Facebook Money – An Example

Now, let’s do an example using the offer from Paydotcom.com above:

Let’s say you have a daily ad budget of $25. Here you get paid a commission of $14.98 for every conversion, therefore you need at least 2 conversions to make a profit (2x $14.98= $29.96 – $25= $4.96 profit).

Can you answer these questions?

• What is the most you should spend per ad click if the conversion rate is 2% (in an average 2 people out of 100 will convert)?

Answer: 29 cents.

The reason: With a 2% conversion rate you will need 50 clicks for 1 and you are paid $14.98 per conversion so you should not spend more than 14.98/50 = 0.2996 or 29 cents per click. (This would allow you to break even. So you should set your cost per click at less than 29 cents to make a profit.) Also, remember that this is just an example, conversion rates change all the time, so therefore, you could still make a profit if your cost per click was 29 cents and the conversion rate moved to 4% in real life.

• What is your return on your investment (ROI) if you make 3 conversions and the daily budget is $25?

Answer: 79.76%! (Can you make that in the stock market?)

The reason: 3 conversions x $14.98 = $44.94 in revenue. $44.94 – $25 budget = $19.94 in profit. Profit divided by Budget gives the ROI, so, 19.94/25 = 0.7976 or 79.76% return on investment!