The goal of this post is to provide a detailed walkthrough of how I create ads for my online stores. I want to go through it from the very beginning, to scaling the winners. Even if you’re very familiar with Facebook ads and the creation process, I hope to provide a valuable step-by-step process anyone can follow and use to improve their odds of success on Facebook. In particular, those running online stores.
I’m going to go through everything from choosing products to test, to creating the first few ads, to determining the winners, and finally, scaling the best performing ads.
Here’s the ad creation process we will follow, and repeat, for every campaign:
It will make more sense as I go through each step in detail. I just thought I’d try to visualize it as it is a little complex.
The first thing before anything else is we need a strong offer. I’m not going to cover this here but I laid out a post which provides a lot of tips and ideas to create a strong offer, which should help you when you’re deciding which product to test on Facebook and how you will position it.
A strong offer is very important. I think it might be the most component to the entire ad. An amazing offer with bad targeting or a crappy ad can still work very well. In fact, I see it all the time on Facebook. Offer people $100 for $50 and it the colors, copy or interest targeting won’t matter.
Next, we need to create the actual ad itself. Again, I covered this before in creating an ad that gets sales and attention. Read it. It will show you how to create a photo post ad on Facebook and why this format for an ad is the best. It will look something like this:
Also, don’t forget the Facebook pixel. I don’t think it makes sense for me to explain what it is or how to install it. There is countless documentation from Facebook explaining how it works, and if you’re using Shopify (hint: you should), there’s documentation on installing the pixel on your store. The pixel will track your sales and allow you to retarget customers.
Finally, you need to determine your budget before anything else.
So first, I should say that it’s hard for me to determine how much you should spend on ads. Even if I knew exactly what you were selling, it depends a lot on you. I have to be responsible here. I’d love to tell people to spend X, but then if they lose all their money, they come back and blame me for encouraging them to throw all their money at Zuckerberg.
So, here’s how you need to think about it. If you have little to no experience with Facebook, consider this your cost for tuition. You’re going to learn more the more you spend. If you spend $50 and give up, how much do you think you will have learned about Facebook? Probably very little. The more you put into it, the more you get out of it… and that doesn’t necessarily mean profit.
This also doesn’t mean spend $1000 all at once and boom, you’re a Facebook genius. It isn’t 1:1.
So ultimately, you need to be comfortable losing the amount of money you’re willing to spend to learn this stuff. If you come out and make a few sales, great, but if you have zero to no experience, you can’t expect miracles.
Do Facebook ads work? Yes.
But I had to put in a lot at first to learn it.
Okay, so now that we got that out of the way, allow me to provide a few suggestions.
For a brand new campaign, I like to spend around $10-$20 a day for an engagement ad (more on this later) and $20-$50 a day for a conversion ad (also more on this later). Engagement ads I might let run for a day or two and conversion ads I let run 3 full days. Again, I will go over this process later. But for now, all you need to know is that minimum, I will spend $80 on a campaign before I kill it. Usually, it’s a little more. $100 is a nice round number to spend before deciding to kill, tweak, or scale an ad.
So, if you don’t spend at least $100 on a test, I don’t believe you have enough information to determine whether or not what you’re doing is working. A lot of people give up way before that. They’ll give up after spending $50 or even $20 on Facebook.
Alternatively, there is what I like to call, the breakeven budget. This is a much more conservative approach for people who can’t afford to be -$100.
The idea here is to take the profit amount from the product you’re testing on Facebook, and using that as the daily budget.
For example, I’m selling sunglasses for $50 on Facebook. The cost per unit sold is $20, so I earn $30 profit on each sale I make. This $30 would be my daily budget. If I can sell at least 1 pair of sunglasses a day, then I keep running the ad. If I can’t, I kill it immediately and try something else.
Again, this is a very slow approach and you might be killing off ads too early with this approach.
I recommend the $100 approach to budgeting each ad.
Ad Creation Process
Now that we have all the initial components in place, it’s time to create our first ad campaigns together.
By now, you should have created a photo post, which is what we will be using as an ad. We will also be focusing on creating an ad that focuses on the News Feed only. This is where the photo post ad shines. No sense in paying for sidebar or Instagram placements, at least not yet.
For this photo post, we’re going to create two campaigns in Facebook: one optimizing for post engagement, the other optimizing for conversions, usually purchase conversions.
The post engagement campaign is to help build likes, comments and shares on our photo post. We want to give the ad some social proof. We might get some clicks and sales from this campaign, but it’s not expected. This is simply a small budget, short-lived campaign to make our product and ad look popular. This helps build trust and encourages Facebook users to stop and see what all the fuss is about.
The conversion campaign is the one we will monitor closely, tinker with, and hopefully scale if all goes well. For our online store, we can optimize for a few things: View Content, Add to Cart, or Purchase.
Your instinct might be to always optimize our ad for Purchases but if you have 0 purchases, or if your Facebook pixel has tracked 0 purchases, what data would it use to optimize your ad for? So, instead, we want to optimize for the event we have the most data around. Usually this is View Content, which is essentially clicks to our website.
