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By Susana Cipriota
Co-Founder at Funnely
CMO & VP Product
2
1 The Game: Full Funnel Strategy
2 Formation: Facebook Pixel Setup
3 The Team: Ecomm Variables Impacting Facebook Ad Performance
4 The Plays: Facebook Ad Funnel Components
	 4.1 Targeting
		 4.1.1 Demand Generation
		 4.1.2 Demand Capture
		4.1.3 Placement
	 4.2 Creativity, Promotions and Ad types
		 4.2.1 Attention
		 4.2.2 Interest
		 4.2.3 Desire
		 4.2.4 Action
		4.2.5 Loyalty
	 4.3 Bidding			
		 4.3.1 Actions
		 4.3.2 Daily Unique Reach
		 4.3.3 Impressions
		 4.3.4 Clicks
	 4.4 Budget
		 4.4.1 All About Reach
		 4.4.2 All About ROI
		 4.4.3 All About LTV
5. Review The Film: Measuring for Success
6. The Kick Off: Building the Funnel
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Glossary
3
ith 1.65 billion monthly active users,
1 billion stories posted every day,
100 million hours of video watched
every day and 2 billion photos shared every day
Facebook is the best channel for Ecommerce
advertisers to reach new qualified leads, exist-
ing prospects and clients. It’s advertising system
has become very robust and full of new features
every month. 2.5 million monthly active ad-
vertisers utilize Facebook, so e-retailers need
a deep understanding of all the best practices
to optimize their budget more than ever. From
Ecommerce components and KPIs to specif-
ic targeting, budget, bidding, placements and
creativity that covers every step of the sales
funnel, you’ll need to use them all when forming
your ad strategy on Facebook.
Top performing Facebook ads for Ecommerce
come from managing a group of campaigns
covering every step of the funnel. The funnel
allocation approach is a must for ecommerce
advertisers as it’s granularity allows for better-
performing ads by lowering the cost per
purchase and boosting ROAS and sales.
Once the custom audience events are placed
in your ecomm site you can start feeding
them right away. The magic will not happen
if you avoid this step. The granular allocation
lets you optimize your investment between
lead gen and retargeting campaigns. And the
Full Funnel Strategy
W
REMEMBER, THE AUDIENCES YOU WILL BE TARGETING IN EACH
CAMPAIGN ARE JUST AS IMPORTANT AS THE ONES YOU ARE
EXCLUDING SO YOU CAN AVOID OVERLAPPING MESSAGES.
more granular you map all the steps of your
sales funnel, the lower your average cost of
purchase will be as you are able to offer better
promotions to highly relevant prospects. This is
how your group of audiences should look like:
5
1
1 -(2,3,4,5)
2 -(3,4,5)
3 -(4,5)
4 -(5)
5
Qualified Leads
Homepage Visitors
Product Visitors
Add To Cart
Clients
2
3
4
4
Formation: Facebook Pixel Setup
ith the world of ecommerce always
changing for marketers, using
current, cutting-edge technology
is a must if you want to take your online sales
metrics to the next level.
Facebook has upgraded its pixel technology
by combining the power of its multiple old
pixels, conversion and custom audiences all
into one. As an e-retailer, a deeper under-
standing of its scope and possibilities will help
you plan and execute a rocking Facebook
(and Instagram) ad strategy. Today there are
already 2.5 million active advertisers on their
platform, so a granular allocation of your ad
dollars is more important than ever if you
need to lower your cost per conversion.
Implementation of the Facebook pixel is
required to structure a sales funnel for your
ecommerce site. With this structure, you
will be generating leads to feed the funnel
and then remarketing them depending on
the actions they take on your site to finally
convert them into clients or re-purchasers.
The pixel consists of a base code and several
events. You can use the 9 standard events
Facebook has put together or customize your
own. This is a funnel example with 6 of them:
Some standard retargeting platforms haven’t
been built with a performance focus, so
they don’t have the ability to track events.
However, this is a must if you plan to master
the art of Facebook ads for Ecommerce.
Facebook has put together a group of
standard events that will help you attribute
conversions in your reporting. These include
AddToWishlist, AddToCart, InitiateCheckout,
AddPaymentInfo, Purchase, and more (check
the funnel below as an example). Although
you’ll need a developer to insert a Facebook
pixel and set up events on your site, the time
investment is worth it.
You need to be aware of these 3 powerful
features available with the Facebook pixel:
1- BUILDING REMARKETING AUDIENCES:
The pixel will be triggered by the standard
events and Facebook will identify the user
depending on their behavior on your ecom-
merce site, generating audiences for your ads.
2- CONVERSION OPTIMIZATION: Optimiz-
ing your ads for conversion will allow Face-
book to deliver them to people most likely to
visit, add to cart, or purchase your product.
3- CONVERSION TRACKING: You can learn
how successful your ads are by reporting
on events. Keep in mind that revenue is not
always a great KPI for your ads. Depending on
the level of the funnel you are targeting, the
KPIs should change.
W
5
The Team: Ecomm Variables Impacting
Facebook Ad Performance
Ad Variables
Targeting
Budget
Bidding
Placement
Creative
Ecomm Variables
Market
Pricing
Business Margins
Product Life Cycle
Purchase Frequency
Product Catalog Size
Ecomm KPIS
ROAS
CAC
LTV
AOV
Churn
Delivery
Ad KPIS
CPM
CTR
CPA
CR
Frequency
Relevance Score
very online business has it’s own components which
will more or less influence it’s Facebook advertising
performance. Although all of them are variables on
the business side, many of them must remain stagnant due
to their importance in the business model. However, it is
important to understand their relation to ad metrics. Let’s
take a look at some of them in detail:
E
6
The Team: Ecomm Variables Impacting Facebook Ad Performance
MARKET: Each market (Country, Region, City)
has it’s own online behavior and therefore, it’s
own average CPM. While targeting developing
markets yields a lower CPM, it will usually re-
sult in lower CTRs or conversion rates. Tip: It’s
always a good idea to test multiple markets in
different ad sets and learn from their metrics.
The 2015 Q4 average CPM for the Americas
was $8.01, $4.61 in EMEA and $3.46 in APAC.
PRICING: Affordable products usually produce
a shorter path to purchase due to the emo-
tional and impulsive process, while expensive
products require multiple touch-points (ad
impressions) between the lead and the
brand before converting them into a client.
However, a higher product price will typically
result in a higher margin. Tip: Up-selling
strategies with DPA (direct product ads) will
help you raise the AOV (average order value)
and leverage your biz margins.
