Have your CPC costs on Facebook dramatically increased? Are you having trouble staying profitable? CMOs, growth managers, and marketing specialists are all witnessing a dramatic change in Facebook Ads. Due to the increase in competition, running, scaling, and maintaining profit on these campaigns have become extremely challenging. Ultimately, to continue creating effective campaigns on Facebook, it’s crucial to develop a solid strategy going forward. The plan should incorporate multiple levels, including structure, creative, performance, and testing. This guide will outline how to run, scale, and maintain healthy ROAS(Return on Advertising Spending) for the most effective Facebook Ad Campaigns in 2019.
The Ad Account Structure
The first step to any Facebook Ad Campaign will be to organize your ad accounts structure by stages in the funnel.
The ad account structure above lends itself to conversion-optimized campaigns. With this ad account structure, you’ll want to organize your campaigns by prospecting initiatives, mid-funnel activities, and bottom-funnel audience retargeting. Here’s a breakdown of what each of those campaigns should look like:
Prospecting: This will focus on new audiences who have never actually interacted with your business. It’ll likely be composed of interest, behavior, and demographic-based audiences, as well as lookalike audiences. It’s vital to make sure the audiences you target in your prospecting campaigns have some relevance to the products you’re advertising.
Mid-funnel Retargeting: This campaign will target your warmer audiences who have interacted with your business, but didn’t make it over to your site and convert. This includes your post engagers, video watchers, and fans of your page. Often, this is an optional campaign, and if you have a limited budget to start, you should exclude this effort. However, if you’re looking to scale your paid social efforts, incorporate this into your strategy.
Bottom-funnel Retargeting: This aspect of your ad account is essential because it’s where you’ll retarget your most qualified audiences, such as website visitors, and shoppers who have added products to their cart. They’re the most familiar with your business and are the most likely convert to customers. This stage is where you will see the highest conversion and return.
Campaigns optimized for other goals, such as traffic, engagement, or leads, are also helpful for growing brand awareness and generating new audiences. For example, if you promote content with a traffic optimized campaign, you can then retarget those visitors, and build lookalikes off of that seed audience. These campaigns will most likely be one-offs and likely run with more measurable goals and end dates.
Testing is probably the most important aspect of scaling your Facebook advertising, so you’ll want to have specific campaigns dedicated to this. You should always be testing something, whether it’s a new audience, new creative, etc. While you still have the choice to set budgets at the ad set level, you’ll want to leverage Facebook’s split testing feature, which lets you test individual variables, and get statistically significant results on a winner.
|*TIP* If this split testing feature ever changes, you can just look up statistical significance calculators online, and manually determine whether or not a test yields significant results.|
Let’s talk money.
Once you have an ad account framework that works for you, it’s time to think about budgeting. Before Campaign Budget Optimization (CBO), budgeting typically would have been considered from an audience level. However, CBO is becoming mandatory as of September 2019, it’s essential that you use this time to figure out how it works for you. Start setting budgets at the campaign level.
Courtesy of Facebook- https://www.facebook.com/business/m/power-five
Depending on your KPIs, you’ll want to allocate around 30-50% of your budget to your prospecting efforts, 20-40% to your retargeting efforts, and 10-20% to other efforts, such as engagement, leads, or retention. Use metrics such as cost per acquisition, and the number of results you want to create an initial budget that you can eventually scale. With CBO, there are fewer levers to adjust when optimizing your campaign, however, if you see that an audience or ad set is getting minimal or the majority of the campaign’s budget, you should adjust and redistribute the minimum and maximum budgets at the ad set level. This adjustment can be used to optimize the performance of your campaign.
Want to take advantage of the last days for manual bidding and ad set budgets? You’ll want to understand the Facebook bidding auction, and how your ads can thrive. For more information, check out this guide on manual and automatic bidding. This budgeting strategy allows you more control and lets you make granular adjustments; however, it’s important to take advantage of this period of testing so you can come up with the best CBO strategy.
Who should you see your ads? Targeting the right audience is critical to run and scale Facebook Ad Campaigns. It also ensures a healthy ROAS. Audiences were discussed briefly when outlining campaign structure, but they’re typically synonymous with the ad set. Each ad set represents a different audience you are targeting. Let’s outline audiences based on the ad account structure above.
Who should see your ads? Targeting the audience is the only way to ensure a healthy ROAS on your ad campaigns, and allow you to scale. Audiences were discussed briefly during the outlining campaign structure, but they’re typically synonymous with the ad set. Each ad set represents a different audience you are targeting. Let’s outline audiences based on the ad account structure above.
