E-Commerce Brands Should Invest in Facebook Ads


Updated September 2, 2021 with new information and best practices.

Ecommerce Marketing Automation

It’s no mystery that Facebook advertising is a valuable tool for e-commerce marketers. From Facebook catalogs to Instagram shopping, there’s a lot to know when it comes to maximizing your performance with Facebook Ads Manager. That’s where we come in! Keep on reading to get a full breakdown on how to set up your Facebook Ad account, determine key campaign metrics, and tips and tricks for developing a full-funnel campaign strategy.

1. Set Up Your Facebook Ad Account With a Strong Foundation

With more than 2 billion active users on Facebook and more than 1 billion on Instagram, you can attract new and existing customers to your products with a click of a button. Let’s start with the basics; setting up your Facebook Ad account for success.

Step 1: Set Up The Facebook Pixel

Do you want to effectively measure, optimize, and build audiences for your ad campaigns? That’s where the Facebook pixel comes in. With the help of a developer, or if you are able to do it yourself, adding this piece of code to your website is essential for e-commerce campaigns where conversions are everything. The setup process is simple. All you (or your developer) have to do is place the Facebook pixel base code on all pages of your website, and voila! Now you are one step closer to maximizing your Facebook campaigns.

Step 2: Set Up The Facebook Conversions API

Apple’s iOS 14 update is having a significant impact on social media advertising. That’s why Facebook launched the Facebook Conversions API. This tool gives you a new, more private way to collect advertising data using server-side tracking rather than browser-side tracking. You can also gain additional insight into who is interacting with your business. The Conversions API works with the Facebook pixel to help improve the performance and measurement of your Facebook ad campaigns. And although this tool is optional, it is highly recommended as we move into a post-iOS 14 update world.

Step 3: Add Standard Events

Now it’s time to add standard events. What are standard events you might ask? Standard events are predefined actions that Facebook recognizes and supports across ad products. (You can find a few examples of standard events below.) When you add them to your Facebook pixel code and Conversions API, you can log standard events, optimize for conversions, and build valuable audiences. These events are essential for developing an upper-, middle-, and lower-funnel campaign strategy later on.


Step 4: Create Custom Audiences

Once you have your standard events set up, this will allow you to create custom audiences. To set up a custom audience, you have to choose an audience source, standard event and determine the number of days you want to retain that audience. For example, you can create a custom audience based on people who have initiated checkout in the past 30 days. From here, you can create another custom audience based on people who have purchased in the past 30 days. Now, you can create an abandoned cart audience targeting people who have initiated checkout but haven’t made a purchase yet. Having the ability to create custom audiences will benefit your campaigns by allowing you to confidently remarket customers and bring in highly qualified new customers.

Step 5: Create Lookalike Audiences

It doesn’t stop at custom audiences! You have now opened the door to creating lookalike audiences modeled off of website KPIs and engagement. You can create a lookalike audience by taking a custom audience, selecting a location, and audience size. For example, you can build a lookalike audience from people who have already purchased from your site. Then, you can use that lookalike audience to find people similar to your current customers to increase sales. Lookalike audiences take the guesswork out of finding a highly qualified audience and help increase campaign performance with higher-than-average click-through rates compared to interest-based audiences.

Step 6: Add a Facebook Product Catalog

As you may know, Facebook and Instagram Shopping are huge for consumers, but also for businesses. Make it easier for your customers to shop your brand’s products with the help of a Facebook product catalog. A catalog is a container that holds information about the items you want to advertise or sell across Facebook and Instagram. This tool opens the door to tagging products on Facebook and Instagram posts, which can also be used when advertising. You can create catalogs for different types of inventory like your e-commerce products and manage catalogs in Facebook’s Commerce Manager.

2. Determine What Metrics You Want To Track

Once your Facebook Ad account is set up for success, now it’s time to define which metrics are relevant for your campaign goals. We’ll cover the importance of cost per purchase, purchase conversion rate, purchase conversion value, average order value, and return on ad spend below. These metrics will help measure campaign performance and give you the ability to make thoughtful optimizations.

Cost Per Purchase

First, we will look at cost per purchase. This metric will measure how much budget has been spent and divide that by the number of purchase events tracked by the Facebook pixel or Conversions API on your website. To put it simply, cost per purchase will help you determine if you are getting purchases at an efficient cost.

