Click-through rate is not always a good indicator of cost per purchase.
But it tends to be a good indicator of how much you spend to get a click. Ads with a higher click-through rate tend to perform better in the long run. So it is a metric that we pay attention to. It's nice to look at the click-through rate on the ad level. So we're actually going to click into one of our ad sets and look at the different ads in there and see if there's a big variance in click-through rate. So I'll click into this ad set here and look at the individual ads that are in this ad set.
From here, I'll look at the click-through rate. And what I notice is this ad has a click-through rate of 3%, this ad has a click-through rate of 4%, and this ad has a click-through rate of 6%. Now, the cost per purchase is actually the cheapest on the ad with the lowest click-through rate. So in this case, it's not actually a correlating factor to cost per purchase. But it is something that we pay attention to because we're interested in what elements in our ads compel people to click.
And if we can learn about that and we can also look at the ads that are performing the best in terms of cost per purchase and we can combine those two things, we can end up with better ad creative over time as we create new ads and optimize based on the data that we learned from these ads. Now I'm going to switch into a campaign that only has one ad set so I can show you in a simple way how to look at the ages, the geographic regions, and the genders who are purchasing from you.
So here I am in a campaign that only has one ad set. Now, you would look at this and all of your awareness campaigns. I'm just doing this to make it easy to see on the video. Next to the Columns dropdown, you'll notice we have a dropdown menu called Breakdown. And we can breakdown our performance by a number of factors. Under Delivery here, I can select Age. And what I can see is that 45 to 54, my cost per purchase is $10.
55 to 64, my cost per purchase is nearly $11.65. Plus my cost per purchase is $10 as well. But I notice that the bulk of my sales are happening between 55 and 64. I have almost five times as many sales in this ad set from women who are 55 to 64 than I do of women who are 45 to 54. So what that tells me is that the bulk of my audience is in the 55 to 64 age range.
So if I wanted to tighten down my advertising, I would only target those age ranges. This is a remarketing campaign that we're looking at. So the numbers are all pretty consistent. When I look at my awareness numbers, I find that actually 45 to 54 is a lot more expensive, which makes sense. Less of my audience is there. And it's more expensive to get them to buy. So you can use this age breakdown to see what ages are most interested in your products.
Similarly, under the Breakdown tab, we can select gender. We can see here that literally all of my sales come from women because I only target women. Similar to that, we can look at country or region and see where our sales are coming from. And if I choose region here, one of the things that I'll be interested to find is what states in America have the most sales. Look at that.
California, New York, Florida, Texas, Illinois, and Massachusetts make up a very large part of my sales. You might find that there are specific regions that perform better for you. And you might tighten your advertising just to be in those regions if you're on a budget. It's really important to look at your data and find out what ages are buying, what genders are buying, what regions are buying.
You can look at these breakdowns in great detail. There's a number of other options that you can look at. And you can use that data to manipulate your audiences as you run more tests. The last thing I want to show you is how to figure out which audiences are performing. So you come into your campaign and you look at your ad sets. And then you look at the ones with the highest cost per purchase.
And you literally just turn those off. We call this nixing losers. So we're turning off the ad sets and, therefore, the audiences that don't perform. And we're continuing to run the ones that do perform. One of the suggestions that I have is add additional audiences into the same campaign. So create new ad sets in the same campaign with different audiences that you would like to test.
And run them alongside your proven winners. This way, you're constantly leaving your winning audiences running and you're constantly testing new audiences and allowing Facebook to allocate the budget based on where they think the best performance is going to be. You come in. You review the data. You turn off the losers. And you add new options in there to see which ones can win. After you've been running your ads for a while, you can expand the audience sizes.
In the same campaign, you can add ad sets that are running look-alike audiences, which are groups of people who look similar to your buyers. And you can let Facebook optimize over time because the more data they have on your Facebook Pixel, the easier it is for them to find people who are interested so your audiences can get bigger. So as you spend more money, increase your audience sizes, which gives Facebook bigger groups of people to choose from to put your ads in front of.
This has been a little video on how to review the performance of your campaigns and use that data to make decisions moving forward. I hope you've enjoyed it. And I'll see you in the next video.