Prospecting or Awareness campaigns are necessary to bring people into the funnel. Think of this as an introduction to your business or awareness of your brand. This group is undoubtedly considered the coldest audience because of their lack of activity or familiarity with your business. However, in the case of Facebook ads, this stage is perhaps far more significant then most people realize. Compared to consumers on other platforms, audiences on Facebook are not always looking to purchase. This key difference presents an opportunity to create campaigns and creative that directly focuses on awareness and audience interest. Various tactics and strategies can work in this specific stage. First, It’s a good idea to have your existing customers influence your prospecting efforts. This audience will be based on interest and demographics that align with your business. For example, if you’re running ads for a premium linen sheet set, you may want to target people who are new homeowners and have disposable income. In another case, you may be running ads for a millennial cosmetics line. In this case, you may want to include people interested in media outlets or blogs that review beauty products. You may also want to experiment by adding those who are interested in competitor brands in your ad sets. However, it’s important to note that when targeting people this way, interests are not always “positive.” For example, if you’re trying to target a politically liberal audience, and have the interest audience set for Democratic politicians, you may attract users who talk about those politicians negatively.
To get an audience that’s similar to your existing and target customers, you’ll want to create lookalike audiences. Lookalike audiences are primarily large audience groups based on set seeding lists. This includes making lookalike audiences based on your customers, website visitors, shoppers who have added products to their cart, video viewers, etc. With a lookalike audience, you can trim down by interests and behaviors to find the right group. This is essential in order to test different quantities and sizes of the audience to determine which works best. For example, 1% of a lookalike group can be equivalent to about 2M people in the United States for certain settings and interests. This quantity might be too large, and it is essential to continue to trim and try to target the audience group you are looking to reach. This is just one of the many ways Facebook uses its many data points on each of its users for advertising. Need a refresher? Here’s how you create a lookalike audience.
Image courtesy of Facebook: https://www.facebook.com/business/help/465262276878947
Another less known campaign strategy to use during this early stage is estimated Ad Recall Lift, which is the number of people who are likely to remember your ad days after seeing it. Also, estimated ad recall rate, which is the ad recall lift number divided by the number of people you’ve reached. These metrics by Facebook calculated through several different factors, including time spent viewing an ad, interaction with ads(hovering, scrolling, clicks, comments), behavior with other ads, ect. This form of data has unlimited potential to help you reach the right audience at the right time during the prospective stage.
It’s important to leverage all the data you can populate with Facebook. This includes your existing and potential customers, a lookalike audience, ad recall, etc. As mentioned earlier, understanding the Facebook audience and their intent during this early stage is essential to scaling.
Audiences within the mid-funnel campaign(s) will be those who have interacted with your business on Facebook but haven’t yet made it to your owned & operated websites. This audience includes video viewers, post engagers, etc. These are custom audiences you can create natively through Facebook’s audience tool.
And finally, bottom-funnel retargeting campaign(s) will be your warmest audiences. These groups are incredibly familiar with your business and actively engage with your website. These users are product page viewers, shoppers who have added to their cart, and even initiated checkout. However, they have not converted and are not customers yet. These are the most important people to target with your ads, and probably the easiest to convert.
Depending on what you’re selling, you’ll also want to up-sell or cross-sell different products to users who have already converted. Treat these users as a unique audience rather than grouping them with other retargeting efforts. These customers can become your most valuable marketers and product evangelists, so it’s essential to focus on maintaining high creativity and the right consistency for their ads.
Whether you use the following recommended campaign structure or another format, it is possible the overall targeting strategies will be similar. When creating your audiences at each campaign level, remember to include appropriate exclusions. For example, if you have an ad set of lookalike customers, make sure you also exclude the actual seed list of customers. Also, when creating your audiences, it’s important to channel your inner Goldilocks. Creating small audiences means it will be harder to scale, and building broader audiences can negatively impact ROAS.
The Ad Unit
The ad can be broken down into three parts: creative, copy, and destination URL. It’s essential to test different copy and creative before fully scaling your campaigns. You’ll want to use the best-performing ads when scaling to more substantial budgets.
When creating ads, it’s essential the messaging aligns with the potential customer’s stage in the funnel. For example, it makes more sense to offer a discount code to those further down the funnel, since they’ve interacted with your business and may need the extra incentive to become a customer. Make sure that the creative, copy, and destination work seamlessly together. Don’t advertise one of your products and have the user click to a landing page for another. When creating the image or video for your ad, make sure it’s engaging and genuinely aligns with your customer’s values. This variable will most likely need the most testing in your ad unit.
If your ad is off message and doesn’t connect with your audience, you won’t get conversions. Use metrics such as quality ranking, engagement rate ranking, and conversion rate ranking to track ad relevance, and optimize from there.
A key consideration to keep in mind is the number of creatives you run at a time. Aim for three to six creative variations per ad set. These variations will give you insight on the creatives that are performing the best, and prevent heavy competition within your own ad set that can drive up costs.
