Help me land this client. Facebook campaign case. (6)
Hi Guys,
So I'm really close to land a BIG client. Before we sign they have asked me to provide a case to make sure I know what I'm talking about. However, I would like some input from the Facebook pros on some of the estimations. So here's the case.
Case info from the client:
Product - Men's fashion store in Sweden
Budget: 250K SEK
Campaign duration: 14 days
Audience: Men 19-30
So the mission here is too estimate CPC levels, reach, CTR etc. and ultimately the number of orders and CPO. That wouldn't be to hard in reality if I could start running the campaign for a day to have some benchmark figures, but unfortunately that's not the case.
My thoughts:
Please feel free to comment on any part of my thought process.
I will split it up in two campaigns, one for RHS and one for NF.
I have trouble estimating a the reach for this campaign. According to Facebook the potential audience is 1.3M (for RHS and Newsfeed during a 30 day period. I am not used to these kind of budgets so I am not sure how Facebook delivers impressions on these levels.
Question 1: Is it safe to say that the available reach for a 14 days campaign is around 600K? (1.3M/2ish)
I estimate the CPC to around 10 SEK. And the average NF CTR around .5%
This would add up to only 3000 clicks at a cost of 30K SEK.
Question 2: So what factor am I missing here, I know you can spend A LOT more, what factors am I leaving out?
The rest, number of orders and CPO is just a coming up with a estimated CR and running the numbers, but I find it hard to get somewhat realistic figures for the reach/clicks.
Would really appreciate if someone could get me in the right direction here.
Hmm I realise that my 600K reach calculation is really stupid. But on the other hand I can't come up with a decent estimation, lol.
How I would go about it:
Find the target customer, couple different groups of people who have bought, or I think will buy then figure out on average what it cost you to get a sale...your AVERAGE COST PER ACQUISITION.
Once your know how much your paying per sale...you need to figure out what your AVERAGE EARNINGS PER CUSTOMER are. How much is each customer paying you? What is each customer worth?
Your biggest formula is
Earnings Per Customer - Cost Per Acquistion = PROFIT
So how do you create profit?
Only three ways...
1.get more $ from a customer.
2.Drop the $ cost of getting a customer.
3 Or Get more customers.
Your every action should be do one of those things.
So assuming your are using this formula:
Traffic --> Ad ---> Landing Page ---> Offer
Once your know your Cost Per Acquisition... you want to lower it.
How do you lower it?
Take each one of those variables and try different marketing angles and see if any one converts better.
To do this you MUST track every step of the way, the banner, the LP, Offer.
You create different banners/landing pages/offer pages with different angles.
You then see which one people are responding to more and buying your product more..thus lowering your Cost Per Acquisition.
Once your CPA is below your EPC .....SCALE make sweet sweet bank. 
I hope that helps a little
All the best
Thanks for the input mrlivethedream.
I have a fairly good understanding of the optimization strategy and the CPC/EPC conditions. The thing I can't get my head around is what to expect of a "potential audience" of 1,3M on Facebook during a 14 days campaign.
When doing the numbers it seems like really small numbers at the bottom line.
Reach 1.3M (Given we reach the whole audience??)
0,1 CTR ( RHS ads)
3% CR ( around avg. conversion rate for E-commerce)
= only 195 sales.
Is that all I can expect from an audience like that with the given "average" numbers above?
With a CPC of 10 SEK the cost is 65K. Damn, what am I supposed to do with the remaining budget of 200K SEK ($30K)!? 
If the reach is 1.3 M, assume you will reach 1 million over the duration of the campaign for simplicity and accounting for a % of people who will not log in or ever see your ads due to competition.
This audience is likely heterogeneous in terms of their interests, characteristics and purchasing intent, but roll with an average of say 1% NF CTR. I would test the RHS but cull it quickly if it sucked.
How much you spend is going to depend on your budget and bids. Of those million people, 500,000 may log in daily.
That's a potential 500 x your CPM x how many NF loads they do = maybe $10,000+ USD in spend that day. Now, if you are bidding CPC you will only pay for clicks. At 1% CTR, that would be 5,000 clicks.
I'm not sure about Swedish click costs, but $1.40 or so USD seems a bit high. Let's half that to $0.70. 5000 x $0.70 is $3,500 daily, or about $50,000 in 14 days or 360,000 SEK.
So, could you spend that entire budget? Most likely. If 3% of those clickers bought something, that's 150 sales daily. If the sales are for over $24, you'll be profitable.
Predictions aside, you will need a very well thought out plan of attack, targeting and optimisation, will need to track very effectively (please tell me you can track the entire funnel!), and will want to optimise intelligently.
Are you running this using a PMD? How are you tracking user acquisition and eCommerce behaviour?
Zeno, you are, and will forever remain as the one and only Facebook Slayer. Thank you so much! And you sir, got a PM
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