BUSINESS MARGINS: The higher your
business margin, the more you can bid in the
auctions to win ad delivery. If your margins
are very constrained the space to test, learn
and iterate is very limited. Always include
margins in your ROI formula to see the big
picture and the real ROI. Tip: Some adver-
tisers assign the real valvue of the product
(Price - Cost of product) instead of the price
in the Product feed so they can get the actual
ROI driven by DPA directly in Facebook’s ad
reporting tool.
PRODUCT LIFE CYCLE: The product life cycle
is the progression of an item through the four
stages of its time on the market. The four
life cycle stages are: Introduction, Growth,
Maturity and Decline. The acquisition cost
level is directly correlated with this cycle. The
earlier the business is in the cycle, the more
expensive the price will be to get a new client
due to the aggressive demand generation
process you’ll need to pursue. Tip: Ensure
your relevance score is as high as possible so
you can lower your CPM.
PURCHASE FREQUENCY: The number of
times a customer makes a purchase in a given
period of time will be directly correlated with
the product category. If the purchase frequency
for your brand is lower than category rates, your
customer is likely spending their money on your
competitors. Categories that have high levels
of purchase frequency also lend themselves to
high levels of attrition among customers. Tip: If
your company is based on a subscription model
(No purchase frequency), retargeting clients will
help lower churn.
PRODUCT CATALOG SIZE: We all agree that
the best-performing Facebook ads are Dy-
namic Products Ads. DPA are a cross-device
retargeting solution that helps e-marketers
promote their entire Product Catalog. It’s
a robust ad type that combines dynamic
offerings with optimized targeting. However,
it requires a wider product catalog offering for
better performance. If you are promoting a
uni-product company, this tool is not for you.
Although all of the online business
components are variables on the
business side, many of them must
remain stagnant due to their
importance in the business model.
However, it is important to
understand their relation
to ad metrics.
7
The Plays: Facebook Ad Funnel Components
TARGETING
reating successful Facebook ad cam-
paigns for ecommerce usually requires
rigorous testing and constant optimiza-
tion. Testing helps e-marketers like you identify
small tweaks you can make to your campaign
settings to drastically increase ROAS.
While getting the best value from your ad
spend by reaching relevant audiences for your
business is challenging, there are many best
practices and tips you can use to guide you in
this art. The demand generation and demand
capture stages should be approached sepa-
rately in terms of your targeting strategy.
C While getting the best value from
your ad spend by reaching relevant
audiences for your business is
challenging, there are many best
practices and tips you can use
to guide you in this art.
8
The Plays: Facebook Ad Funnel Components - Targeting
B. Demand Capture
Once your qualified leads have visited your
ecommerce site, it’s time to remarket to
them based on their behavior on your site
to ensure conversion and a higher return on
investment. Custom audiences and website
custom audiences are great technology tools
for delivering retargeting campaigns. Ensure a
Facebook Pixel and some standard events are
in place, and you’re ready to go!
A. Demand Generation
Lookalike audiences and interest-based target-
ing are two tools you can manage to generate
qualified leads to your ecommerce site. Reach
is crucial when generating demand so you can
scale up your results. It’s important to test both
targeting types (avoid using them in parallel to
avoid overlapping) so you can learn from metrics
and optimize. You can combine both of them to
narrow big audiences and ensure you are target-
ing only relevant leads. All Lookalike audiences
are based on a custom audience (From a datafile
or from your Website). The suggested size of
the seed audience is at least 2,000 people
and if possible, use a higher-valued-clients
base to leverage the relevance of the lookalike
audience. If not possible, you can use clients,
basket abandoners, or product visitors as seed
custom audience, as well. The best practice to
test lookalike audiences is by implementing a
process called: Nested Lookalikes. It means
creating 2 o 3 different Lookalike audiences
(Using the relevance vs wide percentages
available, from 1% to 10% of the country) and
testing each of them in different ad-sets. You
need to ensure you are excluding the ones that
are included in the other ad-sets so you avoid
overlapping. You will learn which audience
brings the lower cost per action and the highest
ROI (Usually the one with the highest CPA, but
is not always the case).
VS.
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The Plays: Facebook Ad Funnel Components - Targeting
Placements
Mapping and understanding the path to online
purchase is critical for e-marketers as this
exercise will reveal critical touch-points of
their customer’s journey to a purchase. Data
confirms that every industry is different and
that multiple parameters (purchase values, the
length of the journey, client profile) influence
the customer behavior through the marketing
funnel, so you don’t always seal the deal by
delivering a single ad. While challenging, it’s
crucial e-marketers design campaigns that
deliver the right message at the right moment
in a customer’s journey to purchase. Gener-
ating demand with a lead gen campaign and
capturing this intention with granular retar-
geting afterwards is a good starting point. But
the only way to optimize ROAS is by testing,
measuring and learning from each iteration and
adjusting your marketing budgets accordingly.
To complicate matters, most customer journeys
take place on different devices at home, on
the go, and at work (9 in 10 consumers start
an activity on one device and finish it on
another). But don’t panic! You can measure all
of these cross-device paths and attribute the
right value to each of them in your Facebook
advertising reports. In general, the smart-
phone is considered the go-to device - 76%
of adults who own one use it while they are
out and about. It’s always with them and is
most commonly used for communication and
social activities. The tablet is viewed as the
entertainment hub and is often used at home,
where 43% of tablets are shared with others.
The laptop or desktop is the workhorse —
80% of online adults that own one use it at
home, and it tends to be dedicated to import-
ant tasks like work or managing finances.
The world is no longer transitioning to mobile,
as they are already there. With 1.2 billion smart-
phones in the world, people spend 3 hours of
their day on their mobile phone. 20% of the
monthly time spent on mobile is consumed by
Instagram, Facebook and Messenger. As a result,
these are the channels you should be utilizing to
reach your audience. Mobile placements (Face-
book News feed Mobile + Audience Network +
Instagram) are best ones for creating awareness,
demand generation and qualified leads.
However, for retargeting campaigns, the
News Feed Desktop placement still gets the
highest conversion rates in terms of purchase
conversion. Additionally, the right column is
a great placement for reminding your basket
abandoners to come back and move forward
with their purchase.
Data confirms that every
industry is different and that
multiple parameters (purchase
values, the length of the
journey, client profile) influence
the customer behavior through
the marketing funnel, so you
don’t always seal the deal by
delivering a single ad.
10
CREATIVITY, PROMOTIONS
AND AD TYPES
mong the multiple ad types available
on the Facebook advertising
platform, there are 4 you should
be using when marketing an ecomm site
depending on your goal:
The Plays: Facebook Ad Funnel Components - Creativity, promotions and Ad types
Attention: ‘Are you cool enough?’
