The Math Doesn't Add Up (FB Ads)

[mclaren]

I'm buying traffic from FB to a single product page, and while I am new to this, the math just doesn't make any sense to me.

COGS (including shipping) is $6
Product price is $25

Leaves me with $19 profit, if I have no other expenses. But I'm advertising, so I have to factor that in. If I want at least a 20% margin, I can spend up to $14 to acquire a customer. At the moment, I am paying $0.77 per click to my website. Assuming I can convert 2% of those clicks to my website, I'd be spending $39 to acquire 1 customer.

I realize that my website and ad are not perfect, so I don't expect to convert every other customer, but these numbers right now are obviously not profitable. Any advice? I'm sure other people have sold products in this price range using the same strategy (FB Ads --> Custom website) and have had much better success. Any advice?

The item I'm selling is good for FB imo, since it's something that would fall under the impulse buy category. Very similar items are selling on other websites too, so I don't think it's the product that is the issue.

 

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[sector7]

Any chance on repeat buys or upsells? You can try improving your conversion rate by a couple percentage points through a better landing page (improve the copy and design) or find some ways of making the product more appealing.

 

[ZCP]

What is the upsell? What is the reoccurring revenue? What is your LTV?

 

[100k]

Optimize your ads (improve the copy, improve the ad title, improve the image/creatives, improve the audience targeting, only target the placements with the best conversions i.e newsfeeds) and you can get your cost per purchase down to $5, and your CPC down to maybe $0.20.

The key word is OPTIMIZE, trim the fat, focus and scale up what works.

Major tip; always give FB at least 2-3 day to optimize before you kill a campaign.

 

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[hughjasle]

At the moment, I am paying $0.77 per click to my website. Assuming I can convert 2% of those clicks to my website

This all comes down to your real conversion rate. All you gave us is a guess.

We can help you out but we don't know where (or even if there is an issue yet).

Give us all the numbers and we can help pinpoint the issue.

Right now it'd be a complete shot in the dark between fixing the:

• Ad
• Ad Targeting
• Landing Page
• Sales Price
  
• Backend flow (upsells, email followups, LTV, etc.)
• And more

I have ads that are getting 1 cent clicks and ads getting $2 clicks. Both are profitable.

 

[GuestUser450]

Any advice? I'm sure other people have sold products in this price range using the same strategy (FB Ads --> Custom website)

Are you running traffic directly from the ad to a product page?

 

[Deleted2BB3x9]

Optimize your campaign. Then try retargeting.

 

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[mclaren]

Any chance on repeat buys or upsells? You can try improving your conversion rate by a couple percentage points through a better landing page (improve the copy and design) or find some ways of making the product more appealing.

What is the upsell? What is the reoccurring revenue? What is your LTV?

Currently, there is no upsell. I'm dropshipping a jewelry item in a specific category (like a lion ring). But it seems that it'd be a good idea if I added another piece of lion themed jewelry, like a lion necklace or something?

 

[mclaren]

Optimize your ads (improve the copy, improve the ad title, improve the image/creatives, improve the audience targeting, only target the placements with the best conversions i.e newsfeeds) and you can get your cost per purchase down to $5, and your CPC down to maybe $0.20.

The key word is OPTIMIZE, trim the fat, focus and scale up what works.

Major tip; always give FB at least 2-3 day to optimize before you kill a campaign.

Optimize your campaign. Then try retargeting.

Yup, I'm working on that. I know my ads aren't super effective since I'm still learning the platform, but I am AB testing everything. Although, I usually give each ad a day before I change something. Might have to give it a little longer. Currently testing each ad set at $15/day but I could increase that as well if you think it'd be more effective.


I think retargeting would be great, just FB doesn't have enough data since I don't get that many clicks. Maybe I'm picking the wrong objective? Right now I'm doing Traffic with the option set to optimize for link clicks and paying per click. Only showing to the newsfeed as well. Audience is pretty specific I think, around 830k people.

The conversion objective makes the most sense to me, but I remember reading that until you have enough people clicking your ad, FB won't be that great at optimizing for conversions. I do have the pixel setup however.

