In the last blog post, you got to learn some of the key metrics in Facebook Advertising and why they matter. In the next few blog posts, we’ll start to go through an example sales funnel in order to cement what you’ve learned into your minds and further your knowledge. You’ll get to see a couple of those key metrics in action and also understand how to optimize these for a successful ad campaign. I’ll also point your attention to some of the most common mistakes I see people make time and time again when using Facebook Ads.

Let’s get started.

So in this example sales funnel, we have a Product Price Point of $1000. Our Webinar Sales Conversion Rate is 5%. This means that 5% of the people that attend the webinar actually go on to buy the product in question.

In order to get people to attend the webinar, we have a registration page set up beforehand. Our Webinar Attendance Rate is 40%. That means that at least 40% of all the people that register will turn up at the webinar. And our Webinar Registration Page Attendance Rate is 10%. So, at least 10% of the people that end up on your registration page will end up registering. And finally, your CPC/CPV is $1.

Carrying on from the example above, say you invested in 100 clicks. This means 100 visitors. And at a 10% Registration Rate, you get 10 registrants. These 10 registrants cost you $10 each ($100 spent on clicks /10). And because only 4 of your registrants will end up at your webinar, that makes your cost per attendee $25.

Now here comes the important part. Your Webinar Conversion Rate is 5%. With only 4 attendees, is it likely that you’ll get any sales? Probably not. But does this mean your webinar doesn’t work? The correct answer is we still don’t know. And this is despite getting no sales. Why’s that? Because with only $100 dollars invested and 4 people attracted to your webinar, your conversion data is not large enough to be statistically significant.

This is a mistake I see very often. Many people will invest too little in the beginning and not get any sales. Then, they get scared of overspending and choose to cut off the campaign, not realizing that they are in fact underspending and generating too little data in order to accurately judge their campaign’s effectiveness.

The simple truth is that with expensive products (and remember that we like products with higher prices) you need to invest more in order to get the relevant data you’ll need to turn this campaign into a success. Underspending on your ads is a critical mistake which can give you the wrong impressions of your campaign, hurting you in the long run. You may be sitting on a gold mine, as we’ll soon see in the next blog post.