facebook predictive lifetime value

Maturity Curves Maturity Curves Predictive Lifetime Value NANIGANS Predictive Lifetime Value NANIGANS INVEST IN YOUR MOST VALUABLE CUSTOMERS THE THREE PILLARS OF SUCCESSFUL AD CAMPAIGNS OPTIMIZATION OPTIMIZATION Assign a value to downstream events Optimize toward profitability with RTB algorithms TARGETING TARGETING Known customers Lookalikes Interests Connections Behavior CREATIVE CREATIVE Aesthetics Messaging Call to action Social context Relevancy Affinity Models Affinity Models Find new customers who share similarities with your most profitable customers. Cohort Analysis Cohort Analysis Understand performance over time (days, weeks, months) and apply learnings to current or future campaigns. Understand how customers purchase over time by building maturity curves. Immediately track ROI and determine high value customers. La^l hg^ h_ rhnk [^lm \nlmhf^kl She costs $10 to acquire (43% higher than John) She purchases a t-shirt today for $10 Over the next eight weeks she purchases a dress ($40) and a skirt ($30) Total purchase amount is $80 He costs $7 to acquire He purchases a t-shirt for $10 and sunglasses today for $20 He makes no additional purchases Total purchase amount is $30 3 Predictive Lifetime Value Optimization Techniques 3 THIS IS JOHN THIS IS JOHN THIS IS MIKE THIS IS ANNE Hours After Click Purchase Revenue 0 10 50 100 150 200 250 20 30 40 50 60 70 80 90 High Affinity- Females, age 25 Low Affinity- Males, age 25 Expand targeting into audiences with the highest affinity overlap CPA based bidding always targets the least expensive customer (John) instead of the most valuable customer over time (Anne). Marketers should be willing to pay more for Anne as her customer value over time will ^q\^^] Chagl oZen^' Number of Audiences http://www.nanigans.com Created by: Shaun McGrath, Laurie Cutts LEARN MORE ABOUT PREDICTIVE LIFETIME VALUE Affinity Overlap : e^Z]bg` k^mZbe^kl ?Z\^[hhd Z]o^kmblbg` \nlmhf^k Z\jnblbmbhg campaign delivered 6x greater ROI when optimizing for lifetime value (LTV) rather than CPA. Predictive lifetime value can help you understand how valuable customers are - and how much you should spend to acquire them. GZgb`Zgl :] >g`bg^ bl ma^ hger LZZL ieZm_hkf maZm f^Zlnk^l% predicts and optimizes ad spend for lifetime ROI across desktop and mobile. Pr e dictive Lifetime Value I n sights CPA LTV 0% 50% 100% 150% 200% 250% 300% 350% 400% 54% ROI 348% ROI Predictive lifetime value projects the amount of revenue or profit a customer generates over time, so you can understand their long-term value right away. Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 Day 8 Day 9 Day 10 Day 11 Day 12 Day 13 Oct 1 Cohort Oct 2 Cohort Oct 3 Cohort Oct 4 Cohort Oct 5 Cohort Oct 6 Cohort Oct 7 Cohort Oct 8 Cohort Oct 9 Cohort Yield Purchases Revenue FB Spend $64,384.73 $151,864.81 3998 118.79% 134.54% 143.39% 157.72% 176.79% 180.41% 186.41% 196.25% 208.12% 211.17% 218.86% 224.90% 236.75% $61,473.70 $148,453.95 3,990 126.79% 145.50% 158.34% 178.81% 187.26% 202.31% 212.41% 223.50% 231.51% 234.64% 236.56% 238.91% $61,266.62 $224,413.50 4,903 167.37% 185.68% 203.54% 213.63% 222.97% 232.11% 241.18% 246.64% 267.29% 272.74% 278.07% $66,999.73 $175,225.70 3,730 143.30% 172.21% 189.18% 200.69% 214.33% 227.62% 241.81% 246.78% 259.59% 261.82% $34,248.99 $58,980.50 1,342 110.38% 117.54% 120.04% 134.53% 142.34% 153.41% 182.33% 185.47% 190.84% $33,934.64 $74,548.99 1,758 125.90% 148.24% 150.52% 175.84% 186.29% 220.90% $33,982.69 $92,254.79 1,899 142.67% 177.44% 185.96% 211.11% 221.33% 252.49% 263.49% 243.88% $31,377.70 $74,849.81 1,649 178.39% 200.44% 216.52% 268.12% 244.11% 228.59% $29,726.34 $55,403.77 1,864 212.22% 245.54% 258.37% 273.93% 284.30% 214.51%

