Case Study: Optimizing Ad Spend for Enhanced Customer Lifetime Value

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tldr; We ran an ad campaign that cost us $43.71/$31.74 to convert a customer. Those customers converted at $134.15 on average, making our campaign profitable.

Full Service Marketing Agency New Jersey | 1

Problem: Marketing campaigns on social media platforms often struggle to balance customer acquisition costs (CAC) with the lifetime value (LTV) of customers. Our goal was to optimize ad spend on Facebook to not only attract customers but ensure that their LTV exceeds the CAC significantly.

Solution: We implemented a targeted ad strategy on Facebook that focused on reaching potential customers with a higher likelihood of long-term engagement. By analyzing customer behavior and refining our ad targeting criteria, we managed to decrease the CAC while increasing the LTV.

Results: The campaign saw a substantial decrease in the cost per conversion on Facebook from previous figures, settling at an impressive $43.71. Meanwhile, the average LTV for paying users experienced a noteworthy increase, peaking at $134.15. This marked an increase of 26.7% over the previous 28 days, indicating a successful return on ad spend.

Conclusion: The refined Facebook ad strategy not only reduced the CAC but also improved the LTV of new customers. This case study demonstrates the importance of targeted advertising and the potential for social media platforms to yield a high return on investment when handled strategically.

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