Optimize, Optimize, Optimize
Once you have campaigns running, it’s crucial to optimize and make them as efficient as possible. In addition to what has already been discussed on optimization, here are four other tips:
1.Let performance metrics be the guide when pausing inefficient ad sets: This includes parameters such as ROAS and Cost Per Acquisition. If you see less than a 2x ROAS, or a CPA that’s unprofitable after the learning phase has finished, pause it. Immediately.
2.Create custom creatives for ALL ad placements: When you create a video or image only optimized for your Facebook feed, you’re missing out on converting customers on other platforms. It’s vital that you size your creatives for all placements. Check out all ad specs here.
|*TIP* When creating custom images for each placement, use Canva, which allows you to resize images for free easily.|
3.Social proof is everything: When using the same ad for multiple audiences, copy it over “using an existing post,” so all engagements and comments can be visible on both ad units. This will help with social proof and favorable for the Facebook ad auction.
4.Make data-driven decisions: Just like any other marketing initiative, you’ll want to make sure that you accurately track attribution to customers to understand the effectiveness of your campaigns. To do this, append all of your links with UTM parameters, so that you can follow all the conversions to customers from your Facebook efforts. This data will auto-populate in Google Analytics, and even your CRM (depending upon integration), so you can see the actual cost of your customer, and better optimize your existing and future campaigns. Come up with a naming convention for your UTM tags, so you can truly compare different initiatives and evaluate campaign effectiveness. Appending links with UTM tags will also add more color to your conversion funnel. If you see a high bounce rate for users coming from Facebook, this means either your ad messaging is off, or your website isn’t optimized for conversions. Once you have a tracking system in place, and the data is populating into an analytics tool such as Google Analytics or Wicked Analytics, build a reporting dashboard that has all the information you need to optimize your campaigns to reach your goals better.
|*TIP* When creating your reporting dashboard, consider using Google Data Studio. It seamlessly pulls in data from Google Analytics, empowers you to build customizable reports, and auto-updates when changing date range.|
So you’ve built your campaigns, and they’re performing well. But now, How do you scale and start putting more money into your Facebook ads to get even more results?
1.Increase budget gradually. When you see a campaign or ad set that has well over 2x ROAS, increase its budget. However, scale GRADUALLY. A good rule of thumb is to increase the budget by no more than 30% every 48-72 hours. Why? Primarily, Facebook’s ad auction works in tiers that depend on your budget. If you go from level one to level three too quickly, you’ll likely see a drop in ROAS since you skipped level two. Just because you’re performing well at a lower tier doesn’t mean you will necessarily perform well at a higher tier. Give the algorithm time to work, and optimize by scaling budget wisely.
2.Offer the product everywhere you can. In order to scale your Facebook efforts, you want to make sure you’re running ads EVERYWHERE. Running your ads everywhere is a prominent call to action, and it is a missed opportunity to limit your advertising initiatives exclusively to the United States if you have an audience internationally.
3.Expand your audience. Consistently testing and adding new audiences is one of the most effective ways to scale your Facebook ads. You want to get your product in front of the most amount of people who are likely to purchase, so always add new audiences to your prospecting campaign(s). To do so, get creative with your data and build lookalikes with different segments. For instance, try using your highest valued customers or Instagram audiences. You may also want to experiment by making your lookalike audiences off of pixeled Facebook events that are collecting new information. This way, your lookalikes will also regularly be updating. To gain insight on other audiences to target, use Facebook’s Audience Insight tool. It’s a powerful tool that can give you ideas about new audiences by defining a seed audience, and looking at top page likes, categories, and demographics. To truly scale your ad efforts, you must consistently discover new audiences.
4.Update your ads/creative. Similar to testing new audiences, you always need to keep your content fresh and check different ad variants. When you’ve run and spent enough on an ad, you’ll eventually see diminishing returns on it. Avoid this by trying new creative, experimenting with different offers, and trying different messaging. However, before duplicating them over to your prospecting campaigns, test them to ensure they’re high-performing ads, and resonate with your audience. Doing this will make it more likely that your campaigns maintain a healthy ROAS as you increase the budget. Consider adding catalog ads to your mix with Dynamic Retargeting and Broad Prospecting campaigns. Catalog ads is an excellent way to expose audiences to your line of products, and it doesn’t involve much creative work.
5.Work with the algorithm, rather than against it. Recently, Facebook released the Power5 tools; these tools center around consolidation and automation. You must learn to work with these systems. Understanding these systems can help you simplify your ad accounts, enable CBO, use automatic placements, and experiment.
Image courtesy of Facebook: https://www.facebook.com/business/m/power-five
Generally, scaling your ad efforts requires a lot of testing. However, through this form of testing, you’ll discover what works for your audiences and develop a personalized scaling strategy. With the PPC landscape continually changing, it’s essential to stay up to date on the newest features and rules your paid social platforms release. Facebook is moving towards automation and consolidation, and working with these changes will impact how you move forward with your strategy and how successfully you can scale Facebook ads. See something missing from this guide? Feel free to email me at [nogood.io email here].