As a restaurant owner, you may be spending $50+ every month with Facebook ads. But how do you know whether or not it’s even working? I recently helped a restaurant with their Facebook advertising and here’s how I calculated their return on investment.
First, we established a goal. What’s the point of advertising if we don’t really know what we’re hoping to achieve?
In this case, our goal was to increase Constant Contact email signs ups for a birthday club to send a free appetizer coupon that is automatically sent out via email to incentive the customer & their friends to come in to the restaurant and celebrate on their birthday.
The dates we ran the ad: May 13, 2016 9:46am – May 16, 2016 9:26am
Before I ran the Facebook ad, I checked our Constant Contact account on May 11th & saw we had 125 email subscribers in their account.
Total spent on Facebook ads: $30.00
11,288 people reached (#of people ad was shown to)
5.722 Video views
82 Clicks – I used a specific trackable hyperlink to measure the number of clicks to their Constant Contact account specifically from the ad. Out of 82 clicks, 56 actually signed up which is a 68% return .
38 Facebook Likes on the ad
3 Comments left with a total of 7 people tagged
After we ran the ad, I checked their total number of subscribers and saw we now had 181 email subscribers as of May 16th which is a difference of 56 emails. (181 subscribers on May 15th – 125 subscribers on May 11th = 56 new subscribers. )
56 new email addresses is a 44.8% increase from what they had before. 56 more email addresses is the opportunity to have 56 more customers + whoever they bring. The restaurant paid only $0.54 for each email address received through Facebook and chances are they WILL make money off of those customers. Even if only half actually use their birthday coupon/deal, they’re only losing $1.08 on each customer/party. What they will make from that person MORE than covers their MINIMAL cost. Not to mention which of these are new customers and will then be returning customers, bring in new customers, etc.
According to Facebook’s 2015 data, the average ad click through rate for Facebook ads is only 0.9% and the average cost per click is $0.64. In this case, the restaurant owner’s cost per click was 42% lower – only $0.37! The cost per SIGN UP was also lower at only $0.54. The average Facebook Ad cost per thousand impressions is $5.99. This restaurant owners was almost HALF that (56% less) at $2.65 per thousand.
If a restaurant spends $30 every month in Facebook ads and had the goal of obtaining 50 new email addresses, that’s the potential for 600 new customers a year.
Do you run Facebook ads for your business? How do you measure your ROI? Let me know in the comments below!