Carousel ads are perfect for attracting the at-
tention of your qualified leads. You can merge
images and videos into one ad so your users can
swipe to see them all. They can explore your
best-selling products or unlock a story while
they swipe. There are endless opportunities
for marketers to boost conversion rates in their
top-funnel campaigns using carousel ads. Think
of high-impact images, try multiple variations, or
display lifestyle images vs. products. Images are
the first touch-point qualified leads will notice
about your post. Canvas is another option for
awareness generation, as it creates an immer-
sive experience for the user.
In terms of promotions, consider including a
First Time Shopper Offer in your ad as it can
nudge those first-time visitors and convert
them into paying customers.
First Time Shopper Offer Examples:
Free shipping on your first purchase
Free shipping and returns on your first purchase
A dollar amount off on the first order
A
Interest: ‘You need shoes!’
Lead ads present a big opportunity for mar-
keters to push their prospect database to the
next level. You can create a custom form to be
completed by a user after they click the SIGN
UP call to action. Once you generate interest
from your audience, you can collect their
contact information and start retargeting them
not only through Facebook, but other channels
as well. You can now combine Facebook ads
with an email or call-center strategy. This is a
great strategy and every marketer should try it
sooner rather than later.
Don’t hesitate to include an Email/Newsletter
Subscription Offer in your creative. As you
probably already know, building an email list
is extremely important for online retailers.
By providing an offer in exchange for visitors
emails, not only do you increase the chance of
a conversion, but you also get their email for
re-marketing through Facebook and email at
the same time.
11
The Plays: Facebook Ad Funnel Components - Creativity, promotions and Ad types
Action: ‘Get our shoes now’
Link Post ads or Dynamic product ads with
a single product are the most effective Face-
book ad types for shopping cart abandoners.
At this stage it’s not a good idea to remarket
to your prospects with multiple offers if they
have already added a product to the basket
and abandoned it afterwards. We don’t want
them to start the purchase process from
scratch, but need them to move forward with
the current choice instead.
With close to 70% of all people abandoning
their carts, it’s critical to include the sexiest
Abandon Cart Offer possible to provide
visitors with a reminder and incentive to come
back and complete their purchase. Some ideas:
A dollar amount off an order
A dollar amount off each item
A percentage off each item
A dollar amount off shipping
Free shipping
X% off all items in a category
Buy 1 get 1 free
Loyalty: ‘Come back,you love ourshoes’
Dynamic Product Ads with multiple products
and a cross-selling/up-selling strategy is the
best choice at this stage. Ensure you set up
Product Sets in your product feed options and
you’ll be ready to raise the LTV of your clients
and also the AOV.
You can test multiple rules and see how the AOV
responds. For example, for up-selling purposes,
you can divide the product feed into 2 product
sets using the Average Price as the dividing line
and set the rule to deliver Expensive Product
Sets instead of the whole catalogue.
Desire: ‘Our shoes are better/cheaper’
Dynamic Product Ads are the elite ads for
e-retailers. This magic remarketing tool delivers
the best-performing offer from your product
feed to people most likely to purchase. You
can set up multiple rules to fulfill your business
needs such as not displaying out of stock
products. DPA combine targeting optimization
with offer optimization. At this stage, you
need to convince prospects that they want
and desire your product and that it will satisfy
their needs. If you are still not delivering DPA,
please start today, and your ROI will thank you!
Ensure you include some kind of Volume/Cart
Size Offer. An offer based on the total value
of a shopping cart is an effective up-selling
tactic to encourage prospects to spend more,
increasing your average order size. A strategic
way to incorporate this into your online store
is to calculate your average order value for
previous months and offer a discount or free
shipping on all orders 10-20% over your
average order value. Some other offer ideas:
Buy X items, get free shipping
Free shipping on orders over $X
$X discount on orders of $Y or more
$X or X% off for repeat customers
Dynamic Product Ads are the
elite ads for e-retailers.
This magic remarketing tool
delivers the best-performing
offer from your product
feed to people most
likely to purchase.
12
The Plays: Facebook Ad Funnel Components - Bidding
BIDDING
lthough bidding may sound like a
whole new world full of tricks, you
can maneuver through the process by
always bidding for actions when selecting the
‘Website Conversions’ objective in the cam-
paign creation process, especially for ecomm
marketers. Each level of the funnel should
be bidding for a different action while the
rest are kept constant. However, if you are an
intermediate/advanced advertiser, you can test
multiple optimization options and learn from
them. Let’s dive into the available objectives:
Actions
Facebook will deliver your ad to people who are
most likely to perform that action. This works
best when you’re targeting large audiences
(+100,000 people) as Facebook can pick out
the top percentage of people most likely to act
and discard the rest. The actions can be any
Facebook Standard Event (or customized event).
This option is great for top-funnel campaigns
A
with a wide lookalike audience and “visiting the
landing page” as the action pursued. However, If
you are targeting a small audience, as is usually
the case for retargeting campaigns, you need to
know that Facebook will pick just a percentage
of them to deliver to (usually 10%). Ensure you
keep your budget low, or the campaign will not
consume it all. For example, if your audience size
is 50,000, then you can expect delivery to only
5,000. With an average CPM of $8 in America,
the logical budget to set for this ad set would be
$40. The other thing you need to keep in mind
if you choose this action-based optimization is
that the Facebook algorithm needs at least 25
actions per day to adjust targeting. Therefore, if
you selected Purchase as the event that triggers
the action, you need to ensure you are getting
25 purchases per day to let Facebook calibrate
the delivery. If this is not the case, the suggested
move would be to select the Add to Cart event
or any other conversion event further up the
funnel (i.e. Product Page Visit).
Each level of the funnel should be
bidding for a different action while
the rest are kept constant.
However, if you are an
intermediate/advanced
advertiser, you can test
multiple optimization options
and learn from them.
13
The Plays: Facebook Ad Funnel Components - Bidding
Daily Unique Reach
Facebook will deliver your ad to as many people
within your target audience as possible, but
with a limit of no more than once per day.
Facebook is not optimizing delivery to people
most likely to perform the desired action. There-
fore, if you want Facebook to reach all the users
in your website customer audience, for example,
it will try to show your ad to as many of those
as they can with the available budget, regardless
of the likelihood of those users performing your
desired action. This is a great tool when retar-
geting extremely relevant audiences (Shopping
Cart abandoners for example) as you will be
serving ads to all of them but also avoiding high
levels of frequency since delivery is limited to
once per day. However, sometimes you will see
that your audience performs better with more
than one impression per day. If this is the case,
you should test if optimizing for impressions
works better for you.
