I was talking to a UK-based toy brand this week. They are seemingly struggling to realize their global potential across the global media giants, e-commerce, and audience platforms. This is an all-too-common occurrence, which I still find amazing. I have had a privileged career to date working across global brands such as Shell, Sony, Apple, BT, and Google. Many more brands, whose weekly marketing budgets often dwarf SMEs’ annual allocation. I’ve learned many tricks over two decades. These helped change my clients mindset from ad spend to ad investment. I have demonstrated impressive RoI (Return on Investment) and RoAS (Return on Ad Spend) numbers.

So for this post, lets make a basic model using 4 of the global giant social media and audience platforms. Global platforms like Meta (Facebook), Google, Amazon, and TikTok have billions of users worldwide. Here’s a quick overview of their user bases:

• Meta (Facebook): Over 3 billion monthly active users.
• Google: Billions of searches per day, with over 270 million visitors per month in the US alone.
• Amazon: Over 200 million Prime members globally.
• TikTok: Over 1 billion monthly active users.

So, lets break this sheer scale down further in the context of the worlds population—8.2 billion.

• Meta (Facebook): Over 3 billion monthly active users. – 36% REACH!
  • Percentage of world population: 3,000,000,0008,200,000,000×100≈36.6%\frac{3,000,000,000}{8,200,000,000} \times 100 \approx 36.6\%
• Google: Billions of searches per day, with over 270 million visitors per month in the US alone.
  • Percentage of world population: 270,000,0008,200,000,000×100≈3.3%\frac{270,000,000}{8,200,000,000} \times 100 \approx 3.3\% (Note: This is just for the US; the global reach is much higher.)
• Amazon: Over 200 million Prime members globally.
  • Percentage of world population: 200,000,0008,200,000,000×100≈2.4%\frac{200,000,000}{8,200,000,000} \times 100 \approx 2.4\%
• TikTok: Over 1 billion monthly active users. 12.5% REACH!
  • Percentage of world population: 1,000,000,0008,200,000,000×100≈12.2%

Example: ACME Retro

Let’s use ACME Retro, a small novelty toy company in the UK, with an annual digital media budget of £250,000. We’ll explore how far this budget can go across these platforms. Now, before we get into the numbers. Obviously, not all of the world wants to own one of ACME Toy’s products. Lets say, 1% of 1% would own one for the right price, if they were aware of the product. 1% of the total word audience would be 82 Million potential customers. 1% of those is 820,000 customers. Based on these conservative estimates, that is your global sales target. Its a crude calculation, but in media performance planning, this is where we start. This number is telling me that I can reach 36% of 820,000 users across Meta alone, or 295,200 unique users. For this tried and tested model to work, we need to avoid overspending on the platforms. This will help minimize diminishing returns. That said, I tell clients that “there is no end-of-level baddie,” i.e. you don’t exhaust one channel before moving onto the next. On the flip-side, there is no point spreading yourself too fine from the start. Its a balance that comes with experience and a simple statistical regression model.

Average Basket Value

From ACME Retro’s website, we can speculate an average basket value of £50. It might be a lot higher, but it won’t be much lower. We will use £50 as a conservative estimate. When we perform the RoAS calculations, you will see the actual achievable revenue could be double the amount calculated here. So, lets use some basic calculations. These are the calculations a graduate media planner would master in their first 3-6 months out of university. They are their bread and butter calculations.

Click to Conversion Rate

This refers to the number of clicks (on average) it takes before one becomes a sale. For instance, 100% would mean that each click off-platform to ACME would result in a sale. 1% means, of 100 clicks, only one sale is expected. Industry e-commerce averages are north of 5%. However, ACME struggles with their on-site UX (User Experience) and brand awareness. They also face issues in brand expectation and quality of product in the market. A whole host of other marketing problems leaves them with a 2.5% CV%. Still making one out of every 40 clicks into a sale.

We’ll use a click-to-conversion rate of 2.5%.

Impressions, Clicks, Sales, and Revenue

Meta (Facebook)

• Average Cost Per Click (CPC): £0.50
• Impressions: £250,000 / £0.50 = 500,000 clicks
• Conversions: 500,000 clicks * 2.5% = 12,500 sales
• Revenue: 12,500 sales * £50 = £625,000

Google

• Average CPC: £1.00
• Impressions: £250,000 / £1.00 = 250,000 clicks
• Conversions: 250,000 clicks * 2.5% = 6,250 sales
• Revenue: 6,250 sales * £50 = £312,500

Amazon

• Average CPC: £0.75
• Impressions: £250,000 / £0.75 = 333,333 clicks
• Conversions: 333,333 clicks * 2.5% = 8,333 sales
• Revenue: 8,333 sales * £50 = £416,650

TikTok

• Average CPC: £0.60
• Impressions: £250,000 / £0.60 = 416,667 clicks
• Conversions: 416,667 clicks * 2.5% = 10,417 sales
• Revenue: 10,417 sales * £50 = £520,850

Conclusion

With a £250,000 investment, ACME Retro can generate significant revenue across these platforms:

• Meta (Facebook): £625,000
• Google: £312,500
• Amazon: £416,650
• TikTok: £520,850

This situation generates several questions for me when discussing next steps with clients. However, it more often than not comes down to the same three time and again.:

Why limit your annual budget to £250,000? You could allocate that entire amount to Meta alone and potentially generate £625,000 in revenue. This impressive return is achieved without even considering other channels. Given that 12,500 sales represent approximately 4.23% of the 295,200 potential sales available on Meta, you are far from saturation. Focus on optimizing Meta first before exploring other platforms.

Achieving a 2.5% conversion rate is crucial. If your current conversion rate falls short, it’s essential to pause your campaigns. Instead, invest in improving your marketing strategies and user experience (UX) to ensure you’re not wasting valuable resources.

Understand the metrics or hire someone who does. If ACME Retro Toys doesn’t have the skill to interpret these metrics, they must hire a skilled employee. Alternatively, they can bring in a consultant. The employee should have proven experience in digital marketing analytics.

It amazes me that there are still companies who haven’t transferred their business media thinking from traditional to digital. We are in what many call the Post-Digital era. It’s not going to get any easier for them. All I can do is wish them the best of luck. I might offer more than £45K as a full-time job. This would be for somebody with a few years of performance marketing experience. They would come in and do this. There is a lot to be done to transform their e-commerce offering if they can’t make these conservative numbers work.