How to Win Big with Facebook Ads for eCommerce in 2020

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Here’s the deal.

Everyone keeps talking about how much more expensive Facebook ads for eCommerce are in 2020. But that’s not really the problem.

The real problem is that too many agencies and media buyers haven’t updated their playbook for the new decade.

They’re still running the 2018 Facebook ad playbook which is outdated.

If you want to win and WIN BIG with Facebook ads for eCommerce in 2020, then you need to make sure your ad buyer is using the following strategies.

#1: Go Broad with Audiences

A few years ago, the goal was to go tight with audiences and to go as niche as possible.

You just wanted to show your ads to women aged 21-25 who like Chanel, Louis Vitton, and Burberry. Now, the game has changed.

Instead of going narrow, you want to go broad.

You want to give Facebook the biggest audiences to work with, and then let them decide who’s going to buy what you’re selling.

Ok, sounds great, but why does this work?

The answer is that the more broad you go with your audiences, the lower your costs will be because the smaller the audience, the more Facebook charges you to reach that audience.

In this example, by targeting women in the U.S. aged 20-35 you’ll be paying less to reach an audience of 47,000,000.

The slightly longer answer is that Facebook has gotten really good at finding customers for you, so it’s better to go broad than to limit Facebook by only showing your ads to a small audience.

Pro Tips

  1. Test No Targeting: The first thing you can do is test a really broad audience with basically no targeting. This could be all of the women in the US aged 20-35. Instead of adding interests and trying to narrow things down yourself, you let Facebook target a broad audience and then decide who to show your ad to.
  2. Expand You Audience: The next thing you can test is expanding your audience. Facebook has a new option (seen below) where you can click to let Facebook automatically expand your audience to include anyone else they think should be included based on the targeting criteria you put in. Once again, we recommend not limiting Facebook and instead giving them the biggest possible audience to work with since it will lower your overall costs which in turn will lower your cost per acquisition and increase profitability.
By clicking “Expand” you give Facebook the ability to expand your audience in order to find more potential customers.

#2: Make Sure You Optimize for Purchases

The next thing you need to do is to make sure you’re bidding for purchases, but there’s a pretty good chance your ad buyer isn’t.

Instead, your ad buyer is probably bidding for engagement, or clicks, or, slightly better, add to carts.

The problem with optimizing for anything besides purchases is that Facebook is really good at getting you whatever it is that you optimize for.

If you ask for engagement, they’ll find people who are more likely to engage but not necessarily purchase.

If you ask for add to carts, they’ll find people who are more likely to add products to cart but who may not finish the transaction.

The problem with this is that you don’t make money when someone engages with your ad or adds a product to your cart. You only make money when someone completes the transaction.

So, instead, you want to make sure you’re optimizing for purchases…at every level of your funnel.

Your ad buyer may try to argue with you about this. He might say, “We’re bidding on engagement at the top of the funnel and then purchases at the bottom.”

Sorry, that’s just not the way to do it in 2020. We’ve seen over and over and over again that bidding for purchases is the better option.

Even if you try to bid for add to carts, you won’t get as many sales as you will if you optimize for purchases.

So instead of trying to outsmart Facebook, we suggest you leverage its machine learning by letting them optimize for purchases.

Pro Tips

  1. Optimize for Purchases at Every Level: Whether you’re showing ads to cold traffic, warm traffic, or hot traffic, make sure you’re optimizing for ads at every level of the funnel.
  2. Optimize for What You Want: If for some reason you are looking to get more engagement, get video views, etc., then it’s OK to optimize for those. The main point is that you want to optimize for whatever it is that you want Facebook to get for you.

#3: Make Sure You Spend Enough at the Top of the Funnel

This is probably the biggest mistake we see ad buyers make.

eCommerce store owners invite us to do a campaign audit, and then while we’re looking around, we realize the ad buyer is spending 50% of the budget (or less) on new traffic (prospecting) and 50% on people who’ve visited your site (remarketing).

