If I wanted to get 500 people to buy a travel product how much would I need to spend on Facebook ads and remarketing from landing pages /database?

Hi there! Let’s figure this out.

My assumptions:

  1. Cost per 1,000 impressions (CPM) = $15 (this is an actual stat from recent advertising for a women-oriented travel site)
  2. Click through rate (CTR) = 1% (standard on Facebook)
  3. Conversion rate (CVR) = 5% (probably an overestimate, but let’s say you’ve got a great product)

The calculations:

To get 500 customers, you’ll need 10,000 clicks to your site (500 / 5%)

For 10,000 clicks to your site, you’ll need 1,000,000 impressions (10,000 / 1%)

You pay $15 for every 1,000 impressions. That’s $15,000. (1,000,000/1,000*15).

This puts your cost per customer (CAC) at $30 ($15,000/500).

TLDR:

I would budget at least $15k. Try doing some smaller tests with budgets of a few hundred dollars to find out what your real metrics are for CPM, CTR and CVR. Then you can make the final projections yourself using the same math.

Best of luck!

Written by

CEO @LightningAI, Demand Gen @Intercom, User Acquisition @MileIQ (acquired by Microsoft). Changing marketing through data science.

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