Entry #87: Very frustrating day with Facebook Ads

This is the 87th post in a series. The first post can be found here.

Progress report

Not much progress made today, and this post will be quick. I’m definitely tired and feeling burnt out, but mainly just frustrated with Facebook.

Every once in a while, you’ll setup really good campaigns based on good data analysis, and it just won’t work.

This has happened over the years many times with client campaigns. It’s happened with Facebook and Google Ads alike, and it just sucks.

I’m pressed for time to get as many registrations as possible for my live webinar scheduled for this Friday, and my campaign structure in Facebook reflected sound targeting.

But the results today were just abysmal.

The first campaign I had running as of this morning was averaging a $110 CPA.

Based on experience, I know that Facebook won’t get that CPA down to anywhere acceptable, so I shut that campaign off altogether.

I made a new campaign with some additional targeting (opening up mobile devices again), and the CPA was hovering at around $72.

I shut that campaign off in frustration as well, and created yet a third campaign today, removing some of the interest category targeting and using a new lookalike audience based on previous website visitors over the past 180 days.

So far, the CPA for that campaign is around $20. Not good.

Now, because I know I’m targeting people more likely to buy my course, based on historic data, I should be willing to pay a higher CPA than I was paying before, but just how high should that CPA be?

The main dimensions that are narrowing my targeting is only targeting the Facebook platform, only targeting males, and only targeting ages between 24 and 35.

By looking at my sales data from the lifetime of these campaigns, I should be able to get a sense of a break even CPA.

For the segment I’m targeting in the new campaigns (males aged 25–35), I spent $10,500.

There were 665 completed registrations.

There were 24 purchases.

Avg Cost / Registration: $15.78

The tough thing is figuring out the actual conversion value from the 24 purchases. Not all of them were $497 sales (and the revenue data in Facebook isn’t accurate).

Let’s assume (and I think this is somewhat accurate) that 8 of those 24 sales were $497 sales.

8*479 = $3,976

And that the other 16 sales were $11 agency overdrive memberships with an average lifetime retention rate of 12 months.

(11*12)*16 = $2,112

So total revenue from the 24 sales was about $6,088. Let’s call it $6000.

So, right off the bat, we know that a $15 CPA is too high (unless I increase my conversion rate, which I do hope to do).

If my current conversion rate remains the same, at 3.6%, we can aim for a break even CPA.

The way I figure this out (there are probably better ways) is to get an average revenue per customer.

6000 / 24 = 250

Then multiply the revenue per customer and your conversion rate.

250 *3.6% = $9.

So, essentially, I’d need a $9 CPA to break even, if the results from the historic data for this segment remain constant.

That does give me more headroom than in the initial financial analysis, and it’s good to know that males between the ages of 25–35 convert at 4 times the average rate, but the question remains if I can still get conversions in that segment at under $9.

With a shorter webinar, and better pricing, I hope to increaser the conversion rate from 3.6% to something in the 10–20% range, which will allow me to spend significantly more on a CPA, so that’s good.

Anyway … that’s that.

We’ll see where the campaigns go from here.

Keep on truckin’
- Isaac

The next post can be found here.