You are running a Facebook ads campaign for a new beauty product. The campaign cost is P50,000, it generated 1,000 installs, the install-to-purchase conversion rate is 5%, and the average order value is P800. What is the cost per paying customer, and would you recommend scaling this campaign? Show your math.

Situation

In a previous role, I was asked to evaluate a similar campaign for a subscription snack box where the CPA was too high to justify renewal.

Task

I needed to calculate the true cost per paying customer and decide whether to increase the daily budget or pause the campaign.

Action

I computed the number of paying customers: 1,000 installs times 5% conversion equals 50 buyers. Then cost per paying customer equals P50,000 divided by 50, which is P1,000 per customer. Since the average order value is only P800, the campaign loses P200 per transaction before overhead. Instead of scaling, I recommended pausing the campaign and shifting budget to a retargeting funnel for users who installed but did not purchase.

Result

The retargeting campaign dropped the cost per paying customer to P600, making the campaign profitable at a 25% margin. The client approved an additional P30,000 budget for retargeting.