How To Calculate Target CPA: Shopify & Facebook Ads Tutorial 2023

SUMMARY OF VIDEO

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Hey! If you’re new to the channel, my name is Nick Theriot

I’ve been running Facebook ads since 2015 and have done over $50m in revenue for our clients. We work with a variety of brands but the majority or e-commerce!

Welcome to my latest tutorial video where I'm going to be walking you through how to calculate your Target CPA for Shopify and Facebook Ads in 2023.

As someone who has run countless successful ad campaigns, I know how important it is to set the right CPA targets in order to maximize your ROI and drive conversions.

In this video, I'm going to show you step-by-step how to calculate your Target CPA, taking into account important factors like ad spend, conversion rate, and customer lifetime value.

Whether you're new to Shopify and Facebook Ads or looking to improve your targeting strategy, this video is packed with valuable information that you won't want to miss.

So grab a pen and paper, and let's dive in!

#Facebookads #facebookadvertising #facebookmarketing

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- Nick Theriot

[hafezaazizi]

i saw the vidro more than 10 times, so much hard, i have to understand it, thank u my love

[victorslishkov]

Thank you so much for the sheet, Nick! The more I delve into ecom, the more I am convinced that if a person wants to succeed in this business and has some basic knowledge, then it is enough to watch only your channel and that of Carl Weische. You both implement the knowledge from Eugene Schwartz's book, you for ads, he for pages, and so the whole circle is closed. It will be super helpful for a lot of people to see more videos and examples of how his knowledge is being applied in Facebook ads these days.

[LukaszS]

Hey Nick, have you considered adding in expenses like taxes/sales VAT, payment processor fees when calculating Breakeven ROAS? This ensures a more comprehensive and accurate foundation for ad sales metrics.

[erictan]

Hello Nick so as a business all we have to do is to understand what is the desire "(Day One) Profit $" assuming $10, 000 expenses per month and all we have to do is to find out the NC ROAS that is the safety line and scale the heck out of it leaving any campagin within that NC ROAS on as most of the profit happens at recurring right? (I run a subscription based business)

[LuisLondonG]

Thanks for the sheet, it will help to figure out the tCPA.

[mac]

This video gave me a massive mindset shift, ive never actually done the math on return customers value and always calculated profitability on face ROAS. considering my return customer rate is 30%+ and AOV is $110+ i feel like a damnm idiot! Thankyou!

[maxfe]

Hi Nick great video man quick question. Do you look at blended CPA or just FB CPA when determining whether or not to scale?

[fredkh]

Do you have a video on how to scale an adset? 20% a day best way?

[kaustubhchavan]

What font are you usign in the begning for the subtitles

[bravo]

Cool vid man, Definitely need to get better at knowing the CPA … we run ads for our business but there some confusion with knowing this… Question does this also somewhat apply to google ads and TikTok? Is there a way to calculate those platforms?

Thanks man

[gordonyoung]

In order to fill out the sheet, is it only achievable if you have a reporting system like TW or will these figures be available without TW?

[falamamamia]

Hi nick, do you do this with every client you onboard them? If so, do you do it after you've ran a couple of ads in order to get an idea of what cpa you can get them?

[YonePepe]

Nick! Why don't you use the net breakeven ROAS? In my excel sheets I factored in all the extra costs: sales tax, credit card fees, checkout fees. Wouldn't it be more accurate to know exactly how much I can spend per sale / customer ?

[jordankersg]

Hi Nick,
1. I'm slightly confused regarding how we determine what's an ideal target NC ROAS to put in the calculator. Does it just depend on how much we hope to profit from that campaign? My LTV is currently still the same as AOV as I'm dead focused on scaling a winning product, but I'll be upselling/cross-selling complementary products in a month or 2.

2. If we are unable to download triplewhale now due to budget constraints (so we don't have access to NC ROAS/NCCPA), is it fine if I just put the ROAS FB provides me with into your calculator?


Thank you so much for your help 🙂

[cascy]

Great video, best sheet i've seen that actually calculates LTV. When looking at new customer ROAS (NC ROAS) and its high like 8+ but your media buying ROAS (Facebook, google ads) is averaging around breakeven ROAS, so a large amount of new customers are coming from organic channels, how would you view this? E.g. would you increase spend even more on paid media channels, even though they're running at breakeven.

[thewilliamjrful]

Hey nick, love your content. I’ve always used break even ROAS to turn on/off ads but both my previous stores only have 1-2 products. Heard from your other video that for stores with multiple products to use Target CPA to turn on/off ads, is that accurate? But you still incorporated ROAS into the formula so whats the difference? I would think because one product stores, to calculate break even ROAS you use the margins for that 1 product, but with multiple products you will have different margins, hence its best to use CPA. Or it doesn’t matter, you can still use break even ROAS for multiple product store? Any advice on this? Thanks man!

[BenPaidAdvertising]

HI nick great content like always!
if i want to calculate ltv in 12 month i need to change the aov as well to 12 month ?

[Officialvoronin]

If you're doing a 3:2:2 DCT. How many different types of ad variations is facebook testing?

[katherinebleu]

Thank you for the amazing video. For 3-month Customer Value Profit, it means 3 month total or the third month?

[ReelGreezy]

Is there a calculation you can do to get NC ROAS yourself? I don't have triple whale