In order to better track ad performance and measure conversions through social media, you can embed a tracking pixel in your website. A tracking pixel is a graphic of 1×1 dimension that is loaded when the user lands on a particular page or takes a certain action. This lets the social platform know that the customer took the action and helps the measure the ad ROI effectively. Since the dimension is 1×1 pixel the tracking code is not visible to the user and behaves transparent.
Whether your goal is to generate sales on your website or capture leads, you can measure your marketing ROI by calculating your customer acquisition cost or CAC. Lets look at a sample calculation. Lets assume you spent $1000 and got 100 visitors on your website. If 5 out of every 100 people that visit your website, make a purchase then your website conversion rate is 5%. This means that by spending $1000 you got 5 customers which makes your CAC $200. One could argue that is this your cost per order or cost per sale (CPO or CPS) and not CAC since some of the visitors may be existing customers who have already made a purchase in the past. In that case, if we were to assume that 1 out of the 5 customers was an existing customer then you only acquired 4 customers by spending $1000 and your CAC was $250 while your CPS stays at $200 since the number of orders/sales generated is still 5.
On the other hand, if your goal is to generate leads then you got 100 visits or leads by spending $1000 which means your cost per lead or CPL is $10.
In order to justify spending your marketing budget on any platform, you need to make sure that the average margin per sale is higher than the average cost per sale. In the previous example, since your average CPS is $200 then you need to make sure your average margin from the sales is higher than $200. This would give you a positive ROI from the particular social platform.