Is My Marketing Doing Anything? 2018 Facebook & Google Ad Campaign Benchmark Report

1. Is My Marketing Doing Anything? 2018 Facebook & Google Ad Campaign Benchmark Report

2. $1.5 billion We analyzed over $1.5 billion in ecommerce transaction data... www.wickedreports.com

3. The following report is an depth-look at how the average Facebook and Google campaigns perform over time. Use this a north star to compare your own campaigns against, and to understand why and how to make certain decisions with your marketing dollars. www.wickedreports.com

4. Facebook Benchmarks www.wickedreports.com

5. EPL Average Earnings Per Lead Key Insight: Day 14 = Leads worth 38% more than Day 1 Day 60 = Leads worth 125% more than Day 1 Day 365 = Leads worth 309% more than Day 1 What This Means: Campaigns become more successful the longer they run, generating significantly more valuable leads as time passes.

6. LPC Average Leads GeneratedPer Customer Key Insight: Day 1 = 18.58 LPC (18.58 Leads to generate 1 Customer) Day 30 = 15.1 LPC Day 60 = 12.8 LPC What This Means: It’s only somewhere between Day 120 and Day 365 that the LPC ratio drops to single digits, at 8.63 Leads Generated per Customer on Day 365. In the first week of a campaign, expect to say to yourself, “We’re doing something wrong” as only 5.7% of leads generated convert to customers. But be patient, and you should be happier with your results over time.

7. ROI Average Campaign Return On Investment Key Insight: The average Facebook campaign doesn’t make money! Starting off, the average campaign ROI is -82%, and it takes more than 4 months to get ROI better than -50%! What This Means: The average campaign isn’t being optimized and run successfully. This underscores the importance of data-based decision-making. Expect to generate real leads right away, but for customers to take time to make a purchase and campaign ROI to be a long journey.

8. CPL Average Clicks Per Lead Key Insight: Facebook campaign click to lead ratio drops over time. Day 1 = 24 ClickPL (24 Clicks to generate 1 lead) Day 30 = 16 ClickPL By this time, the average campaign generates 104 leads in total. What This Means: If you want sales immediately, temper your expectations appropriately. If we cross-reference this information with our LPC (Leads generated Per Customer) benchmark, we see that on Day 1 it takes 24 clicks to generate 1 lead, but it also takes 18 leads to generate 1 customer.

9. CAC Average Customer Acquisition Cost Key Insight: Average Customer Acquisition Cost drops $200 over the course of a year. What This Means: Customer Acquisition Costs steadily decrease (meaning an improvement in performance) over time. This is likely due to Facebook’s targeting algorithm improving the longer a campaign runs.

10. R Average Revenue Key Insight: This chart shows the aggregate revenues generated over time across all Facebook campaigns tracked by Wicked Reports. The average campaign makes 1,448% more revenue on Day 30 than Day 1. What This Means: As is the consistent theme, patience is a virtue. Revenue should not be the Day 1 Goal. Give your campaign time, and with the right data in front of you, you can make decisions to see revenue growth later on.

11. % Average Campaign spending Key Insight: Facebook campaign spending drops considerably after Day 1. Day 7 = 119% decrease Day 30 = 314% decrease What This Means: Rather than continue to spend the same amount over time, the average campaign cuts the budget early on. This indicates a lack of confidence in a campaign. You should cut spending ONLY IF the campaign is actually underperforming. As we’ve seen from the other benchmarks, though, campaigns actually improve over time. Keep this in mind when you consider adjusting your own campaign spend.

12. CPL Average New Lead CPL vs Existing Lead CPL Key Insight: Day 1 = $62.21 New Lead CPL Day 1 = $50.96 Existing Lead CPL Day 30 = $38.92 New Lead CPL Day 30 = $50.49 Existing Lead CPL What This Means: After only a month, it costs more to reactivate an existing lead. This is likely because you’ve now asked for a higher commitment from them, such as request a demo, watch a webinar, download an ebook, etc, so naturally some people won’t follow through. This is actually a good thing, though, as you’re weeding out low value leads and finding your high value leads.

13. LTV Average New Lead LTV vs Existing Lead LTV (LifeTime Value) Key Insight: Day 1 = $74.61 New Lead Avg LTV Day 1 = $152.10 Existing Lead Avg LTV Day 365 = $184.77 New Lead Avg LTV Day 365 = $206.78 Existing Lead Avg LTV What This Means: Out of the gate, existing leads carry a significantly higher LTV than new leads, and it takes a full year for that gap to really shorten. While your Existing Lead CPL may always be higher (from previous chart), you’re generating a higher LTV as well. Be aware--If you aren't excluding your existing leads when running ads to cold traffic, then existing leads are likely contributing to an overall better performance on a cold traffic campaign. This contributes to the failure to scale cold traffic campaigns overall. Segmentation matters!

14. Google AdWords Benchmarks www.wickedreports.com

15. EPL Average Earnings Per Lead Key Insight: Day 14 = Leads worth 73% more than Day 1 Day 30 = Leads worth 173% more than Day 1 Day 60 = Leads worth 174% more than Day 1 After Day 30, growth continues but at a steadier pace. What This Means: Similar to Facebook, Adwords campaigns become more successful the longer they run, generating significantly more valuable leads as time passes.

16. LPC Average Leads GeneratedPer Customer Key Insight: Day 1 = 23.3 LPC (23.3 Leads to generate 1 Customer) Day 30 = 14.07 LPC Day 60 = 12.8 LPC What This Means: It’s only somewhere between Day 120 and Day 365 that the LPC ratio drops to single digits, at 7.31 Leads Generated per Customer on Day 365. Similar to Facebook, in the first week of an Adwords campaign, expect to say to yourself, “We’re doing something wrong” as only 4.5% of leads generated convert to customers. But be patient, and you should be happier with your results over time.

