Customer Acquisition Cost

Goals

To find information in regard to the cost of acquiring a new customer via Facebook Ads and Google Ads for an e-commerce website that sells walking canes in the U.S. to women aged 50 to 80 years.

Early Findings

Cost of Customer Acquisition: Facebook Ads and Google Ads

  • In 2018, Facebook ad spend increased by 50% year-over-year to $11.7 billion.
  • A survey of advertisers including ad agencies that specialize in Facebook ads revealed that 28% of respondents have a customer acquisition cost (CAC) of less than $5.
  • Another 28% of respondents to the survey reported a CAC of between $6-$10.
  • The above figures show that more than 50% of advertisers on Facebook report a CAC that is less than $10.
  • On the extreem end of the scale, 7% of respondents reported a CAC greater than $100. This is not unusual for service industries i.e. B2C and B2B as well as higher-end consumer goods.
  • For Google Ads, the average cost per click is between $1 and $2.

Fashionable Canes

  • According to SimilarWeb, 59.3% of traffic to the Fashionable Canes website comes from search.
  • The company has a total of 374 organic keywords and 116 paid keywords. From the search traffic, 59.41% comes from organic keywords while 40.59% comes from paid keywords.
  • On the other hand, 3.62% of traffic to the Fashionable Canes websites comes from social.
  • The breakdown for the company's social traffic includes: Facebook - 56.3%, Reddit - 22.54%, YouTube - 11.76%, and Pinterest - 9.41%.

Proposed next steps:

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Our initial hour of research pointed to the availability of information that can be used to provide insights into the cost of customer acquisition via Facebook Ads and Google Ads. Consequently, we recommend additional research to determine CAC via Facebook Ads and Google Ads for an e-commerce website that sells walking canes in the U.S. to women aged 50 to 80 years.
We also recommend conducting a competitive advantage of the three identified companies that sell canes i.e. House of Canes, Fashionable Canes, and Elderluxe. For each company, we will provide: company overview, products and services, estimated annual revenue, marketing channels, target consumers, and competitive advantage/value proposition.