I have started doing Facebook Ads, and my cost per click is over 1 dollar. After some calculation, if I have a conversion rate of 2 % then every 50 dollars spent on Facebook ads will generate a sale. It means that my profit margin should at least be over 50 dollars, and that is definitely not possible with my products. Does anyone have some thoughts about this, are the cost per click to high and is it anyway to lower it? Over 1 dollar per click is for me a very high amount, at least if they leave after 2 seconds...
How do you generate traffic with ads for the lowest cost as possible?
I guess you're using CPM (paying for impressions) and automatic bidding on Facebook. In this case, the cost per click can be really high. If you can't afford that, you can try to play with a different bid values with manual bidding and objective settings in order to lower the CPC. However, the automatic bidding usually works quite well in the term of finding customers who are the most likely to buy and it's possible that your conversion rate will lower if you turn it off.
Finding the best advertising strategies is hard, costs money and it requires a lot of testing. I cannot say whether Google AdWords or Facebook will work better for you. As you can check here, both of them have their advantages and disadvantages and it could hold you back if you focused on just one of them.
Google ads are usually considered to be hard to set up and most of the new shop owners are starting rather with Facebook ads but I think it would be worth to give it a chance. Here's a short introduction to how Google ads work and what they can do for you.
Great post, thanks for writing!
Our agency gets this question a lot, so I wanted to offer my $0.02:
Bidding style can have a profound impact on driving conversions, and unfortunately, a lot of companies do it wrong.
Like many digital advertising considerations, the bid strategy you pick depends considerably on your company’s budget. For small levels of spend, automatic bidding can be the best route. However, our experience and Facebook's recommended best practices strongly suggest that when your budget exceeds a certain level, manual is the best option.
Generally, to get the best performance from manual bidding, your daily budget should be 25X the bid you have set.
Anyway, we blogged about this in detail if you want to learn more: https://bit.ly/2L4XZPa
Hope that helps!