17. ROI Average Campaign Return On Investment Key Insight: Unlike Facebook, the average Adwords campaign DOES make money, and quick! By Day 14 revenues exceed cost, and continue to rise. Day 30 = +78% ROI Day 60 = +127% ROI Day 365 = +265% ROI What This Means: Don’t expect ROI on Day 1, but you don’t have to wait very long (14 days) to see a small ROI, followed by a spike over the next few months. AdWords campaigns likely show better ROI than Facebook because there is typically already buyer intent with AdWords, whereas you have to generate interest with Facebook. Also bear in mind the average campaign spend is much lower on Adwords.

18. CPL Average Clicks Per Lead Key Insight: Day 1 = 27 CPL (27 Clicks to generate 1 Lead) Day 30 = 17 CPL This is very consistent with Facebook. What This Means: Sales will be slow on Day 1, as Lead Generation is slower, but it will pick up quickly. If we cross-reference this information with our LPC (Leads generated Per Customer) benchmark, we see that on Day 1 it takes 27 clicks to generate 1 lead, but it also takes 23 leads to generate 1 customer. This is slightly more leads needed than Facebook’s 18 LPC. Also remember the average campaign sees ROI after only 14 days.

19. R Average Revenue Key Insight: This chart shows total revenues generated over time across all AdWords campaigns tracked by Wicked Reports. The average campaign makes 554% more revenue on Day 7 than Day 1, and 3331% more on Day 30. What This Means: The AdWords mantra is really, “After 14, you’re in the green.” Thus far the data shows significant turning points in EPL, LPC, ROI, and now Revenue. If you’re willing to wait only 2 weeks with an AdWords campaign, the odds are in your favor.

20. CAC Average Customer Acquisition Cost Key Insight: Average Acquisition cost drops about $380 over the course of a year. What This Means: Customer Acquisition Costs steadily decrease (meaning an improvement in performance) over time. Similar to Facebook, this is likely due to Google’s targeting algorithm improving the longer a campaign runs.

21. % Average Campaign spending Key Insight: Facebook campaign spending drops considerably after Day 1. Day 7 = 119% decrease Day 30 = 314% decrease What This Means: Rather than continue to spend the same amount over time, the average campaign cuts the budget early on. This indicates a lack of confidence in a campaign. You should cut spending ONLY IF the campaign is actually underperforming. As we’ve seen from the other benchmarks, though, campaigns actually improve over time. Keep this in mind when you consider adjusting your own campaign spend.

22. CPL Average New Lead CPL vs Existing Lead CPL Key Insight: Day 1 = $31.41 New Lead CPL Day 1 = $45.04 Existing Lead CPL Day 30 = $16.61 New Lead CPL Day 30 = $33.10 Existing Lead CPL What This Means: Out of the gate, it costs more to reactivate an existing lead. This is likely because you’ve now asked for a higher commitment from them, such as request a demo, watch a webinar, download an ebook, etc, so naturally some people won’t follow through. This is actually a good thing, though, as you’re weeding out low value leads and finding your high value leads.

23. LTV Average New Lead LTV vs Existing Lead LTV (LifeTime Value) Key Insight: Day 1 = $150.29 New Lead Avg LTV Day 1 = $294.04 Existing Lead Avg LTV Day 365 = $160.80 New Lead Avg LTV Day 365 = $278.11 Existing Lead Avg LTV What This Means: Out of the gate, existing leads carry a significantly higher LTV than new leads. Surprisingly, this gap is almost entirely made up by Day 30, but the gap then widens again, almost returning to its starting point by Day 365. DO NOT measure the effectiveness of Existing Lead reoptin solely on cost, as these always carry a higher LTV than new, cheaper leads. Also be aware--If you aren't excluding your existing leads when running ads to cold traffic, then existing leads are likely contributing to an overall better performance on a cold traffic campaign. This contributes to the failure to scale cold traffic campaigns overall. Segmentation matters!

24. Final Thoughts & Recommendations www.wickedreports.com

25. AdWords tends to perform better than Facebook. However context is key, and we believe this happens for two reasons: 1 2 AdWords is a more sophisticated platform than Facebook, in terms of usability. The Facebook Ad user interface is incredibly simple, and anyone can get started with it. Whereas AdWords typically requires hiring or outsourcing an SEO specialist. When specialists are at the helm, they know not only how to use the platform, but how to use it well. Facebook is not a platform people come to looking for products. Google serves that exact purpose. Keep that in mind not only as you determine your spend, but also in how you write your ad copy on each platform. www.wickedreports.com

26. Data-driven decision-making means not just looking at the numbers, but looking at the right numbers at the right time. In the early stages of a Facebook campaign, look for Clicks. As time passes, focus on Leads. After Leads come in at a steady rate, shift your focus to Revenue and Earnings Per Lead (EPL), and be sure your Customer Acquisition Cost is declining. Conversely, after 14 days of an AdWords campaign monitor your ROI, and continue to use that as your primary metric to indicate campaign performance. www.wickedreports.com

27. I N C L O S I N G The eCommerce industry has drastically transformed in the last several years. Artificial Intelligence, improved tracking and targeting algorithms, and data now shape the industry. To succeed, your company needs to be proficient not in understanding how all of it works, but proficient in staying on top of what it means, so that you consistently use your data to generate insight, and make smarter decisions. www.wickedreports.com

28. In the wake of this next generation of eCommerce, Wicked Reports can help you stay on top, and ahead of, the curve, giving you real-time insight to make the right decisions, at the right time. Schedule a demo at wickedreports.com/demo www.wickedreports.com