Paid Social Blueprints
CPAC isn't just another metric - it's a critical indicator of your paid social team's efficiency. Dive into what CPAC is, why you should care about it.
How much does it really cost to manage an ad in the world of paid social? If your immediate thought was just the ad spend, you're missing a substantial piece of the equasion!
In the rush to optimize ROAS, click-through rates, or other KPIs, it's all too easy to overlook the actual operational costs involved in managing a paid social ads. The truth is, the total cost is far more intricate and usually higher than most teams realize. That’s why today, we're introducing a metric that every paid social manager should have on their radar: the Cost Per Ad Created (CPAC).
This metric is more than just a number: CPAC helps you quantify the time, effort, and resources invested in creating each ad—from the moment it's just an idea to its final launch and subsequent reporting. We're talking about all those 'hidden' costs: the man-hours spent in uploading ads, ensuring quality, and pulling together reports that help you make data-driven decisions. If you're not tracking these, you're operating with a blind spot that could be draining your ROI and eating your team's productivity.
So, why should you care about CPAC? Because understanding this metric can empower you to make informed decisions that go beyond just ad spend optimization. It can help you identify inefficiencies in your processes, thereby freeing up time and resources for more strategic tasks like creative testing brainstorming, audience deep-dives and campaign analysis. Most importantly, it helps you answer a critical question: Is there a more efficient way to manage your paid social campaigns?
In this blog post, we will delve deep into what CPAC is, why it matters, and how it can serve as a roadmap to operational excellence. We'll even show you how automating certain aspects of ad creation and management can drastically reduce your CPAC, enabling you to channel your team's energy into innovation and strategy rather than tedious, repetitive tasks.
The biggest hidden cost factors that significantly impact your ROI, yet often go unnoticed or unaccounted for, are the time spent on ad uploading, constantly checking the ads them and reporting on them.
Let's start with the three most manual labor-intensive processes that almost every paid social team has to go through.
It's not just clicking a few buttons. This process involves:
When managing multiple campaigns across various platforms, these tasks quickly add up and can take hours if not days. If you are testing 50+ ad creativs a week, the chances that your media buyers spend 1 full day uploading ads and setting up creative tests are very high.
Often underestimated, QA involves meticulously checking each ad's creatives, headlines, texts, links, and targeting options. This can be particularly time-consuming, especially when you're working with large volumes of ads.
Crunching numbers and pulling data isn't just labor-intensive, it's mentally draining. But more importantly, it's time that could be spent analyzing the data rather than just collecting it.
Now, consider the HR costs involved in these processes. Let's say it takes five hours to upload a set of ads, another two for quality assurance, and yet another one for reporting. If you pay your team members an average hourly rate, these costs can be substantial.
And let's not forget the opportunity costs—the benefits you forego by not investing your time and resources in more impactful activities. Could your team be working on a new, innovative creative testing concepts instead of spending hours on manual processes? Could they be diving deeper into data analytics to uncover fresh insights? Or perhaps, could they be perfecting that video that’s almost, but not quite, a best-performer?
By ignoring these hidden costs, you're not just underestimating your expenses; you're also missing out on opportunities to maximize your team's potential. That's why understanding and calculating your CPAC is crucial—it shines a spotlight on these otherwise overlooked aspects and gives you the full picture of your campaign costs.
In a landscape where every click, impression, and conversion is tracked, there's a gap in our metrics: a comprehensive understanding of the true cost to create an ad. That's where the Cost Per Ad Created (CPAC) metric comes into play.
CPAC gives you a granular view of what it takes—financially and timewise—to create a single ad from scratch to launch. This includes not just the ad spend, but the human capital and time invested in getting that ad live and subsequently reporting on its performance.
To truly grasp CPAC, you need to break it down into its primary components:
Think about the time it takes to set up each ad, from filling in the campaign details to setting targeting parameters and uploading creative assets. Multiply that by the hourly wage of the person responsible, and you've got your ad upload costs.
Mistakes in ads can be costly, both in terms of budget and brand reputation. Quality assurance checks help avoid such pitfalls. Calculating the time it takes to review each ad for consistency, correctness, and compliance—and then multiplying that by the hourly wage—gives you the QA costs.
Gathering data on ad performance is essential but often time-consuming. Again, account for the time spent on pulling and compiling these reports, then multiply it by the hourly wage.
The CPAC formula then combines these costs and divides them by the number of ads created, making it a simple yet powerful way to gauge efficiency:
Why is CPAC such a big deal? Because it can reveal inefficiencies in your ad creation process that you might not have even been aware of. It serves as a benchmark to evaluate whether your current workflow is cost-effective or if there's room for improvement. By regularly tracking this metric, you can identify which parts of the ad creation process are most in need of streamlining and find ways to optimize these areas for better cost-efficiency.
By integrating CPAC into your performance metrics, you take a holistic approach to paid social management, one that considers not just the outcome but the process. And as we'll discuss later, optimizing that process with an automation can lead to significant cost savings and operational excellence.
You know by now that Cost Per Ad Created (CPAC) is a vital metric that can make or break your paid social team’s operational efficiency. So the next logical step is to figure out how to optimize this number without sacrificing quality or strategy. How can we make the processes more efficient, reducing the time and costs involved in ad creation and management?
The first touchpoint in the CPAC equation is the ad upload process, which, as we've noted, is far more time-consuming than many realize. There are ways to make this more efficient:
Quality assurance is crucial, but it doesn't have to take a huge portion of your team’s time. Some strategies to consider:
Reporting is the final piece of the CPAC puzzle, and it too can be optimized.
Consider a dynamic paid social agency that has recently acuqired 5 new clients and is now trying to scale paid social ad operation to manage its growing workload of 500 addtional ads per month. If they will decided to hire freelance media buyers to help with their operation at $50 per hour, this is the hours that they will need to book to manage the workload:
With an hourly labor cost of $50, the agency's weekly operational cost amounts to a $1,900 (38 hours x $50/hour) or $7,600 monthly, avaraging at $15 per ad created.
For a growign agency it’s a substantial cost, considering all those processes are very manual and non-value. Let’s look at 2 scenarios of managing the same workload with automation: at 80% and 95%.
Sensing the need for operational efficiency and lower costs, the agency implements an automation solution costing $3,000 per month.
The agency successfully automates 80% of their tasks, reducing the manual workload to:
This totals 7.6 hours weekly, costing them $380 ($50 x 7.6 hours). Add the $3,000 monthly automation cost, and their new monthly operational expense is $4,520. The CPAC is now at $9.
The manual workload drops even further to:
Now, they only spend 1.9 hours weekly on these tasks, costing $95 ($50 x 1.9 hours). Including the $3,000 monthly automation cost, the new monthly operational cost is $3,380. The CPAC is at $6.7, amplifying the savings.
Automation doesn't merely save money; it elevates the agency. With 30 to 36 extra hours a week freed up, depending on the automation level, the team can now focus on creative ideation, strategy formulation, and enhancing client relations.
When it comes to paid social advertising, there's a crucial metric that most teams are overlooking: the cost per ad created . This isn't just about ad spend, it's about the actual time, effort, and resources your team invests in creating and managing each ad. By dissecting processes like ad uploading, quality assurance, and reporting, CPAC gives you a complete picture of your operational efficiency—or lack thereof.
But the good news doesn't stop at identification; it extends to optimization. By incorporating automation into your workflow, you can drastically reduce your CPAC without compromising on quality. This means more time for what really matters—creative innovation and strategic planning.
Paid Social Blueprints
Paid Social Blueprints