 

[100k]

I'd run $10/day budgets. 1 adset per campaign, 2 ads per adset.

What's your copy ... post it and we'll give you feedback on it.

Only target mobile/desktop newsfeeds on Facebook only (no instagram, no audience network, no right hand side ads or instant articles etc.).

Show us one of your ads... we'll give you feedback on the image/ad title / ad copy etc.

 

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[Mineralogic]

I'm buying traffic from FB to a single product page, and while I am new to this, the math just doesn't make any sense to me.

COGS (including shipping) is $6
Product price is $25

Leaves me with $19 profit, if I have no other expenses. But I'm advertising, so I have to factor that in. If I want at least a 20% margin, I can spend up to $14 to acquire a customer. At the moment, I am paying $0.77 per click to my website. Assuming I can convert 2% of those clicks to my website, I'd be spending $39 to acquire 1 customer.

I realize that my website and ad are not perfect, so I don't expect to convert every other customer, but these numbers right now are obviously not profitable. Any advice? I'm sure other people have sold products in this price range using the same strategy (FB Ads --> Custom website) and have had much better success. Any advice?

The item I'm selling is good for FB imo, since it's something that would fall under the impulse buy category. Very similar items are selling on other websites too, so I don't think it's the product that is the issue.

facebook could be running a sham. they are claiming they have 83% of us population on their site now? LOL yeah right

 

[CycleGuy]

I'd run $10/day budgets. 1 adset per campaign, 2 ads per adset.

What's your copy ... post it and we'll give you feedback on it.

Only target mobile/desktop newsfeeds on Facebook only (no instagram, no audience targeting, no right hand side ads or instant articles etc.).

Show us one of your ads... we'll give you feedback on the image/ad title / ad copy etc.

This guy gets it.

FB ads only work if your copy appeals to your audience you're paying to reach.

Our timelines are filled with junk ads that you're competing against that most of us scroll past or hide. If you want it to work, put the effort into creative.

 

[BrooklynHustle]

This guy gets it.

FB ads only work if your copy appeals to your audience you're paying to reach.

Our timelines are filled with junk ads that you're competing against that most of us scroll past or hide. If you want it to work, put the effort into creative.

Agreed. You can get wildly different rates of effectiveness based on the quality of your targeting, copy and of course the image/video (formatting the copy as a story generally works great for me, as it tends to give FB the engagement it's algorithm loves)

If you're going to be using this as a primary channel, I would really invest in doing some training on how to do it right. Either that or hire a proven expert for a while so you can watch what they are doing and copy it/learn from it

Best of luck...

 

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[mclaren]

Are you running traffic directly from the ad to a product page?

This all comes down to your real conversion rate. All you gave us is a guess.

We can help you out but we don't know where (or even if there is an issue yet).

Give us all the numbers and we can help pinpoint the issue.

Right now it'd be a complete shot in the dark between fixing the:

• Ad
• Ad Targeting
• Landing Page
• Sales Price
  
• Backend flow (upsells, email followups, LTV, etc.)
• And more

I have ads that are getting 1 cent clicks and ads getting $2 clicks. Both are profitable.

So like I mentioned in the post before, I'm dropshipping this item. Supplier is selling for $6 with free shipping. I see other people are pricing this item around $25, so I started there.

The audience I'm targeting is around 830k people. Average CPC for the ads I've been testing is $0.84 with a ~1% CTR. FB says I have 70 unique clicks (been running since late last week) but 0 sales. I used a 2% conversion since that seems to be the general consensus. Spending $15/day testing. I'm sending the traffic directly to the product page. I've looked at how the competitors and other jewelry websites structure their pages, so I set mine up in a similar fashion. I think a big issue is trust. No body has heard of my website before so people are probably skeptical about buying from an unknown website.

 

[eliquid]

Looks like most people are telling you what I would tell you.

Low budget, limited ads, use the conversion settings, have upsells and cross sells and remarketing and also figure out how to do more with what you already have ( CTR, LTV, Conv. Rate ).