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CTC @ UCI: How To Set Performance-Based Marketing Budgets
- 1. P R E PA R E D F O R UCI 03/15/17 B u i l d i n g F o r S c a l e : H o w To S e t P e r f o r m a n c e B a s e d B u d g e t s
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- 17. F i x e d B u d g e t P e r f o r m a n c e B u d g e t
- 18. W h y O p e r a t e O n A P e r f o r m a n c e B a s e d B u d g e t ?
- 19. R e d u c e s R i s k + I n c r e a s e s U p s i d e
- 20. A l l o w s Yo u M a x i m i z e T h e F u n c t i o n a l i t y O f Yo u r To o l s
- 21. R e m o v e s C r y s t a l B a l l P r o j e c t i n g
- 22. A c c e l e r a t e s P r o d u c t M a r k e t F i t A n d I n c e n t i v i z e s Te s t i n g
- 23. F o c u s e s O n T h e “ R i g h t G o a l s ” A n d P e r p e t u a t e s F i n a n c i a l H e a l t h
- 24. H o w d o y o u b u i l d a p e r f o r m a n c e b a s e d b u d g e t ?
- 25. I d e n t i f y A G r o w t h S t r a t e g y p r o f i t v s . c u s t o m e r s
- 26. What is the cost of 1 unit (fulfilled all the way to the customer) U n d e r s t a n d Yo u r U n i t E c o n o m i c s Operating Cost Of Necessary Functions Of Sale Units/Order Average Order Value Fuel Profit COGS
- 27. S e t Yo u r C PA Fuel Profit ($) “Goal” Profit ($) Target CPA ($)- =
- 28. 15 Purchases CPC Conversion Rate AdSpend X = .8%X = $1 AdSpend ~$2,000/Ad Set To Determine Viability Average CPC = $1 Average CR = .8% 15 Purchases To Optimize D e t e r m i n e T h e C o s t O f V i a b i l i t y
- 30. Growth Strategy Goal: Maintain a 40% Net Result On Customer Acquisition
- 31. Unit Economics 1.7 $40 $7 QALO $28 What is the cost of 1 unit (fulfilled all the way to the customer) Necessary Operating Costs Units/Order Average Order Value Fuel Profit COGS
- 32. Target CPA $12 Using FB Default 28 day click and 1 day view Fuel Profit ($) “Goal” Profit ($) Target CPA ($)- = $28 $16
- 33. Ad Spending By Month 0 20000 40000 60000 80000 Ad Spend January August $300 $80,000
- 34. T H A N K Y O U