Create the engagement ad
Let’s start by creating the engagement campaign first.
Create the campaign and choose Post Engagement as the objective.
Within the Ad Set, we’ll need to choose targeting options. Targeting here isn’t that important. Facebook does a good job putting the ad in front of people that will Like and Comment on the post, thus building our social proof. Choose an audience size that is around 1.5 million or so. If you want more bang for your buck, choose Worldwide for the location, to get cheaper and more engagement.
Make sure to Edit the Placement. Disable everything except News Feed. We want to get engagement on our News Feed ad. No sense paying for engagement anywhere else since we’re focusing on a New Feed placement.
As for the budget, as I mentioned earlier, $10 a day is a good starting point. We’re only going to let this ad run for a day or two. Facebook will get us hundreds of Likes and a dozen or so comments very quickly, so you won’t have to spend much.
Under Ad, since we already created our ad on our Page, beside Create Ad, select Use Existing Post and find the post you created.
This is the post we want to drive engagement on and build social proof.
You may also want to attach UTM tags here.
Don’t forget to select your Pixel here as well. Create and publish the ad.
Create the conversion ad
Now it’s time for the conversion ad. This campaign will use the same ad, the photo post you created earlier, but this campaign will work to bring us sales.
So, create the campaign, very similar to before, but set the objective to Conversions. Under the Ad Set, we can choose which Pixel event to optimize for.
What event to optimize for?
As I mentioned earlier, we might be tempted to optimize for Purchase. But, since the Pixel has no data, it might not make sense to start here.
As far as I understand it, when Facebook tries to optimize your ad for Purchases, it tries to put your ad in front of people that are likely to take that action.
How does Facebook know? It takes your past purchases, uses hundreds (likely more) of data points and finds other Facebook users that match those data points, patterns and behaviors. It’s super-complex, and I have a lot of faith in it, but all you need to know is that you need a lot of data for Facebook to work off of.
The general rule of thumb is Facebook needs 20 actions per day to optimize successfully for it. So, for example, if you optimize your ad for Purchase conversions, you need 20 Purchases a day (from Facebook) for Facebook to successfully optimize for it and get you purchases. A paradox, huh?
So, this is why I recommend starting with optimizing for View Content or Add to Cart. The more data Facebook has to work with, the more likely our ad with succeed.
For example, let’s say you get 80 View Content actions per day, 20 Add to Cart actions per day, and 5 Purchase actions per day. Which would you optimize for? View Content has the most actions and data, but it’s the furthest from our goal. That audience might not be close enough to the audience we want to reach to get sales. Also, Purchases doesn’t have enough actions or data. I still might test optimizing for it at this stage, but I might eventually change the objective to Add To Cart if I don’t see any sales, or if the ad is not profitable.
The idea is we start with the actions we’re getting the most of, that’s closest to our goal, and we slowly graduate on the action we optimize for. Go from View Content, to Add to Cart, to Purchase.
You can also start with Purchases, and if you don’t get any sales but get a few Add to Carts, try to optimize for Add to Carts instead.
Targeting and audience size
For the targeting, I would recommend keeping gender and age broad. The only exception is if your product is specifically for women, or specifically for men. I wouldn’t make any assumptions yet, until we have data from Facebook.
We then should begin layering interests until we have an audience size of roughly 1 million to 2 million. You’re better off starting with less than 1 million, than more than 2 million, if you can’t get an audience within that 1-2 million sweet spot.
For interests, you want to stack specific interests to reach that sweet spot audience size. The interests should be specific enough that your ad is shown to people passionate about the interest you’re targeting, not just people who just “like” the interest. These people should live and breathe what you’re targeting.
For example, if you’re selling a product targets golfers, targeting the interest “golf” or “tiger woods” might not be your best bet. The reason is you might reach casual golf fans, or people who are simply fans of Tiger Woods, but not actually die-hard golf players and fans.
As you can see, the Pages users like that like Tiger Woods isn’t very related to golf.
Instead, you would choose a golfer only hardcore golf players and fans would know, such as Kenny Perry. If you’re not a golf fan, you might not have heard of Kenny Perry but it’s likely you know Tiger Woods. Maybe you even like Tiger Woods but never played a game of golf in your life. You’d be a terrible prospect for an ad trying to sell you golf gloves.
You can continue doing this with golf magazines, and golf tv shows. Audience Insights is good to discover more niche interests to target and it’s what I used to find related Pages, as shown above.
Budget and placement
For the budget, use the earlier section as a guide. I would recommend a daily budget of $10-$20. We will let this ad run for 3 full days so expect to spend at least $30-$60 on this campaign alone.
Again, make sure you edit the Placements and only choose the News Feed. You can keep both Desktop and Mobile for devices, for now, until we get data and begin scaling our ads.