Impressions
Facebook will deliver your ad to as many people
within your target audience and as many times
as possible, exactly like the Daily Unique Reach
option, but without the single daily impression
limitation. If your retargeting audience is smaller
than 100,000 and contains only lower-funnel
prospects that need a final push to convert into
clients or are already clients, this is your best
option. Facebook will roll out a feature allowing
the frequency cap to be set by the marketer.
This will be the perfect combination of reaching
the entire audience with a set amount of daily
impressions (not just one).
Clicks
Facebook will deliver the ad to people most
likely to click anywhere in your ad (link click,
comment, like, share) and you will be paying
for each click made to your ad. Currently you
can select to be charged only by link clicks.
This is usually discouraged for Direct response
goals, but best for campaigns that are pursuing
engagement from their audience.
Daily Unique Reach is a great
tool when retargeting extremely
relevant audiences as you will be
serving ads to all of them but
also avoiding high levels of
frequency since delivery is
limited to once per day.
14
The Plays: Facebook Ad Funnel Components - Bidding
QUALIFIED
LEADS
AWARNESS
OPTIMIZE FOR ACTION
OPTIMIZE FOR ACTION (IF AUDIENCE <100K = OPTIMIZE FOR IMPRESSIONS)
OPTIMIZE FOR ACTION (IF WCA < 100K = CPM)
OPTIMIZE FOR ACTION (IF WCA < 100K = CPM)
OPTIMIZE FOR ACTION
(IF WCA < 100K = CPM)
CONSIDERATION PREFERENCE PURCHASE LOYALTY
LANDING
VISITORS
PRODUCT
VISITORS
BASKET
VISITORS
CLIENTS
Objective:
Website Conversion
Conversion Event:
Landing Page Visiting
Objective:
Website conversion
Conversion Event:
Product Visiting
Objective:
Product Catalogue
(multi-product)
Conversion Event:
Add to Cart
Objective:
Product Catalogue
(single product))
Conversion Event:
Purchase
Objective:
Product Catalogue
(cross-selling)
Conversion Event:
Purchase
Bidding & Ad type
15
The Plays: Facebook Ad Funnel Components - Bidding
Automatic vs Manual bidding
Although it’s not your actual bid, Facebook
uses a max bidding amount to ensure you
will not pay more for your bid than it’s worth
to you. If you are selecting “Optimize for
Action,” by default, you are not asked to set
a bid and Facebook will get the most actions
at the best price. However, you can always
test the manual bidding option if you are an
experienced advertiser. Facebook shows a
suggested range to guide you in this process,
but we suggest you to do the math and set
what the action is worth to you. If the event is
Add to Cart for example, and your Shopping
Cart Abandonment Rate is 60%, your Average
Order Value is $150, and your Business Margin
is 80%, your maximum bid to turn a visitor
into the “shopping cart adder” would be $48.
However, if Facebook is delivering less than
expected, try to raise the bid (25% more than
the highest suggested by Facebook) and see if
the ROAS makes sense for your business.
While bidding CPC or CPM, ensure you
bid high enough (double than the amount
suggested, as there is no range in these cases).
Bidding too low is the primary reason for not
getting your ad delivered.
You can always test the manual
bidding option if you are an
experienced advertiser. Facebook
shows a suggested range to guide
you in this process, but we
suggest you to do the math and set
what the action is worth to you.
16
The Plays: Facebook Ad Funnel Components - Budget
BUDGET
eads, prospects, and clients we can also
call these components demand gener-
ation, demand capture and customer
retention. In Facebook Ad terms, these can be
translated to lookalike targeting, retargeting
website visitors, and retargeting website
clients. The best-performing allocation model
for your ecomm business will depend on
multiple parameters. Some of the metrics that
impact the three levels of the funnel include
CAC, organic monthly visitors, average order
value, repurchase rate, and LTV. For example,
if your company’s repurchase rate is very
low because of the essence of your product,
it does not make sense for you to invest ad
dollars in reaching out to clients as they are
not going to convert.
For the purpose of this analysis, let’s imagine
an ideal company as a study model and
focus on the 3 usual stages of an ecomm
company’s journey through Facebook ads.
The lower on the funnel a person is, the
lower the cost is to convert them on a
purchase. But, this is a process that needs a
high budget, time and patience.
L
Stage 1: All About Reach
The first stage is all about brand awareness
and driving highly-qualified leads to your site.
Most of your ad dollars (80% lead gen, 15%
retargeting visitors, and 5% retargeting clients)
should be invested in campaigns targeting large
lookalike audiences based on your clients/
prospects. Usually, this stage of the journey is
likely to be your biggest bet in terms of ROI. It’s
very expensive to convert a lead into a client with
one campaign, so you can’t expect a high return
on your advertising investment. Focus instead
on metrics such as cost per person reached
and their conversion rate from lead to visitor.
Try multiple lookalike audiences, placements,
creatives and copy to iterate and lower the cost
of acquiring a new prospect.
The best-performing allocation model for your ecomm business will depend
on multiple parameters. Some of the metrics that impact the three levels
of the funnel include CAC, organic monthly visitors, average order value,
repurchase rate, and LTV.
17
The Plays: Facebook Ad Funnel Components - Budget
Stage 3: All About LTV
This is now the perfect funnel! It’s a funnel that
allocates most of your ad dollars to retarget-
ing clients. Your cost per conversion will be
the lowest, and the return highest. Focusing
on generating up-selling and cross-selling
campaigns with DPA or discount codes is key in
this stage. You earned a big client audience and
retargeting them is the best option in terms of
the cost of conversion. It’s hard to get there,
but if you manage to do it, you will validate
that the perfect funnel you learned about at
your university has been flipped around!
Unfortunately, this is not the end of your
journey but just the end of one cycle. Once
Stage 2: All About ROI
The second stage is the perfect time to boost
your ROI metrics. You managed to lower your
cost per qualified lead, and now it’s time to
remarket to them! Remember that the cost of
converting a prospect is lower than converting
a lead, so your advertising spend will bring a
higher level of return. This it the perfect time
to re-allocate a large amount of your ad dollars
from lead-gen campaigns to retargeting solu-
tions like Dynamic Product Ads. The larger your
inventory is, the better they’ll perform. The
funnel composition model will be around 50%
lead-gen, 40% retargeting product visitors, and
10% retargeting clients.
you’ve reached the third stage of the funnel and
your customer retargeting campaigns have been
running for a while, their performance may start
to decrease. This could be a sign that it’s time
to feed your funnel with fresh leads, and you’ll
need to circle back to the first stage again.
