We've put together a post that focuses on “direct response” advertising for eCommerce stores - single or multi product, focusing on a price point somewhere up to 100$. The goal is creating an evergreen campaign, that is bringing in new orders and customers and where you’re covering your advertising expenses as you go (so a profitable ad campaign from the start, not just on calculated LTV).
I won’t be covering basics in this guide, first steps into Facebook Ads, campaign optimization types, how to make audiences, set up pixel, etc. You can find those tutorials on Youtube.
FIRST: SET UP YOUR PIXEL (View content on product page, ATC, Initiate checkout, add payment method, metadata for what products and what the value is for each cart session, purchase, etc.)
➡ CHASE THE RIGHT NUMBERS
Cost per click doesn’t matter, the metric you’ll use to gauge the effectiveness of your advertising is ROAS (return on ad spend)
Don't optimize for vanity metrics, even if you are paying more for each click, CPM, get lower CTR-s in the end all that matters is what is the ROAS.
➡ IMPORTANCE OF CREATIVE
80% of your success will rely on the creative - pictures, videos, texts you will use in your ads
With the “technical” part of FB advertising, so targeting, objective, tracking, lookalikes, etc. all you are doing is getting the attention of your target audience. In order for anything to happen, for them to click on the ad and get to your shop, to submit an order, what has to happen is your creative has to convince them to do it. Your creative, the video where you show how the product works, the influencer testimonial, where they are using your product, or the benefit that is specific to the audience you are targeting.
The better your product, the easier job you will have with the creative.
➡ SALES FUNNEL
Sales funnel for FB ads and types of traffic
Roughly, we split it to retargeting - reaching people who have already been to your site, engaged with your profiles, videos, etc. - and prospecting - reaching new audiences that don’t know you yet.
The cheaper, more impulsive the purchase, the simpler the product - the shorter the sales funnel
Inside our team, the campaign structure inside of facebook looks like this:
1 - Prospecting / Top of Funnel / Cold Traffic - first touch point with the brand, “filling the buckets” for effective retargeting, you’re reaching people with no context about your brand, so the creative has to be tailored to this. - aka. Video “Hey, here is my brand, here is the product, these are the main benefits, etc.”
2 - Reactivation / Middle of Funnel / Warm Traffic - People who have engaged with your ads but haven’t reached your website yet - video viewers % audiences, page engagers custom audiences, IG engagement custom audiences… Still Very cold audience, so we focus on types of creatives that clearly show why to get your product: Product benefits, special proof (testimonials, press mentions), showing the product in use, reaction videos, UGC…
3 - Retargeting / Bottom of Funnel / Hot Traffic - People who have visited your website but haven’t yet purchased. Split them up by different products, product categories, and how far they came in the sales process (product page, ATC, IC…). Shape your creative according to who you’re targeting
ATC - shopping cart abandonment sequence, come back and finish your purchase. Test a delay with ATC retargeting, so the customer doesn’t see a retargeting ad 10sec after adding something to cart on your site. We usually start ATC retargeting after 1 day, and don’t offer any discount for 3-7 days after the ATC event, since often just a reminder to complete the purchase is enough. After eg. 7 days, you start putting in % discounts or 1 day special offers to get them to convert.
4 - DPA
Dynamic product ads, especially useful if you have a bigger catalog of products, you create a data feed in your store and import it to facebook - so you can start dynamically targeting people with ads for the product they have viewed, added to cart, etc.
Super low lying fruit for those who are just starting with FB ads but do already have some traffic sources to their website, usually these types of ads have highest ROAS.
These can work really well on top of funnel, especially with specific collections & video creative to go with it. But we will cover that another time :)
➡ COLD AUDIENCES
For fast growing, transactional Direct-to-Consumer brands, 70+% of your ad budgets will be spent on prospecting, just so you can fill up all the remarketing audiences for other campaigns with fresh eyeballs.
Classic best converting cold audience is 1% lookalike from your purchasers - Success will - of course - depend on how big your seed custom audience of purchasers is.
For cold audiences you are targeting a combination of different lookalike audiences, interests and behaviours and after you get some data, you can do a lot with different lookalike audience combinations.