Let this ad run for a full 3 days. You don’t want to get over eager on an ad that gets no sales the first 2 days, as it could easily have a monstrous 3rd day after Facebook optimizes your ad. You need to give Facebook some time to do its thing. The only exception to this is if after 1 or 2 days, your relevance score is very low (1-5) or if you have no clicks.
After 3 days, I will evaluate my conversion ad. By this point, the engagement ad should have been paused already, and you should have a few hundred likes on the ad, that helped build social proof.
To evaluate my conversion ad, I use a red light, yellow light, and green light system.
Red light: After 3 days, if the ad has spent much more than it earned and the cost per action is not profitable, I will immediately kill the ad. Ads that get zero sales are a hard red light. I recommend trying a different product from here, this campaign is a bust.
Yellow light: After 3 days, if the ad broke even, or was barely unprofitable, I will do 1 of 2 things. I might allow the ad to run another 3 days but watch it very closely to see if it becomes profitable. The other option is to acknowledge that the offer is promising and to try a different ad or different targeting. The different ad will have different copy and a different product image but with the same targeting. The different targeting option will test other interests but keep the same photo post ad.
Green light: After 3 days, or after allowing a Yellow light ad to continue, if the ad is profitable, we have a winner… kind of. We don’t scale just yet. We want to ensure it isn’t a fluke. To do that, we now wait until the ad gets 20 sales. Once the ad receives 20 sales, we evaluate. If the ad is profitable, we move on to scaling, which I’ll talk about next. If the ad turns into a Yellow light, we will follow the Yellow light procedure and repeat process.
Scaling the winner
We have a Green light ad that has 20 sales, how do we scale it? Is it as simply as doubling the budget? Tripling it? Doubling the budget will double the amount of purchases we get, right?
Well, no. As you’ll eventually learn, scaling on Facebook isn’t 1:1. An ad that earned $300 after spending $100, won’t earn $3000 after you up the budget to $1000. Instead, it might earn $2000. But that’s okay. We want to scale slowly and keep our profitable ads profitable.
I don’t recommend editing Ad Sets, ever. Editing Ad Sets has the potential to break the ad. Facebook has done such an amazing job optimizing the hell out of that $20/day budget you set, that if you change the budget to $100/day, it will have to re-optimize everything and all the work Facebook has done will be destroyed.
You can safely increase the budget of an Ad Set by 10% every 24 hours, but instead, I recommend simply Duplicating the winner Ad Sets.
So take that $20/day budget Ad Set and duplicate it into another $20/day budget Ad Set. After 3 days, if the new duplicated Ad Set is a Green light winner, Duplicate it again, but maybe this time, set the budget of the new Ad Set to $40/day. So now, you’re spending $80/day total.
This is how I recommend you slowly scale your ads.
You can also begin to look at ages, genders, and devices that Facebook is underserving your ads to. As Facebook optimizes your ad, especially on a winner, it will begin to serve your ad, over and over, to what it thinks is most likely to get you sales. If users between the ages of 24-35 are buying your product, Facebook will begin to serve your ad more to that age range. However, you could be leaving money on the table.
Look at the breakdown of your ads and see where there is an opportunity. Look at the ages, genders or devices that have a great cost per action, but might have the lowest impressions.
As you can see from my age breakdown, age groups of 65+ and 18-24 have a low reach but great Cost Per Purchase.
A great test would be to duplicate this Ad Set, but test these Age Ranges in the new Ad Sets.
As you get Purchases, you also want to create a Custom Audience of your Purchases from the last 180 days. This way you can exclude this Custom Audience from your ads (no sense showing customers an ad for something they already bought) but more importantly, you’ll be able to create a Lookalike Audience.
Lookalike Audiences allows you create a new custom audience based on traits from your customers. It’s an audience you can target that’s unique to you and very similar to your customers. It allows you to find more people like your customers, without needing to do a lot of dancing around with Interest targeting.
When you have a customer audience size big enough to create a Lookalike Audience (20 customers minimum), you can then create ads targeting this Lookalike Audience, while excluding the Interests you’re targeting in the previous ads. So I might create a new conversion campaign, targeting my Lookalike Audience of purchases from the last 180 days, and exclude Kenny Perry as an Interest, since I now have a few other Ad Sets targeting that Interest, and I want to eliminate overlap as much as possible.
I recommend testing Lookalike Audience after you have 50 sales or so. The more customers you have to build a Lookalike Audience off of, the better. Facebook likes having a lot of data to work with, so I would stick with the Interests that are working for you, especially if the audience size in total is between 1-2 million. That will give you a lot of time before you run that interest dry and need to move on to Lookalike Audiences.
I will attempt to explore a lot more of some of the concepts covered in this blog post in the future. I didn’t want to make this too long and go outside the scope of this post. My goal was to share my scratch to scale ad creation process, in as much of a nutshell as possible.
If I missed anything or you have any questions, please leave them here. I intend to update and add more to this post in the future, when I’m able to dive deeper in separate posts.