Have you ever considered using Facebook Ads as one of your business marketing strategies? If yes, then it is important for you to understand how to calculate the ROI of the ad campaign.
One example is a construction company in Los Angeles, that wanted to promote their services and get conversions through a landing page.
ROI or Return on Investment is an important measure to know whether the Facebook Ads advertising campaign you run is beneficial or detrimental to your business.
To calculate ROI, there are two main factors that need to be known, namely the profit earned from the ad campaign and the costs incurred to run the ad campaign.
For example, let's say a construction company in Los Angeles has spent $5,000 on their Facebook Ads campaign. From that campaign, they managed to get 100 conversions with an average profit of $50 per conversion. Therefore, the total profit earned from the ad campaign is $5,000 (100 x $50).
Here is the formula to calculate the ROI of a Facebook Ads advertising campaign: ROI = (Profit - Cost) / Cost x 100%
If we substitute the known values, the ROI calculation for the Facebook Ads ad campaign is as follows: ROI = ($5,000 - $5,000) / $5,000 x 100% ROI = 0%
From the results of these calculations, it can be concluded that the ROI of the Facebook Ads advertising campaign for a construction services company in Los Angeles is 0%. This means that the company did not experience any profit or loss from the advertising campaign.
Conclusion Calculating the ROI of a Facebook Ads advertising campaign can help you determine whether or not the advertising campaign is delivering the desired results. To get a positive ROI, you must either increase conversions or reduce advertising costs. By understanding how to calculate ROI and applying it appropriately, you can maximize your business potential and achieve success in your online marketing campaigns.