The lower on the funnel a
person is, the lower the cost
is to convert them on a purchase.
But, this is a process that
needs a high budget,
time and patience.
18
The Plays: Facebook Ad Funnel Components - Budget
Advertising Spend Per Funnel Level
This is how advertising spend cycles would look:
ROI Evolution
The ROI evolution, with 3 stages included
in each cycle, would look like this:
This is of course a very sophisticated
approach and requires you to track many
variables daily before you decide how to
reallocate your ad dollars.
19
Review The Film: Measuring for Success
s an ecomm marketer, you must
monitor your ad KPIs on a daily/
weekly basis to learn from each
iteration and optimize accordingly. You prob-
ably already know that Ecomm KPIs are your
main marketing objective and they impact the
business in the long term.
The most important ad KPIs to monitor are:
CPM: The cost per thousand impressions is
definitely a useful KPI when measuring success
- especially in top-funnel campaigns where
wider audiences are required. The lower CPM
you get, the more people you’ll reach.
CTR: Although many people don’t click
on ads and go directly to your website from
another device afterwards, the click-through
rate does a good job of showing their engage-
ment level and how it changes over time.
CPA: The cost per action is the metric that
will reflect success or failure of each campaign
in the funnel more clearly. While the action will
change from one campaign to another, (visiting
the landing page, visiting the product page,
Add to Cart, Purchase) it’s very important to
keep a close eye on them.
A
CR: Conversion rates will reflect the health
of your funnel and will show you where the
drop-off is so you can optimize for conversion.
FREQUENCY: Frequency is the average
number of times your ad was shown to each
person. If your website’s custom audiences for
retargeting are not very large, you will notice
that this metric gets high quickly. Refreshing
your content every 15 days and varying your
product feeds for DPA will help combat this.
RELEVANCE SCORE: The relevance score
calculation is based entirely on the positive and
negative feedback Facebook receives from the
target audience. If this metric decreases, then
Ecomm KPIs are your main marketing objective and they impact the busi-
ness in the long term. You must monitor your ad KPIs to learn from each
iteration and optimize accordingly.
your ad is likely to be more expensive or shown
less frequently. It’s important to monitor in both
lead-gen and retargeting campaigns.
DELIVERY: If your campaign is under-de-
livering, try raising your bid, replacing the
conversion event with a higher-funnel one,
or changing your targeting. Sometimes
retargeting campaigns underdeliver because
of a small website custom audience, so ensure
you re-allocate this budget to your top-funnel
campaigns to feed the funnel.
Additionally, the long-term metrics that will
reflect the success of ad campaigns are ROAS,
CAC, LTV, AOV and Churn.
20
Review The Film: Measuring for Success
ATTRIBUTION MODEL
Establishing an attribution model is
imperative to better understand the lift
driven by advertising spend and the touch
points responsible for the conversion during
the customer journey. Facebook attributes
conversions to the day of the click and/or
impression. Specifically, Facebook offers con-
version tracking based on a 1 day, 7 day and
28 day post-click and/or post-impression
model (unfortunately the maximum window is
28 days, so you’re a bit limited if you have a
particularly long path to purchase).
By default, Facebook will attribute a purchase
(or any other action) to a campaign if it
happened 1 day after the ad impression or
28 days after the user clicked on the ad. You
can change the attribution model to better fit
your business, however, we encourage you to
consider both view and click events in it, as
most people don’t click on ads and then make
a purchase directly on another device.
Facebook can attribute this transaction to
a specific campaign as Facebook users are
logged in on all their devices. If you’re using
other analytics tools for your reporting, it
won’t consider this data, which is why most
cross-device attribution from Facebook is not
being included.
You can change the attribution model to better fit your business,
however, we encourage you to consider both view and click events
in it, as most people don’t click on ads and then make a purchase
directly on another device.
21
ADSET 1 Lookalike 2%
Lookalike 9%,
Exclude Lookalike 2%
Campaign 1: Website
Conversions.
Conversions:
Landing
View Content
Conversions:
Product
View Content
*Unique Daily
Reach or Impression
if audience is <100K
Conversions:
Add to Cart
*Unique Daily
Reach or Impression
if audience is <100K
Conversions:
Purchase
*Unique Daily
Reach or Impression
if audience is <100K
Conversions:
Purchase
*Unique Daily
Reach or Impression
if audience is <100K
2-3 creatives
per ad set.
Carousel
ads / Video
Carousel
ads / Canvas
2-3 creatives
per ad set.
Carousel
ads / Video
Carousel ads
30% of
overall ad
spend
Lookalike 10%,
Exclude lookalike 9% and 2%
FB + IG + Audience
Network
FB + IG + Audience
Network
FB + IG + Audience
Network
FB Newsfeed Desktop
FB Newsfeed Mobile
FB Right Column
FB Newsfeed Desktop
FB Newsfeed Mobile
FB Right Column
FB Newsfeed Desktop
FB Newsfeed Mobile
FB Right Column
ADSET 2
ADSET 3
ADSET 1
ADSET 2
ADSET 3
ADSET 1
ADSET 2
ADSET 3
ADSET 1
ADSET 2
ADSET 3
ADSET 1
Campaign 2: Website
Conversions.
15% of
overall ad
spend
ADSET 2
ADSET 3
Campaign 3: Product
Catalogue for FB.
Product Feed
(Multi Product
Layout)
Product Feed
(Single Product
Layout)
Product Feed
(Multi Product
Layout +
Cross-selling/
Up-selling Setup)
20% of
overall ad
spend
Campaign 4: Product
Catalogue for FB.
15% of
overall ad
spend
Campaign 5: Product
Catalogue for FB.
20% of
overall ad
spend
Landing Visitors WCA
(30-days duration)
Excluding product
visitors, basket visitors
and clients
*This is not a one-size fits all business.
This is an standard structure to guide you
through the funnel structuring process.
Product Visitors WCA
(30-days duration)
Exclude basket visitors
and clients
Add to Cart WCA
(duration 60 days)
Exclude basket visitors
and clients
Clients WCA
(15 days after
purchase, 90 days
duration)
* Instagram for levels 3, 4, 5 can be run with Website Conversion separate campaigns as DPA are not available for this placement yet, use Carousel Ads instead.
* If ads are underdelivering, Re-allocate ad-dollars to Level 1 to feed the funnel.
* Re-allocate ad-dollars to placement ad sets with higher ROI."