This is a big mistake.

You see, in order for your remarketing ads to work well, you need enough people in your funnel to remarket to.

What we’ve learned is that approximately 70% of your budget should target new visitors and 30% of your traffic should target people who’ve already visited your site.

When you do this, your total return on ad spend (ROAS) goes up because you have enough people in your funnel to show remarketing ads to. If you don’t spend enough on the top of the funnel, your blended ROAS goes down and you get fewer purchases overall.

Pro Tips

  1. Follow the 70/30 Rule: To get the best results, make sure you follow the 70/30 rule with approximately 70% of your budget going to new traffic and 30% to remarketing, although these numbers can slide around a bit and 75/25 may make sense for you, etc.
  2. Measure Blended ROAS: Once you start spending ~70% of your budget on prospecting, you’ll need to measure the blended ROAS across your account to get the best results because it’s ok if your prospecting ROAS is 1.5 as long as your blended ROAS is above your profitability target.
The goal is for your total blended ROAS to be profitable across the entire account.

#4: Creative Matters a Lot

Social media users are more adept at scrolling past content they’re interested in than ever before.

This means your ads need to really stand out.

And for your ads to really stand out, your ad creative needs to be on point.

And not only do your designs need to be on point, but your videos need to get the point across very quickly.

Here’s why…

Stop and picture the average social media user for a second. They flick, and stop, flick, and stop, over and over again.

If your ad doesn’t stand out, it’s going to get quickly flicked, and if it gets flicked, you’re not generating sales. Or if your video takes too long to get to the point, it’s also going to be flicked.

This means that you need to focus on grabbing social media users attention…as quickly as humanly possible.

Pro Tips

  1. Make Sure Your Creative Stands Out: Whether you use a bright color as the background, use a unique photo, or whatever, you need to make sure your ad stands out from the newsfeed so it grabs attention.
  2. Try Going Native: In addition to standing out, you should try going native with your ad. What this means is that you design your ad in a way that it doesn’t look like an ad since people are conditioned to experience banner blindness and ignore ads. To get around this, you can try using an image that looks similar to something a friend would post so it gets noticed and not ignored.
  3. Make Sure Your Video Ad Has a Hook and a Good Pace: One mistake people make with video ads is backing into them too slowly. Instead of starting with a hook that grabs people’s attention, they start out slow and then gradually make their way to the main point. This is a bad idea. You want your video to have a strong hook and then a good pace that maintains attention throughout the duration of the video. It’s ok if your video is a little longer, as long as it has a strong hook and a good pace.
  4. Test Gifs: Something we’ve been having a lot of success with is Gifs. Gifs bridge the gap between static photos which are the most basic and videos which are the hardest to produce. By adding a moving element to your ad, you increase the likelihood that it will stand out and get noticed. Below is an example of a gif we used that performed well.
This is an example of a gif ad that performed well for Black Friday.

#5: Dynamic Product Ads

If you’re not using dynamic product ads, you need to start. Today. Right now even.

So what are they and why are they so amazing?

Dynamic product ads are the ones you see in Facebook where a store shows you a carousel of products starting with the ones you viewed the most on their site.

Let’s say you look at a pair of loafers at DSW Shoe Warehouse.

If DSW has dynamic product ads set up, they’ll be able to retarget you with the product(s) you looked at AND a carousel of related products. This ends up being a win-win for everyone because the retailer shows you a product you’re more likely to purchase and the customer sees a product they’re actually interested in.

Here’s what they look like.

DPA ads show a carousel of products to customers based on the specific product they viewed on your site.

The reason they’re so valuable is that they work. Really well.

In fact, dynamic product ads are one of the top performing campaigns across most of our accounts which means if you’re not using them, you’re definitely missing out and leaving money on the table.

