The inability to make advertising profitable is the reason many businesses rely on free channels like SEO, referrals, product-led growth, and social content.
Advertising channel costs
LinkedIn – $12-30 per click
Twitter – $4 per click
Instagram – $2.50 per click
Google Ads – $2+ per click, different for each keyword
Facebook – $2.50 per click
Pinterest – $1.50 per click
Snapchat – $1 per click
These numbers vary based on audience, ad quality, etc. I include them, but at least they give you a loose range.
Channel payment capabilities
Here’s how to figure out if paid channels azerbaijan mobile database are right for your business:
Let's say you're paying $3 per click on that funnel.
Assume that 1.25% of your website visitors buy your product.
Therefore, it cost $240 to acquire the customer. This is your cost per customer acquisition CPA for that channel.
Now, let’s say you charge a customer $50month for your product, and the customer pays for 5 months before churns or an average of $250. In either case, the average revenue per user is $250.
Assuming you have no other costs to serve the customer, you will make $10 in profit from this channel.
This profit may increase if the user repurchases in the future or invites others to purchase. In both cases, you should attribute the additional revenue to this channel's revenue.
Let’s say our paid channel is Facebook Ads. If your Facebook CPC goes up by just $1.50 to $4.50 — and your conversion rate doesn’t go up — you’re now paying $360 to acquire a customer. Suddenly, Facebook Ads are unprofitable.