Work out five numbers before you open Ads Manager, because they decide your budget, your bid and whether a campaign is viable at all.
- Gross margin per sale. What you keep after the cost of the product. This, not revenue, is what pays for advertising.
- Allowable CPA. Gross profit per customer multiplied by your payback tolerance. If you make 60 euro of profit on a first order and you are willing to break even to acquire, your allowable cost per acquisition is around 60 euro. Strong repeat purchase lets you pay more up front.
- Conversion rate. Of the people who click, how many buy. This is a landing page and offer problem as much as an ad problem.
- Average order value. Which sets what a conversion is worth.
- Payback period. How long until a customer repays what you spent acquiring them. This decides how aggressive you can be.
If the arithmetic does not work at your allowable CPA, no campaign structure will save it. Fix the offer or the margin first. That sounds like a platitude until you have watched a store spend a quarter's budget discovering it.
The break-even calculator turns these into a target CPA and ROAS, and the budget guide turns that target into the daily floor your account needs to learn at all.