Measuring Cost per Acquisition of Facebook Ads is Easy, But What Do You Do With the Data?

Measuring Cost per Acquisition of Facebook Ads is Easy, But What Do You Do With the Data?

By Yonatan Rafael • June 11, 2015

You’re ready to roll out your latest acquisition campaign on Facebook. The budget is approved. The ads look amazing. You have a solid call to action that is clear and compelling. But you’re still wondering about things like: How will the campaign perform? How can I lower my cost per acquisition (CPA)? Are there other analytics I should keep an eye on so I can improve my campaign’s performance?

At Ampush, we hear these questions from our clients all the time, and we’re confident that we can provide the answers you need.

The Role of Attribution in CPA Trends

Advertisers are constantly trying to better understand the lift driven by ad spend. Which touch point is responsible for the conversion? What role did particular ads play in the customer journey? Establishing an attribution model is imperative to solving these questions.

In particular, the relationship between the time of click and/or impression, as well as the time of conversion sparks a lot of interest. Facebook attributes conversions to the day of the click and/or impression. Specifically, Facebook offers conversion tracking based on a 1-day, 7-day and 28-day post-click and/or post-impression model.

For example, let’s say Ampush drives $10,000 in ad spend for one of its travel clients and this results in 500 bookings on the same day (Day 1). Six days later (Day 7), Facebook reports 750 total bookings, or a 250 increase in bookings driven by Day 1 spend. In this example, we observe a backfill* rate of 50%, and a Day 7 cost-per-booking of ~$13.

What does that mean for Ampush customers? Experience and expertise allows us to anticipate how to plan for when CPAs might initially be higher than estimated because we know that the numbers will come down over time.

Follow the Weekly Trends and Plan Accordingly

Performance varies by day of the week. For example, people tend to plan trips early in the week and tend to install apps on the weekend. Understanding these nuances allows advertisers to allocate media budget more effectively. Ampush will identify a campaign’s specific weekly performance and design our ad launch and bid strategies to capitalize on a customer’s unique behaviors and ensure that each campaign is optimized.

Build a Portfolio of Ads to Create Cost-Effective CPA

Not all ads are cost-efficient. The majority of campaigns blend a portfolio of ads that as a whole come together to form a cost-efficient CPA. Understanding the composition of good ads, which will cost less than your goal, alongside any possible lower-performing ads (which will cost more) allows for additional testing and iteration of creative and targeting to meet client needs.

Know Your Bleeder Thresholds and Be Ready to Adjust

An ad needs to be paused if it has spent more than goal without obtaining an acquisition. This ad is known as a “spend bleeder.” But what if we can pause this ad before it spends that amount? We can! Ampush leverages historical data to determine a poor CTR and conversion rate for a campaign. That way, Ampush can spot and pause (if not stop) any under-performing ads before they become a problem.

Check the Effect of CPA on Spend

CPA goals dictate how much ad spend is available for each campaign knowing there will be efficiency constraints. We help our clients to better understand this issue, especially when so many levers are in play, but understanding a relationship exists is crucial. For instance, let’s say your goal is to obtain subscriptions at $50. Realistically, there is a maximum amount of volume obtainable at that goal. If the goal is raised to $100, the maximum amount of volume increases. Equally, if the goal is lowered to $30, the maximum amount of volume decreases. The point is, there are only so many users on Facebook that can be obtained when optimizing to a specific price.

While factoring in the seasonality of a day of the week, Ampush analyzes historical ad spend to consult clients on the effect of an increased or decreased goal on the amount of obtainable daily spend. Additionally, pairing projections with a pressure test, which is a rapid and sustained volume expansion to test reach and consistency of the current audience used, is ideal to prove the concept.

Lessons Learned

As you can see, CPA is the most accessible metric of your Facebook ad campaigns. But how do you improve that performance outside of testing targeting and creative? Our team of experts at Ampush can assist you to make sure your next Facebook ad campaign is effective and delivers the results you need. Contact Ampush sales to get started.

 

*Backfill definition: The rate at which conversions come in after Day 1 of a particular media spend. Calculation: Fully baked conversion (based on attribution window)/Day 1 conversions – 1.