SSA #031: Don't Ignore This Facebook Ads MetricAug 05, 2023
Read Time: 3.5 Minutes
You've likely heard me talk about the importance of Conversion Rates and Cost Per Sale when measuring the performance of your Facebook Ads.
And they are very important, without a doubt.
But one metric I haven't touched on too much is Cost-Per-Click.
You may have heard statements around the topic of Cost-Per-Click such as:
"The only metric that matters is Conversion Rate, Cost Per Sale, Lifetime Value, etc."
"It doesn't matter if your Cost-Per-Click is $0.10 or $2.50, as long as you're profitable.
And, whilst there is some truth to these statements, Cost-Per-Click (which I'll now refer to as CPC) matters more than you might think, and in today's newsletter, we'll discuss why, and what you can do to reduce your CPCs.
What is Cost-Per-Click?
CPCs are telling you how much you are paying, on average, for a single click on a specific Facebook Ad, Ad Set or Campaign.
The lower your CPCs, the more clicks you'll receive for your budget.
The higher your CPCs, the fewer clicks you'll receive for your budget.
So, it goes without saying that lower CPCs, are crucial because you will generate more traffic to your books.
That's not to say that you'll generate more sales, because the quality of those clicks matters a lot too.
But, in general, focusing on lowering your CPCs will help you reach more readers.
However, an important point to note here is that lower CPCs don't always equate to more sales.
You could have $0.10 CPCs and a 0% conversion rate, for example, which would be a colossal waste of money.
This is why you should always take a holistic approach to your Facebook Ads and consistently be looking at The Big Picture.
In a recent edition of The Saturday Self-Published Author, I shared a case study of my own Facebook Ads that, whilst they looked great in the Facebook Ads dashboard (lots of spend, low CPCs, high CTRs, etc.), were converting terribly, and we ended up losing around $400 in a week.
You can read the full edition of the newsletter here: Trojan Horse Facebook Ads
How To Reduce Your CPCs
The biggest lever you can pull to lower your CPCs is simply creating better Facebook Ads (i.e. the Ads people see on their Facebook Feed).
Easier said than done, right?
But by simply analyzing your previous Ads and looking at the Ads that generated lower CPCs, you will soon learn what causes those lower CPCs and do more of that, whilst simultaneously doing less of what you identify causes higher CPCs.
To give you some actionable context around this, from the 1,000's of Ads I've run over the years for books in various genres, the leading cause of high CPCs I've come across is using book mock-ups in Facebook Ads images, like this:
Now I have spent enough to know that these types of images cause high CPCs, I no longer use them (although I will occasionally test this theory from time to time, as Facebook Ads change frequently).
Instead, I use images that have no book mock-up within them at all, more like these:
CPCs Whilst Scaling
One of the inevitable side-effects of scaling Facebook Ads (or any advertising in general, for that matter) is that the more you spend, the higher your costs will go.
This happens because, as Facebook starts targeting people outside of your ideal reader profile (i.e. the perfect readers for your books – lowest hanging fruit), it's going to become more and more expensive to acquire these people as customers – because they're not your ideal audience.
That's not to say that these people won't buy your books, because a good percentage of them will.
But it's potentially going to be a harder sell.
So, as you scale your Facebook Ads (i.e. spend more), and your CPCs inevitably rise and ROAS (Return on Ad Spend) goes down, it's going to become even more important to keep your CPCs as low as possible, without sacrificing the quality of the readers who are clicking on your Ads.
And you do this by:
- Testing new Ad creative regularly
- Analyzing the data of previous Ads
- Running Unrestricted Targeting
I teach you how to run Facebook Ads that tick all these boxes inside Jumpstart Facebook Ads For Authors.
Let's Look At A Couple of Scenarios
Daily budget: $20.00
Average CPC: $0.50
Daily Clicks: 40
Conversion Rate: 7.5%
Daily Sales (from Ads): 3
Daily budget: $20.00
Average CPC: $0.20
Daily Clicks: 100
Conversion Rate: 5%
Daily Sales (from Ads): 5
As you can see, despite the small numbers here, even with the lower conversion rate of Scenario #2, you are still generating more sales AND getting more eyeballs on your books.
And remember, people don't always make an impulse purchase, even on a low-cost product such as a book.
They may see your book, but not buy it for a week or two, until they've finished reading the book they're currently reading.
You also need to consider brand awareness, brand recognition, word-of-mouth marketing, building your email list, and all the other nuances that go into building your author business.
In conclusion, yes, Conversion Rate and Cost-Per-Sale are important metrics to track, but CPCs have a direct impact on how many readers you can reach with your Facebook Ads.
So, focus on bringing those CPCs down, and, providing those Ads are converting well, you'll start to see a huge improvement in the success of your Facebook Ads.
That's it for this one.
Thanks for reading and I'll see you again next week.
To Your Success