# What is a good average CPC

## The simplest formula for rating Facebook campaigns

### Scoring Facebook campaigns can be very simple

Martin Smith, CEO of Overflow Marketing Solutions, presents his concept at Entrepeneur, with which he evaluates Facebook campaigns. He breaks the whole thing down to a calculation with just two sizes: CPA .

CPA means the cost per acquisition, i.e. costs per new customer acquired. AP means Average Profit Per Client, i.e. average revenue per customer. The principle is simple and certainly not new. If the cost of a generated customer is lower than what you earn from them, the campaign is profitable.

You can calculate the average revenue per customer by adding up the sales with new customers and then subtracting the costs that went into them. You divide the result by the number of new customers. This is perhaps greatly simplified, but can be implemented for most business models. It is important not to set the time span too short when calculating sales. After all, customers can spend money with you multiple times. Smith therefore recommends including a customer relationship of at least six months in the calculation.

With a turnover of 100,000 euros and costs of 75,000 euros from a total of ten customers, we would therefore have an AP of 2,500 euros. Smith emphasizes that not everything should go into customer acquisition, but recommends a value between 7 and 15 percent for marketing and sales. At a realistic 10 percent, we come to 250 euros AP.

• Click-Through Rate (CTR) ~ 1 percent on average
• Cost Per Click (CPC) <3 dollars, i.e. the equivalent of 2.60 euros
• Lead Conversion Rate (LCR) > = 20 percent
• Sales Conversion Rate (SCR) > = 5 percent

The average values ​​vary depending on the industry. Smith used official benchmarks as a guide.

Let's assume that 20,000 people receive an advertisement for your website. That results in 200 clicks. With a CPC of 2.00 euros (for the sake of simplicity) that makes 400 euros that you paid. 20 percent of the 200 clicks means 40 leads, two of which become customers. So you spent a total of 200 euros per customer. According to the formula CPA