Cost of Facebook Ads in India is Going Up. Here’s Why

by Deepak Kanakaraju on January 21, 2018

When I started advertising on Facebook towards the end of 2015, the cost was very reasonable. One of the reasons for the low cost of Facebook ads was because many people were not advertising in India. There was a general thought process that is spending power of Indian audience is very less.

However people have realised that, the purchasing power of the Indian audience has increased. People have realised the power of good targeting on Facebook, and Facebook has also made it very easy to have conversion optimised ads.

The advertising cost in 2018 compared to 2016 has doubled for my campaigns. But as many people think, this is not a matter of concern, because the purchasing power of your target market has also increased.

A lot of marketers worry about the increase in the cost of advertising, but you have to realize that the cost of advertising is increasing because more brands are targeting the same audience and demographic.

One of the reasons more people are targeting the same demographic is because, the revenue potential from this audience is also high. If your competitors can spend more money to reach the same audience, and make a profit out of it, then if you have the right product market fit you should also be able to do that.

No matter what kind of product or service that you are selling, I would recommend that you design your marketing funnel in such a way that first you liquidate your acquisition cost.

For example, I sell digital marketing courses to my audience, and certain front end products which are of a low ticket price does not have a service component to it.

Consider that I am getting thousand leads at 10 rupees each. The total cost of acquisition will be 10,000 rupees. When I sell a self-serve course like the 100 day blogging course for 5,000 rupees, I just need to make 2 sales out of the 1,000 leads, to liquidate the cost of acquisition.

After I have done that, I still have thousand leads to which I can sell other digital marketing courses to, but I don’t need to worry about the cost of acquisition because acquisition has been already done. The revenue that I make from the sales of other courses, will be pretty much profit all the way, because the advertising or acquisition cost is not in the picture at all.

If the cost of acquisition of the leads goes up, I just need to increase the conversion ratio of the front end product which self liquidates, and I can do the same thing all over again.

For example, if I have to acquire leads at 20 rupees each, then all I need to do is increase the conversion ratio of my front-end product from 0.2% to 0.4%. Increasing conversion ratio is easier said than done, but if you follow all the digital marketing principles and have a good quality product, taking the conversion all the way up to 1% or 2% should be technically possible.

That’s why I am not going to worry about increasing cost of Facebook Ads in India.

{ 1 comment… read it below or add one }

Mortin Lee March 26, 2018 at 4:39 pm

nice blog sir
great job
thanks for sharing!

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