Facebook Advertising Terms You Need to Master

While being potentially very profitable, Facebook advertising is also hard to master. One of the things that makes Facebook advertising difficult to learn is the large number of advertising and marketing concepts that you need to understand in order to effectively run Facebook ads. In other words, there’s plenty of jargon for the average user of Facebook Ads to navigate through. Almost all of the important advertising metrics and terms also have their own acronyms which you need to remember in order to be able to comprehend various learning materials.

Cost Per Click (CPC)

CPC is the average cost of one user click on your Facebook ad. It’s also one of the most commonly used metrics for determining the efficiency of an ad campaign.

Cost Per Engagement (CPE)

CPE is the average cost of a user engaging with your ad. It is calculated by dividing total ad spend with the total number of engagements. Engagements can be likes, comments or shares.

Cost Per Thousand Impressions (CPM)

CPM is the average cost of showing your ad to a thousand people. CPM is used to determine the cost-effectiveness of your campaign. The number of impressions is the number of times your content is displayed

Cost per action (CPA)

CPA is the average cost of a visitor performing an action on your ad. It’s calculated by dividing your ad spend with the total number of actions performed. Clicking on your ad can be considered as an action.

Click-Through Rate (CTR)

The CTR is the percentage of people who saw your ad and then clicked on it. Calculated by dividing the total number of clicks with the total number of impressions. It can help you determine how effective an ad is in driving traffic to your website.

Lookalike Audience (LAA / LLA)

A lookalike audience is a type of audience you can create for your Facebook advertising campaigns by using an existing Custom Audience. A Lookalike Audience consists of people who are similar to the people in your Custom Audience. Think of it as profiling your consumers.

Retargeting

Retargeting is the practice of advertising products or content to people who have already interacted with your content in some way. To be able to run retargeting campaigns on Facebook, you will need to place the Facebook Pixel on your website.

Return on ad spend (ROAS)

ROAS is one of the most important advertising metrics. It’s used to measure the performance of an advertising campaign. To calculate ROAS, divide the total revenue generated by the advertising campaign with the amount of money spent on the campaign.

Website Conversion

Website conversions is a campaign objective that, when selected, tells Facebook to try to find people in your audience who are the most likely to convert. You will need to install the Facebook Pixel on your website in order to use Website Conversions as your campaign objective. Before you do that, you need to first have a website.

There you have it, the important advertising terms you need to know in order to run profitable Facebook advertising campaigns. Whether it’s CPC, STR or just ROAS, understanding these terms can make you quick on your feet and put you ahead of the game when it comes to reaching your soon to be customers.