Pro Tips

  1. Use DPA for Remarketing: First, you need to make sure you’re using your DPA ads for remarketing. We like to show ours to people who’ve viewed a product page or added a product to cart in the last 5 days, past customers, and people who purchased recently since all of these groups don’t need a fancy lifestyle image or video to buy a product.
  2. Use DPA for Broad Prospecting: Not only can you use DPA ads for remarketing, but you can also use DPA ads to reach broad prospecting audiences. This may seem counter-intuitive, but in many instances, it not only works, but works well.

#6: Don’t Forget about Your Past Customers

The magic formula for generating more eCommerce revenue is Traffic X Conversion Rate X (Average Order Value/Lifetime Value).

The only problem with this formula is that most stores only pay attention to traffic and conversion rates. This is a bad idea because everyone knows it costs more to acquire a new customer than to sell to a past customer.

This is why we always make sure we set up our campaigns to target people who’ve purchased in the past.

These past customers are more likely to convert at a lower cost and with a higher return which increases your overall revenue.

Think about it this way.

Let’s say you pay $15 to acquire a new customer and your average order value is $50. The good news is that you can be profitable with these numbers, but you’ll be even more profitable when this same customer purchases another product at $100 with a $10 acquisition cost. This brings total acquisition costs to $25 and total revenue to $150.

This also means that if you’re not showing ads to your past customers, then you’re leaving money on the table and missing out on profitable revenue opportunities.

Pro Tips

  1. Target Past Customers: The first step is to make sure you have campaigns and ad sets targeting past customers. This will help you generate more revenue at a lower cost.
  2. Use Your Pixel + Customer Lists: Two ways to target past customers is to show ads to people who’ve purchased in the last X number of days (we do 180) and to upload a CSV of your customer emails. Both of these are great audiences for generating more sales.
  3. Use Klaviyo: Klaviyo may be super difficult to spell but makes it really easy to set up and automate past customer audiences.

#7: Don’t Overlook Average Order Value

Average order value (AOV) is another metric you shouldn’t overlook when it comes to growing your store’s sales.

Yes, you can grow sales by getting more people to your site and converting a higher percentage into customers, but you can also grow sales by increasing the average order value for the traffic you already have.

Let’s say, for example, that you spend $100,000 to send 200,000 people to your site. Out of those 200,000 visitors, 3.5% convert into customers, which means you have 7,000 purchases. If the average order value is $50, then your total revenue is $350,000.

Now let’s say your costs stay exactly the same but your average order value goes up to $75. Overnight, your revenue goes up to $525,000 without spending more money on ads.

This example shows the power of paying attention to average order value and not just traffic and conversion rates.

Pro Tips

  1. Use Upsell Plugins: One way to increase average order value is to use upsell plugins where you ask people who buy a shirt if they want to also buy a hat, etc. Bold Upsell is one example of a plugin you can use to increase average order value.
  2. Offer Discounts for Bigger Orders: Another strategy you can use is to offer a discount or free shipping when customers purchase more. You could offer free shipping or 10% off orders over $50, for example, to convince people to add one more product to their cart so they save money or get free shipping.
  3. Run a Tiered Sale: Something else you can do is run a tired sale where customers save more when they buy more. $50 purchases get 10% off, for example, while $100+ purchases get 20% off. This is a great strategy to use for big sales like Black Friday or Christmas.

Making Sure You Win with Facebook Ads for eCommerce in 2020

Hopefully, you learned something useful from reading this post about how to win with Facebook ads for eCommerce in 2020 because our goal here at ConversionEngine is to help more eCommerce stores win bigger and grow faster.

We’re currently helping brands like Tuck and Bundle, Aletheia & Phos, and Armadillo Hat Company set new sales records and accelerate their growth.

I also recommend checking with your ad buyer to make sure they’re leveraging these strategies for your 2020 ad buying. If not, then there’s a good chance this is the reason your ad performance isn’t as strong as it could be.

Let us know if you have any questions about these strategies. If not, best of luck making 2020 your best year ever!!!

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Joseph Putnam

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