Ad Placement Value

You are the owner of an eCommerce platform. Let’s say you would like to place an advertisement on Facebook.

The Facebook advertising team tells you that the cost of a specific ad placement is $0.05 per impression, and the click-through rate (clicks per impression) is 1%. On the other hand, based on your historical data, you have an average of 2% transaction rate on your website (number of transactions per website visit).

How much would the overall advertising cost per transaction be?