# Are FB Ads impossible for me?

14 replies
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Let's say I have a shop that has about a 1% conversion rate and I makes about \$30 per sale.
Will FB ads always be too expensive for me?
2 years ago I briefly looked into it and got the impression that a click would cost me around \$0.6, which makes it impossible.
Yet I regularly see ads on FB for products I really can't believe would convert over 1%, or for affiliate stuff where the marketer will only get a commission.
I even saw an ad for an online magazine that didn't have a subscription and didn't seem to sell anything.
How are the ads profitable for them?
What am I missing here?

Could an experienced FB Ads marketer enlighten me?

(I tried to post this in the Ad Networks forum but the system wouldn't let me...)
•  Originally Posted by altar22 Let's say I have a shop that has about a 1% conversion rate and I makes about \$30 per sale. Will FB ads always be too expensive for me? 2 years ago I briefly looked into it and got the impression that a click would cost me around \$0.6, which makes it impossible. Yet I regularly see ads on FB for products I really can't believe would convert over 1%, or for affiliate stuff where the marketer will only get a commission. I even saw an ad for an online magazine that didn't have a subscription and didn't seem to sell anything. How are the ads profitable for them? What am I missing here? Could an experienced FB Ads marketer enlighten me? (I tried to post this in the Ad Networks forum but the system wouldn't let me...)
Let's start with some math. At 1% conversion, you need, on average, 100 clicks to make \$30. So your break even cost per click is \$0.30. If you can buy clicks for 30 cents or less, you should not lose money in the long run.

If you can raise your conversions to just 2%, suddenly your break even is \$0.60, and those 30 cent clicks could make you rich.

Enough math. On to what I think you really want to know.

Two words - back end.

Odds are, the folks you mention - the low margin products, affiliates and freebies are NOT making their money on the first interaction. They are making their profit on the second, third, and more sales to that buyer.

Sorry, need to go back to math for a minute...

If you only ever make a single sale to a buyer that pays you \$30, your Lifetime Customer Value is \$30.

If you can offer that buyer another product (or series of products) that pays you an additional \$300, your LTV for that customer becomes \$330.

Say that for every 100 buyers, you can turn 10%, or 1 out of 10, from \$30 customers into \$330 customers. Let's see what happens.

Scenario 1: 100 buyers at LTV of \$30. Revenue = \$3,000.

Scenario 2: 90 buyers at LTV of \$30 + 10 buyers at \$330. Revenue = \$2700 + \$3300 = \$6000

You've doubled the value of that bloc of 100 buyers.

Add in just that 1% increase in conversion and your LTV doubles again, to 4X what you started with.

That is how they do it...
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I understand that they look at LTV, but then there is a cash flow problem so it is kind of risky imo.
The other issue is that I've never seen a CPC of \$0.3, at least not in my niche.
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•  Originally Posted by altar22 Thank you for answering I understand that they look at LTV, but then there is a cash flow problem so it is kind of risky imo. The other issue is that I've never seen a CPC of \$0.3, at least not in my niche.
Don't get hung up on the exact numbers. I picked them out of thin air because they made doing the math in my head easier.

Look at the formulas and the relationships, plugging in your own numbers.

One thing I forgot to mention...

You may be looking at people who are indeed losing money with their ads. You can't assume that every campaign you see is a winner. You may be looking at an advertiser who simply hasn't run out of money yet.

Look at it another way, again using made-up numbers.

If you have a \$0.60 CPC, and you can make back \$0.30 per click, the net CPC is \$0.30.

Many marketers aim to break even or close to it on their advertising, and make their profits on the back end.
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• Thanks.
I want to give it a real try now because I need to target precisely in terms of age, location, etc, and that's the thing FB is really good at if I understand correctly.
One other thing I'd like to know: will the CPC be more expensive the more targeted the ad is?
If that's the case, is the game to try and find your targets with as few targeting layers possible not to get too expensive?
Or do you want to really zero in and increase CTRs and conversions to offset the higher CPC cost?
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•  Originally Posted by altar22 Let's say I have a shop that has about a 1% conversion rate and I makes about \$30 per sale. Will FB ads always be too expensive for me? 2 years ago I briefly looked into it and got the impression that a click would cost me around \$0.6, which makes it impossible. Yet I regularly see ads on FB for products I really can't believe would convert over 1%, or for affiliate stuff where the marketer will only get a commission. I even saw an ad for an online magazine that didn't have a subscription and didn't seem to sell anything. How are the ads profitable for them? What am I missing here? Could an experienced FB Ads marketer enlighten me? (I tried to post this in the Ad Networks forum but the system wouldn't let me...)
I've ran several FB ad campaigns and never received a positive ROI. Maybe I'm doing something wrong but it just has never happened.

I'm doing Facebook Messenger Bot Ads currently for some clients because the boss likes the tech. They're generating a decent cost per conversion but so far they seem to be generating very few genuine leads/conversations.

Maybe it greatly depends on the industry you're in too.

Hopefully another Warrior more experienced with FB ads can chime in.
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•  Originally Posted by altar22 Let's say I have a shop that has about a 1% conversion rate and I makes about \$30 per sale. Will FB ads always be too expensive for me? 2 years ago I briefly looked into it and got the impression that a click would cost me around \$0.6, which makes it impossible. Yet I regularly see ads on FB for products I really can't believe would convert over 1%, or for affiliate stuff where the marketer will only get a commission. I even saw an ad for an online magazine that didn't have a subscription and didn't seem to sell anything. How are the ads profitable for them? What am I missing here? Could an experienced FB Ads marketer enlighten me? If you are stuck with just US traffic, then it will likely be expensive. If you can go and target other countries, that will normally help bring your cost down. The niche and targeting will also place a role. (I tried to post this in the Ad Networks forum but the system wouldn't let me...)

There are many factors to look at here. John did the first step by doing the math.

Now to me, the next questions are, how can you increase your conversion rate, have you tested anything to try to bring it up?

Also for Facebook, what countries can you target?
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• I'm targeting US southern states (especially Louisiana) women 24+

Honestly I haven't worked on my conversion rate.
The truth is I'm not even collecting the data to understand what's going on...
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• possible for u
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• Banned
TRY ....TRY........TRY.............
Bast Of Luck
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• Learning to optimize. I couldn't live I don't think with a 1% CTR. Knowing the demographics of the prospect your looking for. Narrow in on those and try to get it more targeted. Also how well is your landing or sales page? Have you started there? Balance the two together.
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Working to achieve higher results...
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• source of traffic from fb on my blog generate less revenue
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• Paid Ads is a process that over time with the right 'tweaks' will mean a more profitable campaign over the long run.

Your cost per click will come down eventually but it will cost you some time and money to learn by trial and error.

Also as John said...backend profit is what successful paid marketing is all about.

I know a guy from Dublin Ireland personally who is making an average of \$10K per month (profit) who is getting 0.03 % conversions (which is quite poor of a result) by using another paid traffic source.

And his front end offer is a product that costs \$1.

But luckily for him he has some Higher Back End products that are making his poor performance STILL profitable.
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• ABT( always be testing). Have you created a fb pixel?
Run \$5 or \$10 ads for a couple days to give your pixel
some data to work with. This way you don't have to
guess about whether it will be profitable or not. The
data will tell you. Then you can make tweaks to your
different images or capture pages to see which
converts better.
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• hi i do no the clear vision of facebook adss because less time only i use that facbook,, u can tell idea of facebook thanks fo the given idea
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