Did you know that almost 25% of Facebook pages use paid ads to position themselves, according to a global Hootsuite report? Segmentation, reach and other features are more attractive on Facebook Ads than on other platforms, such as Twitter or Pinterest, for having a more modest user community. Another good reason to use Facebook Ads? Their excellent conversion rates, but… What is this metric, what is a good conversion rate for Facebook ads?
There are many metrics in Facebook Insights that help marketers optimize their campaigns and achieve better results. But the most important is the conversion rate. This metric, however, remains unknown to many.
In the following lines you will find an in-depth definition, the average rates for each sector and industry and the best practices to optimize it.
What is the conversion rate and why shouldn’t you lose sight of it?
Generally speaking, the conversion rate is the percentage of visitors to your website who perform a conversion, i.e. who buy a product, fill out a form, click on the advertisement or perform some other action.
Obviously, marketing and sales specialists work to achieve a high conversion rate, as it is a clear indicator of success in the work of the entire team (including designers, suppliers, etc.). In other words, a conversion rate above an industry average suggests that the company is doing well; a rate below the industry average, on the other hand, indicates that there is much room for improvement. But what is the average conversion rate for Facebook ads in each sector? Let’s not get ahead of ourselves!
It’s important to note how the conversion rate formula is developed. It is the number of conversions achieved divided by the total number of visitors, multiplying the result by 100 to get the percentage. Let’s look at an example: if the star product of a footwear brand receives 12,000 visitors in a given month and achieved 250 sales, its conversion rate would be 2.08%.
This percentage brings two direct benefits to companies:
- Determine whether the performance (sales) of your products has improved over a previous period.
- Compare that performance with your industry average.
In this way, developing and tracking conversion rates is vital for marketers. The information it provides allows them to understand what percentage of visitors are meeting targets and which products generate poor conversion rates.
For example, if this footwear brand was planning to invest in advertising to promote the latest snickers in the market, they can use the conversion rates to select the shoes that will deliver the best results during the campaign, eliminating those with the worst sales.
What is the average conversion rate for Facebook ads?
However, it would be a mistake to use the company conversion rate in isolation, without comparing it to your industry or target market niche. How will you know, then, if your performance is being excellent or lousy? As a result, many are wondering what the average conversion rate is for Facebook ads.
The fact is that this metric varies considerably from one industry to another, due to the differences between products, target customers and business models. According to a well-known WordStream study, the average conversion rate of Facebook in all sectors is 0.90%, an interesting percentage that does not contribute anything.
Much more interesting is to know, thanks to this same study, that employment and vocational training have the lowest conversion rate, 0.47%. In contrast, the legal sector surprises with 1.61%, the highest rate in the market. Between both extremes, we find fitness with 1.01%, retail with 1.59%, fashion and accessories with 1.24% or the beauty sector with 1.16%.
On the other hand, it is important not to confuse the conversion rate with another interesting Facebook metric, the engagement rate, which determines the number of interactions of a given publication (likes, clicks, comments, etc.). For the more curious, we will clarify that the average rate is 3.91%, according to We Are Social.
How to improve the conversion rate on Facebook Ads
Clarified what is a good conversion rate for Facebook ads, it is worth aborting one of the most widespread problems: bad conversion rates compared to the average of a sector or niche market.
What are the causes behind this problem? The most immediate answer is that the product in question does not sell, which it points to:
- A generalized crash in your demand
- A product that is worthless or too expensive
- Una mala usabilidad y diseño web
Any one of these factors could be behind a low conversion rate. So-called conversion rate optimization (CRO) is a process that allows you to set goals, compare different rates and improve (if necessary) usability and ecommerce design. To achieve the latter, A/B tests are performed with two different versions of the design, which will help answer the question: the problem behind a conversion rate is web design?
It can happen, however, that the problem is more complex and is due to macroeconomic factors, changes in consumer habits or crisis of reputation of specific brands. For example, if Nike, Apple or BMW are involved in a scandal, related businesses (stores, dealers, etc.) will have bad conversion rates until the ‘storm’ passes.
In view of the above, the conversion rate is a very useful reference for marketing and sales specialists, as it provides objective and accurate information on the performance of one or more products.