FB Newsfeed Desktop
FB Newsfeed Mobile
+ Audience Network
IG
CAMPAIGN
OBJECTIVE
AD SET TARGETING BUDGETCREATIVEPLACEMENTOPTIMIZATION
CONVERSION
FUNNEL
AWARENESS
CONSIDERATION
PREFERENCE
PURCHASE
LOYALTY
The Kick Off: Building the funnel
22
Resources
Funnely’s own data
Facebook for Business: https://www.facebook.com/business
Facebook Blue Print: https://facebook.exceedlms.com/student/home
Facebook for Developers: https://developers.facebook.com
Support: https://www.facebook.com/business/resources
Jonloomer: http://www.jonloomer.com/
Facebook DR Activation Guide
By Phone
(208) 505-8746
By Email
info@funne.ly
San Francisco
55 E 3Rd Ave, San Mateo
New York
33 Nassau Avenue, Brooklyn
Buenos Aires
Niceto Vega 4736
Contact Us...
May 2016

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PLAYBOOK FULL FUNNEL FACEBOOK ADS FOR ECOMMERCE MARKETERS

  • 1. By Susana Cipriota Co-Founder at Funnely CMO & VP Product
  • 2. 2 1 The Game: Full Funnel Strategy 2 Formation: Facebook Pixel Setup 3 The Team: Ecomm Variables Impacting Facebook Ad Performance 4 The Plays: Facebook Ad Funnel Components 4.1 Targeting 4.1.1 Demand Generation 4.1.2 Demand Capture 4.1.3 Placement 4.2 Creativity, Promotions and Ad types 4.2.1 Attention 4.2.2 Interest 4.2.3 Desire 4.2.4 Action 4.2.5 Loyalty 4.3 Bidding 4.3.1 Actions 4.3.2 Daily Unique Reach 4.3.3 Impressions 4.3.4 Clicks 4.4 Budget 4.4.1 All About Reach 4.4.2 All About ROI 4.4.3 All About LTV 5. Review The Film: Measuring for Success 6. The Kick Off: Building the Funnel p. 3 p. 4 p. 5 p. 7 p. 7 p. 8 p. 8 p. 9 p. 10 p. 10 p. 10 p. 11 p. 11 p. 11 p. 12 p. 12 p. 13 p. 13 p. 13 p. 16 p. 16 p. 17 p. 17 p. 19 p. 21 Glossary
  • 3. 3 ith 1.65 billion monthly active users, 1 billion stories posted every day, 100 million hours of video watched every day and 2 billion photos shared every day Facebook is the best channel for Ecommerce advertisers to reach new qualified leads, exist- ing prospects and clients. It’s advertising system has become very robust and full of new features every month. 2.5 million monthly active ad- vertisers utilize Facebook, so e-retailers need a deep understanding of all the best practices to optimize their budget more than ever. From Ecommerce components and KPIs to specif- ic targeting, budget, bidding, placements and creativity that covers every step of the sales funnel, you’ll need to use them all when forming your ad strategy on Facebook. Top performing Facebook ads for Ecommerce come from managing a group of campaigns covering every step of the funnel. The funnel allocation approach is a must for ecommerce advertisers as it’s granularity allows for better- performing ads by lowering the cost per purchase and boosting ROAS and sales. Once the custom audience events are placed in your ecomm site you can start feeding them right away. The magic will not happen if you avoid this step. The granular allocation lets you optimize your investment between lead gen and retargeting campaigns. And the Full Funnel Strategy W REMEMBER, THE AUDIENCES YOU WILL BE TARGETING IN EACH CAMPAIGN ARE JUST AS IMPORTANT AS THE ONES YOU ARE EXCLUDING SO YOU CAN AVOID OVERLAPPING MESSAGES. more granular you map all the steps of your sales funnel, the lower your average cost of purchase will be as you are able to offer better promotions to highly relevant prospects. This is how your group of audiences should look like: 5 1 1 -(2,3,4,5) 2 -(3,4,5) 3 -(4,5) 4 -(5) 5 Qualified Leads Homepage Visitors Product Visitors Add To Cart Clients 2 3 4
  • 4. 4 Formation: Facebook Pixel Setup ith the world of ecommerce always changing for marketers, using current, cutting-edge technology is a must if you want to take your online sales metrics to the next level. Facebook has upgraded its pixel technology by combining the power of its multiple old pixels, conversion and custom audiences all into one. As an e-retailer, a deeper under- standing of its scope and possibilities will help you plan and execute a rocking Facebook (and Instagram) ad strategy. Today there are already 2.5 million active advertisers on their platform, so a granular allocation of your ad dollars is more important than ever if you need to lower your cost per conversion. Implementation of the Facebook pixel is required to structure a sales funnel for your ecommerce site. With this structure, you will be generating leads to feed the funnel and then remarketing them depending on the actions they take on your site to finally convert them into clients or re-purchasers. The pixel consists of a base code and several events. You can use the 9 standard events Facebook has put together or customize your own. This is a funnel example with 6 of them: Some standard retargeting platforms haven’t been built with a performance focus, so they don’t have the ability to track events. However, this is a must if you plan to master the art of Facebook ads for Ecommerce. Facebook has put together a group of standard events that will help you attribute conversions in your reporting. These include AddToWishlist, AddToCart, InitiateCheckout, AddPaymentInfo, Purchase, and more (check the funnel below as an example). Although you’ll need a developer to insert a Facebook pixel and set up events on your site, the time investment is worth it. You need to be aware of these 3 powerful features available with the Facebook pixel: 1- BUILDING REMARKETING AUDIENCES: The pixel will be triggered by the standard events and Facebook will identify the user depending on their behavior on your ecom- merce site, generating audiences for your ads. 2- CONVERSION OPTIMIZATION: Optimiz- ing your ads for conversion will allow Face- book to deliver them to people most likely to visit, add to cart, or purchase your product. 3- CONVERSION TRACKING: You can learn how successful your ads are by reporting on events. Keep in mind that revenue is not always a great KPI for your ads. Depending on the level of the funnel you are targeting, the KPIs should change. W
  • 5. 5 The Team: Ecomm Variables Impacting Facebook Ad Performance Ad Variables Targeting Budget Bidding Placement Creative Ecomm Variables Market Pricing Business Margins Product Life Cycle Purchase Frequency Product Catalog Size Ecomm KPIS ROAS CAC LTV AOV Churn Delivery Ad KPIS CPM CTR CPA CR Frequency Relevance Score very online business has it’s own components which will more or less influence it’s Facebook advertising performance. Although all of them are variables on the business side, many of them must remain stagnant due to their importance in the business model. However, it is important to understand their relation to ad metrics. Let’s take a look at some of them in detail: E
