LAST UPDATED ON October 21, 2020

How to Actually Make Facebook Ads Work for Your eCommerce Business

So, you have an eCommerce store. You spent thousands building a website, fine-tuned your branding, created customer avatars...

So, you have an eCommerce store. You spent thousands building a website, fine-tuned your branding, created customer avatars and have manufacturing and distribution sorted and ready for when sales take off. But, that’s just it. Your company doesn’t have a consistent influx of sales.

That’s when you explored organic methods of garnering website traffic. You relentlessly posted on Facebook, Instagram and Pinterest. You reached out to blogs and even played with SEO. Maybe you tried Google Ads or influencer marketing. But, you got tired of Google Ads’ increasing costs and the amount of time it takes to ensure influencers post what you agreed upon.

So, you looked at other alternatives and heard about people’s success with Facebook Ads. Run Facebook Ads, they said. It’ll be fun, they said. You tried running Facebook Ads yourself, but the platform was confusing and you didn’t even get any positive ROAS from your efforts. Not to mention, it took tons of time to set-up.

Here’s the deal, though. Facebook Ads work and there’s a simple process to achieve success. I’m going to lay the exact process we used to generate $236,782.12 with only $24,738.21 in adspend. It all boils down to nurturing customers with a Facebook Ads funnel.

While each step of the funnel can work independently, it’s more effective to have a cohesive strategy that allows you to target customers as they progress through your funnel. The way we structure eCommerce campaigns for all of our clients is by looking at their stage in the customer journey. Based on this, we create ad copy and curate content based on their stage. In our funnels, we have three distinct steps:

Top of Funnel (TOF)
Middle of Funnel (MOF)
Bottom of Funnel (BOF)

As soon as we get someone to purchase through our funnel, we want them back. This stage of the funnel is called Beyond the Funnel (BTF). Below, we’ll explain what each step is, who falls into each step and how to create audiences.

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TOF – Cold Audiences

TOF is the first, and largest step of the funnel. Audiences in TOF are the biggest, broadest, and often haven’t even heard of your product. Obviously, they need to be made aware of it; people need to know you exist before they make a purchase.

The objectives we typically use for TOF ads are:

Brand Awareness
Engagement
Conversion Campaigns

Lookalike Audience

Overall, there are two main types of TOF audiences. Let’s start with Lookalike Audiences (LAA).

A Lookalike Audience uses Facebook’s algorithm to find people likely interested in your business because the algorithm deems them similar to existing customers.

Types of LAAs

Value-based: One of the most popular types of LAAs is creating a seed audience of 10-25% of your purchasers who spent the most. For example, say your average order value is $50. However, the top 10% of purchasers actually spend $70. So, you’d create a seed audience of people who spent at least $70.

High Intent: The second type of LAA is based on people’s activity on your website. In the Facebook Ads Manager, navigate to the ‘analytics’ tab and then to the ‘percentiles’ tab. From there, you’ll see how many pages your top 10% of website users viewed.

LTV: Recently, Facebook rolled out its own LAA based on all the data their site collects. They then create a lookalike using frequency, recency, and full-range of values including values passed. This type of LAA outperformed value-based and high intent LLA for the first part of 2019.

When to Use Them

Lookalike audiences are a great option if your store generated some sales. If you have Facebook Pixel installed, you have some data for it to use in order to create Lookalikes. We found that using a seed audience of at least 1,000 people is most effective.

When Not to Use Them

If you don’t have Facebook Pixel installed, you’ll need it ASAP. Then, allow Facebook to gather some data on your audience. Until you have at least 100 people in your seed audience, creating an LAA isn’t beneficial. For example, if you create a Lookalike based on purchases, make sure you have at least 100 purchases.

What we usually do from there is test out 1%, 3%, 5%, and 10% LAA to see which size audience heeds the best results.

