blog-facebook-ads

Set-up A Cost-Effective Facebook Ads Campaign

How to measure the success of an advertising campaign?

Some business might measured by brand awareness and engagement. However for marketers, it is more likely to measure the effectiveness by considering the profit.

Marketers don’t have huge budget to turn brands into household names. Thus, required to focus instead on trying to get profit quickly by using PPC (Pay-Per-Click), re-targeting, and it means thinking about how the numbers add up.

When creating a new PPC campaign on Facebook Ads or Google Ads, required to decide two aspects of budget:

  1. the maximum amount spends on each click [CPC (Cost-Per-Click)]
  2. the amount spends in total each day

CPC is the most you will pay for each visitor to your site, and is also the most you will be willing to ‘bid’ for a spot when you’re up against other advertisers. The aim is to ensure that this costs less than the value of each new visitor to your site.

Customer Lifetime Value (CLV)

CLV calculates the value of visitors to your site and calculated based on how much profit make on each sale of a product, as well as how many products sold per 100 visitors.

For most people, that latter number is somewhere in the region of 1 or 2. That would give you a 1-2% ‘conversion rate’ which is actually considered a fairly high score.

Margins Calculations

So, if you make $30 profit per sale, and you get one sale per 100 visitors, that means that you get roughly 30 cents per visitor. Suddenly, this becomes a much smaller amount of cash.

The LIFETIME value is probably a little higher though. It’s calculated over the lifetime of that visitor.

So if someone signs up to your mailing list and buys from you later, or if they buy from you more than once, this will bump up the number.

Still, that can take a while to pay off, and you might not have enough disposable income to last that long.

In short, just make sure the PPC is LESS than the amount you make per visitor.

Conclusion

Define your campaign strategy and where’s the sales funnel that can Facebook Ads grow your business before creating Facebook Ads campaigns.

Leave a Reply

Your email address will not be published. Required fields are marked *