  • 6. 6 The Team: Ecomm Variables Impacting Facebook Ad Performance MARKET: Each market (Country, Region, City) has it’s own online behavior and therefore, it’s own average CPM. While targeting developing markets yields a lower CPM, it will usually re- sult in lower CTRs or conversion rates. Tip: It’s always a good idea to test multiple markets in different ad sets and learn from their metrics. The 2015 Q4 average CPM for the Americas was $8.01, $4.61 in EMEA and $3.46 in APAC. PRICING: Affordable products usually produce a shorter path to purchase due to the emo- tional and impulsive process, while expensive products require multiple touch-points (ad impressions) between the lead and the brand before converting them into a client. However, a higher product price will typically result in a higher margin. Tip: Up-selling strategies with DPA (direct product ads) will help you raise the AOV (average order value) and leverage your biz margins. BUSINESS MARGINS: The higher your business margin, the more you can bid in the auctions to win ad delivery. If your margins are very constrained the space to test, learn and iterate is very limited. Always include margins in your ROI formula to see the big picture and the real ROI. Tip: Some adver- tisers assign the real valvue of the product (Price - Cost of product) instead of the price in the Product feed so they can get the actual ROI driven by DPA directly in Facebook’s ad reporting tool. PRODUCT LIFE CYCLE: The product life cycle is the progression of an item through the four stages of its time on the market. The four life cycle stages are: Introduction, Growth, Maturity and Decline. The acquisition cost level is directly correlated with this cycle. The earlier the business is in the cycle, the more expensive the price will be to get a new client due to the aggressive demand generation process you’ll need to pursue. Tip: Ensure your relevance score is as high as possible so you can lower your CPM. PURCHASE FREQUENCY: The number of times a customer makes a purchase in a given period of time will be directly correlated with the product category. If the purchase frequency for your brand is lower than category rates, your customer is likely spending their money on your competitors. Categories that have high levels of purchase frequency also lend themselves to high levels of attrition among customers. Tip: If your company is based on a subscription model (No purchase frequency), retargeting clients will help lower churn. PRODUCT CATALOG SIZE: We all agree that the best-performing Facebook ads are Dy- namic Products Ads. DPA are a cross-device retargeting solution that helps e-marketers promote their entire Product Catalog. It’s a robust ad type that combines dynamic offerings with optimized targeting. However, it requires a wider product catalog offering for better performance. If you are promoting a uni-product company, this tool is not for you. Although all of the online business components are variables on the business side, many of them must remain stagnant due to their importance in the business model. However, it is important to understand their relation to ad metrics.
  • 7. 7 The Plays: Facebook Ad Funnel Components TARGETING reating successful Facebook ad cam- paigns for ecommerce usually requires rigorous testing and constant optimiza- tion. Testing helps e-marketers like you identify small tweaks you can make to your campaign settings to drastically increase ROAS. While getting the best value from your ad spend by reaching relevant audiences for your business is challenging, there are many best practices and tips you can use to guide you in this art. The demand generation and demand capture stages should be approached sepa- rately in terms of your targeting strategy. C While getting the best value from your ad spend by reaching relevant audiences for your business is challenging, there are many best practices and tips you can use to guide you in this art.
  • 8. 8 The Plays: Facebook Ad Funnel Components - Targeting B. Demand Capture Once your qualified leads have visited your ecommerce site, it’s time to remarket to them based on their behavior on your site to ensure conversion and a higher return on investment. Custom audiences and website custom audiences are great technology tools for delivering retargeting campaigns. Ensure a Facebook Pixel and some standard events are in place, and you’re ready to go! A. Demand Generation Lookalike audiences and interest-based target- ing are two tools you can manage to generate qualified leads to your ecommerce site. Reach is crucial when generating demand so you can scale up your results. It’s important to test both targeting types (avoid using them in parallel to avoid overlapping) so you can learn from metrics and optimize. You can combine both of them to narrow big audiences and ensure you are target- ing only relevant leads. All Lookalike audiences are based on a custom audience (From a datafile or from your Website). The suggested size of the seed audience is at least 2,000 people and if possible, use a higher-valued-clients base to leverage the relevance of the lookalike audience. If not possible, you can use clients, basket abandoners, or product visitors as seed custom audience, as well. The best practice to test lookalike audiences is by implementing a process called: Nested Lookalikes. It means creating 2 o 3 different Lookalike audiences (Using the relevance vs wide percentages available, from 1% to 10% of the country) and testing each of them in different ad-sets. You need to ensure you are excluding the ones that are included in the other ad-sets so you avoid overlapping. You will learn which audience brings the lower cost per action and the highest ROI (Usually the one with the highest CPA, but is not always the case). VS.
  • 9. 9 The Plays: Facebook Ad Funnel Components - Targeting Placements Mapping and understanding the path to online purchase is critical for e-marketers as this exercise will reveal critical touch-points of their customer’s journey to a purchase. Data confirms that every industry is different and that multiple parameters (purchase values, the length of the journey, client profile) influence the customer behavior through the marketing funnel, so you don’t always seal the deal by delivering a single ad. While challenging, it’s crucial e-marketers design campaigns that deliver the right message at the right moment in a customer’s journey to purchase. Gener- ating demand with a lead gen campaign and capturing this intention with granular retar- geting afterwards is a good starting point. But the only way to optimize ROAS is by testing, measuring and learning from each iteration and adjusting your marketing budgets accordingly. To complicate matters, most customer journeys take place on different devices at home, on the go, and at work (9 in 10 consumers start an activity on one device and finish it on another). But don’t panic! You can measure all of these cross-device paths and attribute the right value to each of them in your Facebook advertising reports. In general, the smart- phone is considered the go-to device - 76% of adults who own one use it while they are out and about. It’s always with them and is most commonly used for communication and social activities. The tablet is viewed as the entertainment hub and is often used at home, where 43% of tablets are shared with others. The laptop or desktop is the workhorse — 80% of online adults that own one use it at home, and it tends to be dedicated to import- ant tasks like work or managing finances. The world is no longer transitioning to mobile, as they are already there. With 1.2 billion smart- phones in the world, people spend 3 hours of their day on their mobile phone. 20% of the monthly time spent on mobile is consumed by Instagram, Facebook and Messenger. As a result, these are the channels you should be utilizing to reach your audience. Mobile placements (Face- book News feed Mobile + Audience Network + Instagram) are best ones for creating awareness, demand generation and qualified leads. However, for retargeting campaigns, the News Feed Desktop placement still gets the highest conversion rates in terms of purchase conversion. Additionally, the right column is a great placement for reminding your basket abandoners to come back and move forward with their purchase. Data confirms that every industry is different and that multiple parameters (purchase values, the length of the journey, client profile) influence the customer behavior through the marketing funnel, so you don’t always seal the deal by delivering a single ad.
