Before starting you need to predetermine 2 objectives. Your gross profit per single transaction, and the number of consumers or leads you desire to obtain in a single month or year. (if you are not immediately selling an item try to calculate an amount you'd be willing to pay for a lead).
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Estimated conversion rate. We recommend you start with .04 (4%). It is possible to obtain higher than 4% but a safe and conservative number is .04. The conversion rate is factored by dividing the number of site visitors, generated by a given campaign, by the number of consumer purchases or leads produced.
Estimated click through rate (CTR). We recommend you also start with .04 (4%). It is possible to obtain greater than 4% but once again this is a safe number to utilize in your planning process. CTR is factored by dividing the number of impressions (people reached), generated by a given campaign, by the number of consumers that click the (CTA) button from your campaign.
Frequency Rate. We recommend starting with no less than 3 times for pay per click (PPC) campaigns. People don't necessarily respond to your ad the first time they see it. As a result, you need to have to build into your plan a strategy that will obtain repeated impressions into your target audience.
Cost per consumer reached (impressions). We recommend starting with .01 ($0.01). Facebook provides two methods for calculating how you are charged. Pay per click (PPC) is the most common and the default selection in most FB campaigns. The other option is Cost per impression (CPM). For this section of the Facebook Campaign Calculator we asking you to provide an estimated amount that will be charged when the campaign bills for CPM. This is between .01 and .04.
Pay Per Click. There are a number of factors to consider when determining how much you are willing to pay per click. A bid too low may cause your ad campaign not to be seen by your target audience. A bid too high may deter you, during the planning stages, from deciding if Facebook advertising is right for your business. Facebook does provide automatic bidding that is designed to maximum your options for the best result. We recommend using an estimate of 1 ($1.00) and then reviewing the overall profit result. If the end result of the cost per click greatly reduces your profits then you need to adjust the cost per click (try 0.50 or lower). We advise you to try and keep the cost per click result as close to the cost per impression for best results.