Face­book ad spend­ing strategies

Asian Journal - - WORLD -

I con­tinue my se­ries on Face­book mar­ket­ing to­day with a dis­cus­sion on how to be smart with your Face­book bud­get.

How Much Should I Spend on My Face­book Ads

One of the great things about Face­book Ads is that you can set not only how much you are will­ing to spend per day but also how much you are will­ing to spend on any sin­gle click on your ads. While this flex­i­bil­ity is good news when it comes to find­ing the right au­di­ence, it also adds to the chal­lenge some­what as you now have to de­cide how much you should be spend­ing on your ads. With such flex­i­bil­ity there’s a whole lot more to think about!

How do you cal­cu­late this and en­sure you get it right?

Work­ing Out Your Con­ver­sion Rate and Profits

The first thing to do, is to cal­cu­late what your pre­cise profit is each time you turn a vis­i­tor into a cus­tomer. What are your over­heads on each prod­uct (your ‘cost of goods sold’) and what is your ask­ing price? Next, ask your­self what your con­ver­sion rate is. For ev­ery 1,000 peo­ple who visit your web­site, how many peo­ple buy a prod­uct? It might be one, it might be .01 or it might be 50. What­ever the case, this will now al­low you to work out how much each vis­i­tor is worth to you.

For ex­am­ple, f you have 1,000 vis­i­tors and 2 of them earn you $30, you’re mak­ing $60 per 1,000 vis­its. That means that your vis­i­tors are worth 6 cents each to you. That in turn means that you can af­ford to pay 6 cents per click and guar­an­tee you will breakeven. If you pay 5 cents per click, you should be guar­an­teed to make a profit. Con­sid­er­a­tions

Not so quick. There are a few com­pli­ca­tions and con­sid­er­a­tions that make this a lit­tle less straight­for­ward than it may ini­tially ap­pear.

For starters, you need to con­sider what your ‘cus­tomer life­time value’ is (CLV). In other words, some cus­tomers might order more than once and that means you can af­ford to pay a lit­tle more.

Of equal im­por­tance is your cash flow. You need to save a lit­tle bud­get in order to ex­per­i­ment with things like tar­get­ing, word­ing and split-test­ing to get the per­fect con­ver­sion rate.

Your Take away

If you have been fol­low­ing this se­ries on Face­book, you should by now have a clear idea who your au­di­ence is. Ex­per­i­ment with dif­fer­ent fea­tures un­til you find the com­bi­na­tion that fits within your bud­get and leads to the most con­ver­sions. Of course, ev­ery good mar­ket­ing plan is not made-up of a sin­gle ac­tion, but rather of sev­eral re­lated ac­tions that all work in con­cert with each other. Call us, we’d love to help you!

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