Purchase Conversion Rate

Next, we will look at the purchase conversion rate (or result rate on Facebook). This metric will measure the percentage of website visitors who purchased something from your online store in a set period of time. The purchase conversion rate will help you determine how your campaign, ad set, and ads are performing in terms of getting people to convert on your website.

Purchase Conversion Value

Getting conversions is great, but how much are customers actually spending when they make a purchase? The total value of website purchase conversions will measure how much customers spend when they purchase on your website.

Average Order Value

How much do customers spend on average? There’s a metric for that! Average order value measures the average amount a customer spends from each purchase. You can calculate this by dividing revenue by the number of conversions.

Return On Ad Spend (ROAS)

Return on ad spend is an essential metric for determining the success of your campaign. To calculate ROAS, you can take the total revenue generated from your Facebook ads and divide that by your total ad spend. For example, let’s say you spent $40,000 in one month on Facebook ads, which generated $100,000 in purchases for your business. That’s a 2.5X ROAS ($100,000/$40,000), which means for every ad dollar you spend, you get $2.50 in revenue.

3. Look At What Your Competitors Are Up To

What are your competitors doing that you aren’t? How can you differentiate your campaign from your competitors? Here are two ways you can increase your competitiveness in the e-commerce space.

Facebook Ads Library

Research competitors with Facebook’s Ad Library! This free tool is a great place where you can search for ads that are currently running across Facebook and Instagram. Simply search for your competitors in the search bar, and all of their active ads will appear for you to look at. It’s that easy!

Competitor Organic Social Posts

Another cost-effective (FREE) way to research your competitors is by looking at their organic Facebook and Instagram posts. They are putting it all out there for you to see, so you might as well take a look!

4. Consider Ad Content For All Stages Of the Funnel

Now that you have your campaign metrics nailed down, it’s time to work on your campaign strategy for all stages of the funnel. From prospecting to retargeting, give your target markets a customized experience that will lead to higher conversions.

Top Of Funnel Ad Examples

Prospecting audiences are crucial for getting your brand awareness out there and building up your retargeting and lookalike audiences. With Facebook’s broad demographic, location, and interest-based audiences at your disposal, you can go as broad or as segmented as you want. Lookalike audiences will also come in handy here. Find a qualified audience by modeling a lookalike audience from people who have already converted on your website. The possibilities are endless!

Middle Of Funnel Ad Examples

You’ve reached out to new customers, now it’s time to drive consideration. Not everyone is ready to convert after seeing one ad. It takes love and nurturing (and persistence) to drive conversions. This is where you can utilize your Facebook pixel to create custom audiences and retarget middle-of-the-funnel customers. Try basing a custom audience off of people who have engaged with your Facebook and Instagram accounts or engaged with your catalog and shopping products. These people may be familiar with your brand but haven’t bought from you before. Targeting middle-of-the-funnel customers will help keep your products top of mind and drive them to the bottom of the funnel.

Bottom Of Funnel Ad Examples

High-value conversions typically happen once a user interacts with your brand over multiple touchpoints. This could involve platforms outside of social media like programmatic display and Google search. For social, you can utilize custom audiences and retarget customers based on website visitors, abandoned carts, initiated checkout, past purchasers, and more. At this stage, you will also want to make sure to exclude any users that became customers during the earlier stages to create a customized ad experience for the lower funnel.

5. Test Different Audience Sizes

Once you have your audience targeting strategy built out, now it’s time to test different audience sizes. This is an important tactic when using lookalike audiences since you can choose an audience size between 1-10%, depending on how similar you want the audience to be to your original custom audience. Here you can do testing to see which lookalike size will perform the best. Testing audience sizes can also be done at the upper-funnel level with demographic, location, and interest-based audiences to see if a broader or more narrow audience will perform the best for your campaign.

6. Leverage Facebook Dynamic Ads

Customers love a personalized experience, and there is no better way to give them that than with Facebook dynamic ads. Facebook dynamic ads automatically show the right products to people who have expressed interest in your website. Simply upload your product catalog and set up your campaign one time, and it will continue working for you for as long as you want; an easy way to find the right people for each product.

Facebook Ads + E-Commerce = Perfection

Facebook advertising and e-commerce brands go together like peanut butter and jelly. With a solid Facebook Ad account and a variety of tools at your disposal, it’s never been easier to maximize your potential with Facebook Ads. Your new and existing customers are waiting! Start driving conversions today.





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