Calculate Cost Controls for Facebook Ads

Business benefits

Increase the ROI of your adspend.

Choose from three recommended Cost Controls: Cost Per Result Goal, ROAS Goal, and Bid Caps.

Use Cost Per Result Goal to generate the highest volume of purchases at a target CPA.

Use ROAS Goal to generate the highest value of revenue at a target ROAS.

For example, this might try to get you higher dollar purchases, whereas cost control might try to get you a higher volume of lower CPA purchases.

Avoid using Bid Caps in testing stages.

Use a Cost Calculator to determine your customer acquisition cost and develop a CPA target to use for a Cost Per Result Goal.

Using a cost calculator will help you accurately determine your CPA target that can be used for a Cost Per Result Goal. You can use this spreadsheet or your own calculator.

Identify the value of your ad spend using aMER = Total New Customer Revenue / Total Ad Spend.

Identify where profit lies in your business, understand where your goal is, use that info to develop a CPA target and then make that your cost cap and spend your budget accordingly.

@hesh_fekry @tania - This course didn’t have much information to pull. Most of it uses an example of an existing company without explaining the details. I could split the first step into 3 but it’s still thin and I don’t think very valuable. I considered combining with another part of the course but it’s not relevant to the rest of it. Just wanted to gather some thoughts and feedback.

This is the course:

https://cxl.com/institute/lesson/generating-quantity-utilizing-creative-volume-and-cost-controls-to-win/

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@chad_wyatt - Happy to help. I took this first bit of the course just now to gain a better understanding.

The instructor isn’t asking you to choose between the three Cost Controls given. He recommends Cost Caps (the Cost Per Result cost control) goal because he thinks it’s the place to start for most brands. He then breaks it down like so:

  1. Cost Caps tells Facebook Cost Controls that hey, I am willing to have a customer acquisition cost (or Cost Per Acquisition) of x. Cost Caps helps you get the highest volume of purchases at that target CPA.
  2. To determine what that target CPA should be, you use the cost calculator to determine it.
  3. The calculator specifically looks at what your current costs are, where your sources of revenue come from, to give you as accurate an answer of what the target CPA should be.

So this part of the course, in playbook form, should help walk me through using the resource sheet provided to determine my target CPA. Input that target CPA into Cost Caps aka Cost Per Acquisition in FB Cost Controls. All to get optimized spending on my ads, with help of FB’s machine learning.

That’s what I got from it, hope this helps. :slight_smile:

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@chad_wyatt

Whats the example saying about this? is it something we can include or is it a bit all over the place and unspecific?

In response to @tania 's feedback here. You could combine the choice element and the recommendation.

Choose between XYZ option. For most choose X because bla bla bla.

Could you breakdown the steps of using the spreadsheet more? does he go into it?

Lets see where we are after the example and this. maybe its just an exception.

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@hesh_fekry he doesn’t go into any detail with the spreadsheet - only “you can dive into that, there are notes to help you” - which are links to blog posts and calculators - but then the playbook becomes calculating CPA etc.

Ah. Then maybe its just an exception. Its rare a playbook is so thin and does the job. If you feel it actually does…then lets keep it.

I would address the choice/recommendation thing though. We should keep true to the course content by recommending the chosen control, but perhaps qualify it, like we do with any choices in playbooks, by outlining the others like you have done and give reasons why it was chosen. That may help give a bit more weight here.

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@chad_wyatt worth revisiting this and adding the examples please. See comment on write headlines for facebooks ads playbook.