Facebook’s new ROI measurement tool

Does Facebook drive sales? This is the question that Zuckerberg’s social network is hoping to answer with a new conversion tracking tool.

Does Facebook drive sales? This is the question that Zuckerberg's social network is hoping to answer with a new conversion tracking tool.

Previously it was only possible to monitor the volume of clicks and app downloads that Facebook ads were generating. This made it difficult to accurately measure how many clicks converted into sales, registrations and other desired actions.

The new feature was made available last month in Facebook's Ad Manager and with a simple piece of code, marketers can measure the conversion rates on desired actions by users, if completed within 28 days of clicking.

There is also the option of 'Optimized CPM' which is all about unit optimization. This function allows Facebook to optimize your ads, showing them to the demographic that it considers most likely to convert, ideally lowering CPA.

According to VentureBeat, Fab.com participated in the beta testing and managed to reduce CPA by 39%.

With plans to come out of beta and launch in the near future, this certainly presents the opportunity to use social for more targeted, cost-effective ads. We'll be paying close attention to the figures over the first few months.