Interest-Based Audience

Interest-based targeting uses the likes and interests based on what your target audience has included on their profiles. It also includes the pages they like and interact with as well as groups and other things on Facebook they’re connected with. Beyond these options, you might also get to target based on behaviours, such as ‘Engaged Shoppers’.

Since you can’t start off by creating LAAs, interest-based ads are a great way to start with Facebook Ads. Facebook leans toward liking broader audiences, so don’t get too specific. For example, it’s beneficial to bunch audiences into single interests. This gives you the ability to understand the exact interest that’s most effective for generating purchases.

Additionally, complete lists of interest targeting capabilities exist to show you how to better your strategy.

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MOF – Warm Audiences

They’re intrigued, they know you exist, and they’ve taken the time to visit your website or engage with your posts. You want to make sure the copy you use for these ads is different from what you used for TOF. Here are some questions that might help you create the ad copy for this step of the funnel:

What problem is it solving for them?
What outcomes are they looking for?
How are you different?
What do they want?
What are the benefits of your product?
Do you offer any guarantees?

Now that that’s out of the way, it’s time to answer a question of your own. What kinds of people fall into MOF? What we usually do is retarget people based on two different levels:

1. Engaged with the page.

If you have a large, engaged Instagram or Facebook following, retargeting people based on their engagement with your page is an effective way to get more sales. When customers engage, you often have something they like or want.

2. Viewed content.

When a customer checks out a product page, they have some degree of interest in your product. Retargeting people based on this level of intent is crucial. If you’re selling more than one product, utilizing the Dynamic Placement Ads (DPAs) is a very effective way to show ads for viewed products. Facebook can track this information using the Pixel, making it a requirement for this type of retargeting.

If you have a large enough audience, you can even break down audiences based on when they ‘Viewed Content’. For example, you can retarget people with different copy and creative for those who ‘viewed content’ in the last day, the last three days, the last six days and the last ten days. Just exclude the one day from the three days, the three days from the six days, and the six days from the ten days; as shown below:

When to Use

MOF audiences are perfect for eCommerce companies with Facebook Pixel installed. They’re also great if you’re getting consistent visitors to your website. You’ll want at least 1,000 people to target in this step of the funnel.

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BOF – Hot Audience

They’re approaching the finish line, all you need to do is pull them in. They’ve either added a product to their cart or initiated checkout, indicating a high level of intent. This is where you want to talk about additional offerings. If you offer free shipping, an extended warranty, or free returns, now’s a good time to mention it. Depending on your margins and willingness to promote sales, some companies also find offering a sale here can provide the incentive some people need to pull the trigger on the purchase.

Something else to keep an eye on is whether people drop off your website after they add a product to their cart. These drop-offs are typically caused by shipping rates, unexpected taxes or issues with currency conversion. Make sure you address and rectify these issues. A good benchmark to look at is if your abandoned cart rate is higher than 69%. Although, it can be higher than that for items priced over $100.

Once again, ensure the copy and creative you use is different from what you used on TOF. Here’s a question that might help you in creating the ad copy: Who’s the hottest when it comes to retargeting?

Look at Add to Cart, initiate checkout, and add payment information. These people expressed a high level of intent. What we usually do, unless you have upwards of 2,000 website visitors per day, is have BOF ads retarget people who added to their cart. If you’re getting more than 1,000 website visitors, you can try something different. Look into segmenting that 1,000 down by targeting people who added to their cart, but didn’t initiate checkout. You can also target people who initiated checkout but didn’t make a purchase.

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Conclusion

As a recap, if you want to make it big in eCommerce, you need a funnel. You can’t just slap together a few ads and hope for the best. Create a funnel and build ads and creative based on a customer’s stage within their journey. We’ve seen massive amounts of success in our funnels by separating them into three distinct steps: Top of Funnel (TOF), Middle of Funnel (MOF) and Bottom of Funnel (BOF). If you build it out and follow the blueprint above, you’re headed in the right direction.