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4 Ways to Reduce CAC with Facebook Ads

28/09/2018
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Do you optimize your Facebook ads to acquire more customers?

Wondering how to reduce Customer acquisition costs (CAC) to scale campaigns?

In this article, you’ll learn 4 ways to reduce your customer acquisition costs.

What is CAC?

The customer acquisition cost (CAC) is the metric used to find the total average cost your company spends to gain a new customer.

Set Up Your Ads Manager Dashboard to Calculate CAC

First, open your Facebook Ads Manager dashboard and ensure you’re checking right data, login and sort your conversion based on the last 7 days. This data gives you a fair outlook on how your ad campaigns have been performing.

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Next, select Performance and Clicks from the Columns drop-down menu.

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To improve your data, click the Cost per Result column to sort your ad sets based on cost per result. So, the highest cost per result is shown at the top.

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Now you can see which ad sets have high customer acquisition costs. And, stop any ad sets with a cost per result that’s at least double your estimated costs.

1) Improve Facebook Ad and Landing Page

You have to work out which ad sets have been delivering customers at a reasonable cost, after that check if your click-through rates (CTR) in ad sets are performing well.

In your dashboard, select the Ad Sets section, scroll to the right and pick the CTR (Link Click-Through) column.

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This data allows you to see how many people have clicked through the ad to reach your landing page.

A typical key performance indicator (KPI) is to reach at least a 1% CTR. If your KPI is less than this, your ad isn’t attractive enough or you’re not targeting the right audience.

For example:

Wishpond ad and landing page

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Landing Page

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Note: You have only 8 seconds to capture your audience’s attention after they click your ad.

To rule with the lowest possible customer acquisition costs, you need to find the combination of landing page features that deliver the most conversions.

2) Target New Sectors with Lookalikes Audience

Here are a few things you can do optimize your ads more:

First, make sure you set up your ad split tests properly.

Next, target your ads to a new audience. You could use Audience Insights to research another audience to target, and you can create new audiences through lookalikes.

To create a lookalike, first set up your website custom audiences.

Next, Open Ads Manager and select Audiences under Assets.

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After that, click Create Audience and select Custom Audience

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In the next window, select Website Traffic.

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Now create custom audiences of people who have visited your website in the last 30 days, 60 days, 90 days, and 180 days.

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After creating a set of custom audiences, you can use them to create lookalike audiences.

In your Audiences dashboard, click Create Audience and select Lookalike Audience.

In the Create a Lookalike Audience window, select your website custom audience, a location, and an audience size.

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In addition to website custom audiences, you can also test other types of custom audiences (and lookalikes).

Select the Include LTV for Better Performing Lookalikes option, if you want to get more subscribers at a lower cost per result. This option allows you to target lookalike audiences that with the highest lifetime value.

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3) Combine Your Lookalike Audiences with Interest Targeting

If your interest targeting is too broad, your customer acquisition costs could be high.

To narrow your audience, select your lookalike audience and your interest-targeting ad sets

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After that, Facebook will deliver your ads to customers who are involved in your interest targeting and 1% lookalike audience.

4) Scale Your Budget Successfully

The most common mistake is increasing your daily advertising budgets too high after seeing exciting initial results.

To keep your cost per result, consider rising your budget by 20% to 30% daily. So, you can efficiently scale your ads while still gaining subscribers at optimum costs.

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