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If you are managing performance marketing campaigns at scale, take a look this infographic to discover how savvy marketers are leveraging predictive lifetime value to maximize their return.

TRANSCRIPT

Page 1: Facebook Predictive Lifetime Value

Maturity Curves Maturity Curves

Predictive Lifetime ValueNANIGANS

INVEST IN YOUR MOSTVALUABLE CUSTOMERS

THE THREE PILLARS OF SUCCESSFUL AD CAMPAIGNS

OPTIMIZATIONOPTIMIZATIONAssign a value to downstream eventsOptimize toward profitability with RTB algorithms

TARGETINGTARGETINGKnown customersLookalikesInterestsConnectionsBehavior

CREATIVECREATIVEAestheticsMessagingCall to actionSocial context Relevancy

Affinity ModelsAffinity Models Find new customers who share similarities with your most profitable customers.

Cohort Analysis Cohort Analysis Understand performance over time (days, weeks, months) and apply learnings to current or future campaigns.

Understand how customers purchase over time by buildingmaturity curves. Immediately track ROI and determine highvalue customers.

La^�l�hg^�h_�rhnk��[^lm�\nlmhf^klShe costs $10 to acquire (43% higher than John)She purchases a t-shirt today for $10Over the next eight weeks she purchasesa dress ($40) and a skirt ($30)Total purchase amount is $80

He costs $7 to acquireHe purchases a t-shirt for $10 and sunglasses today for $20He makes no additional purchasesTotal purchase amount is $30

3Predictive Lifetime ValueOptimization Techniques3

THIS IS JOHNTHIS IS JOHN THIS IS MIKETHIS IS ANNE

Hours After Click

Purc

hase

Rev

enue

0 10

100

150

200

250

20 30 40 50 60 70 80 90

High Affinity- Females, age 25

Low Affinity- Males, age 25

Expand targeting into audiences with the highest affinity overlap

CPA based bidding always targets the least expensive customer (John) instead of the most valuable customerover time (Anne). Marketers should be willing to pay more for Anne as her customer value over time will

^q\^^]�Chag�l�oZen^'

Number of Audiences

http://www.nanigans.comCreated by: Shaun McGrath, Laurie Cutts

LEARN MORE ABOUT PREDICTIVE LIFETIME VALUE

Affi

nity

Ove

rlap

:�e^Z]bg`�k^mZbe^k�l�?Z\^[hhd�Z]o^kmblbg`�\nlmhf^k�Z\jnblbmbhg�campaign delivered 6x greater ROI when optimizing for lifetime value (LTV) rather than CPA.

Predictive lifetime value can help you understand how valuablecustomers are - and how much you should spend to acquire them.GZgb`Zgl��:]�>g`bg^�bl�ma^�hger�LZZL�ieZm_hkf�maZm�f^Zlnk^l%�predicts and optimizes ad spend for lifetime ROI across desktopand mobile.

Predictive Lifetime ValueInsights

CPA

LTV0% 50% 100% 150% 200% 250% 300% 350% 400%

54% ROI

348% ROI

Predictive lifetime value projects the amount of revenue or profit a customer generates over time, so you can

understand their long-term value right away.

Day 1Day 2Day 3Day 4Day 5Day 6Day 7Day 8Day 9Day 10Day 11Day 12Day 13

Oct 1Cohort

Oct 2Cohort

Oct 3Cohort

Oct 4Cohort