In prospecting phase, you are convincing someone who is having their first touch point with your brand or company, to decide to purchase. It's important you pick the right tone in your ads, understand you are talking to someone without context of who you are, adapt the creative to the placement/platform and the mindset of the user.
The ads have to show off the concept of your product from step 0
Facebook ads usually need much more attention, testing and creative changes, targeting tests, etc. to find a winning combo, they aren’t as “set it and forget it” as some other platforms (looking at you, google search ads 👀).
❗ Don’t overconstrain your audiences, picking to small of an audience size, you’ll have trouble scaling any winning ads, since you’ll drain the audience in the first few days of testing - after that frequency will start to rise and KPI-s fall.
➡ THE AD CREATIVE
We are fans of really maximizing the given real estate, that the platform gives you when it comes to creatives. If you can use 4:5 aspect ratio videos in your ad, use that size, not widescreen, use a story format creative (15sec 1080x1920 video) for those specific placements, etc.
Especially for products:
Demonstrate your product & how it works. Don’t rely on sound, 90% of people view video ads without sound on.
First 3-5 sec - hook them in, changes in this part of the video make the biggest impact on your performance, if you are testing different videos.
After that, educate, demonstrate, what you are offering, why you’re the best choice, what are the benefits for the customer.
Frustrations & coolness - address both - work with influencers to shoot videos on how they use the product, why they decided to purchase, etc. and target the influencers followers with them - or at least use their UGC in your own ads.
How to get high production value on a low budget: Motion graphics, animated elements, slow-motion shots, color correction/LUT-s. You don’t need much to make your video ads really stand out.
IMAGES: Communicate as much as you can without text, show product in use, test using faces, persons in the ad, but not stock photos.
✅ CREATIVE TESTING
One of the most important things you need dialed in for FB ads success is a process for creating and testing new ad creatives.
Don’t wait for your existing, well-performing creatives start to burn-out. Have new, tested creatives ready to go - so you can constantly improve your key metrics, so you don’t have problems with creative burn-out, you consistently test new angles on different audiences while also incrementally improving your best performing creatives.
Inside our agency, the process looks like this:
Content planning -> Ad creation/production -> Ad creative testing -> Documenting tests & moving the best performers to performance campaigns
Here we’ll cover creative testing part
Elements of creative, that we test - sorted in order of impact on KPI-s:
2 main ways, depending on the budget you have available
If your budget allows it, ideally you put each ad variant (eg. when testing 4 ad variants) in its own ad set all 4 with identical targeting, placements, budgets, start times… So the only variable is the creative inside those ad sets. Downside of this is it takes at least 20$ budget to run 1 test, so here you’re usually looking at accounts that spend 5k+ per month.
Low budget version of this is to put all ad variants in 1 ad set and set a rule to pause the ads after a certain number of impressions (eg. 2000). Statistically not as reliable since they don’t all get delivered to the audience at the same time.
For 1 test you typically spend about 1x AOV (Average order value for your store or that specific product)) or until you can see what creatives are winners - sometimes that's sooner, sometimes you have to leave it to run a few extra days.
If testing with smaller budgets, you usually have to rely on early indicators. You wont have enough purchases, to clearly say which creative is ready for performance campaign, so you rely on CPATC/CPIC (Cost per add to cart, cost per initiated checkout).
You benchmark the test winners to your best performers, not just inside of the creative test. Sometimes more than 1 creative will become best performer and you’ll move them to performance campaign, sometimes none of them will reach the required benchmarks and none of them go on to performance campaign.
KNOW YOUR NUMBERS
For successful advertising, you have to know your metrics, margins, conversion rate benchmarks, so you can quickly decide which ads you scale with bigger budgets and which you pause. Here, you rely on early indicators, CPIC, CPATC, CPVC… eg. you know that 8% of people who add to cart complete the purchase, you know the average order value and you know your profit margins. So after a 30$ ad test you can already see if the ad will be profitable or not based on the CPATC.
What ROAS is still profitable for you? Whats your product page to purchase conversion rate? What's your add to cart to purchase rate? Whats the max cost per ATC that you can afford in prospecting phase? Can your run your prospecting at 0.7 ROAS because you have high reorder rate and high customer LTV?
What's your advertising process like? If you have any questions regarding your specific case, we’d love to help, so feel free to get in touch with us at firstname.lastname@example.org