SMMA Guarantee and ROAS Questions · Agency Service Scaling Kings👑

SMMA Guarantee and ROAS Questions

Hey all,

I watched Uncle Jimmy's video on the numbers side of running ads (https://www.youtube.com/watch?v=l2Nzv7aHrKg&t=149s) and it has been super helpful. However, I'm still not following all of the math.

Let's say I spend $1000/mo on ads and my cost per click is $5 with a conversion rate of 5% and a CTR of 1%. In the video, that means I will have 200 clicks ($1000/$5) and 10 leads (200*5%). But where does the CTR come in?

Also working backwards, I think you can figure out how much a client needs to make per job for it to be worth running ads right? So in the video (ROAS section) we assume the client converts 25% of the leads to paying customers. That means if I spend say $400/month on ads I will have 80 clicks ($400/$5) which will generate 4 leads (80*5%) which will be 1 paying customer (4*25%).

That means my client needs to be making $400/closed customer just to break even if there was no cost to run the ads. If we want to target a 10 ROAS, they need to make $4,000/ closed customer. But I can't imagine that is true right? For something like the personal training niche, I would assume most closed customers are paying $120-$200/mo (and if they sign a contract for 3 months of training that's $360-$600 /closed customer which is around breakeven for ad spend).

What am I missing here?

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