  • 10. 10 CREATIVITY, PROMOTIONS AND AD TYPES mong the multiple ad types available on the Facebook advertising platform, there are 4 you should be using when marketing an ecomm site depending on your goal: The Plays: Facebook Ad Funnel Components - Creativity, promotions and Ad types Attention: ‘Are you cool enough?’ Carousel ads are perfect for attracting the at- tention of your qualified leads. You can merge images and videos into one ad so your users can swipe to see them all. They can explore your best-selling products or unlock a story while they swipe. There are endless opportunities for marketers to boost conversion rates in their top-funnel campaigns using carousel ads. Think of high-impact images, try multiple variations, or display lifestyle images vs. products. Images are the first touch-point qualified leads will notice about your post. Canvas is another option for awareness generation, as it creates an immer- sive experience for the user. In terms of promotions, consider including a First Time Shopper Offer in your ad as it can nudge those first-time visitors and convert them into paying customers. First Time Shopper Offer Examples: Free shipping on your first purchase Free shipping and returns on your first purchase A dollar amount off on the first order A Interest: ‘You need shoes!’ Lead ads present a big opportunity for mar- keters to push their prospect database to the next level. You can create a custom form to be completed by a user after they click the SIGN UP call to action. Once you generate interest from your audience, you can collect their contact information and start retargeting them not only through Facebook, but other channels as well. You can now combine Facebook ads with an email or call-center strategy. This is a great strategy and every marketer should try it sooner rather than later. Don’t hesitate to include an Email/Newsletter Subscription Offer in your creative. As you probably already know, building an email list is extremely important for online retailers. By providing an offer in exchange for visitors emails, not only do you increase the chance of a conversion, but you also get their email for re-marketing through Facebook and email at the same time.
  • 11. 11 The Plays: Facebook Ad Funnel Components - Creativity, promotions and Ad types Action: ‘Get our shoes now’ Link Post ads or Dynamic product ads with a single product are the most effective Face- book ad types for shopping cart abandoners. At this stage it’s not a good idea to remarket to your prospects with multiple offers if they have already added a product to the basket and abandoned it afterwards. We don’t want them to start the purchase process from scratch, but need them to move forward with the current choice instead. With close to 70% of all people abandoning their carts, it’s critical to include the sexiest Abandon Cart Offer possible to provide visitors with a reminder and incentive to come back and complete their purchase. Some ideas: A dollar amount off an order A dollar amount off each item A percentage off each item A dollar amount off shipping Free shipping X% off all items in a category Buy 1 get 1 free Loyalty: ‘Come back,you love ourshoes’ Dynamic Product Ads with multiple products and a cross-selling/up-selling strategy is the best choice at this stage. Ensure you set up Product Sets in your product feed options and you’ll be ready to raise the LTV of your clients and also the AOV. You can test multiple rules and see how the AOV responds. For example, for up-selling purposes, you can divide the product feed into 2 product sets using the Average Price as the dividing line and set the rule to deliver Expensive Product Sets instead of the whole catalogue. Desire: ‘Our shoes are better/cheaper’ Dynamic Product Ads are the elite ads for e-retailers. This magic remarketing tool delivers the best-performing offer from your product feed to people most likely to purchase. You can set up multiple rules to fulfill your business needs such as not displaying out of stock products. DPA combine targeting optimization with offer optimization. At this stage, you need to convince prospects that they want and desire your product and that it will satisfy their needs. If you are still not delivering DPA, please start today, and your ROI will thank you! Ensure you include some kind of Volume/Cart Size Offer. An offer based on the total value of a shopping cart is an effective up-selling tactic to encourage prospects to spend more, increasing your average order size. A strategic way to incorporate this into your online store is to calculate your average order value for previous months and offer a discount or free shipping on all orders 10-20% over your average order value. Some other offer ideas: Buy X items, get free shipping Free shipping on orders over $X $X discount on orders of $Y or more $X or X% off for repeat customers Dynamic Product Ads are the elite ads for e-retailers. This magic remarketing tool delivers the best-performing offer from your product feed to people most likely to purchase.
  • 12. 12 The Plays: Facebook Ad Funnel Components - Bidding BIDDING lthough bidding may sound like a whole new world full of tricks, you can maneuver through the process by always bidding for actions when selecting the ‘Website Conversions’ objective in the cam- paign creation process, especially for ecomm marketers. Each level of the funnel should be bidding for a different action while the rest are kept constant. However, if you are an intermediate/advanced advertiser, you can test multiple optimization options and learn from them. Let’s dive into the available objectives: Actions Facebook will deliver your ad to people who are most likely to perform that action. This works best when you’re targeting large audiences (+100,000 people) as Facebook can pick out the top percentage of people most likely to act and discard the rest. The actions can be any Facebook Standard Event (or customized event). This option is great for top-funnel campaigns A with a wide lookalike audience and “visiting the landing page” as the action pursued. However, If you are targeting a small audience, as is usually the case for retargeting campaigns, you need to know that Facebook will pick just a percentage of them to deliver to (usually 10%). Ensure you keep your budget low, or the campaign will not consume it all. For example, if your audience size is 50,000, then you can expect delivery to only 5,000. With an average CPM of $8 in America, the logical budget to set for this ad set would be $40. The other thing you need to keep in mind if you choose this action-based optimization is that the Facebook algorithm needs at least 25 actions per day to adjust targeting. Therefore, if you selected Purchase as the event that triggers the action, you need to ensure you are getting 25 purchases per day to let Facebook calibrate the delivery. If this is not the case, the suggested move would be to select the Add to Cart event or any other conversion event further up the funnel (i.e. Product Page Visit). Each level of the funnel should be bidding for a different action while the rest are kept constant. However, if you are an intermediate/advanced advertiser, you can test multiple optimization options and learn from them.
  • 13. 13 The Plays: Facebook Ad Funnel Components - Bidding Daily Unique Reach Facebook will deliver your ad to as many people within your target audience as possible, but with a limit of no more than once per day. Facebook is not optimizing delivery to people most likely to perform the desired action. There- fore, if you want Facebook to reach all the users in your website customer audience, for example, it will try to show your ad to as many of those as they can with the available budget, regardless of the likelihood of those users performing your desired action. This is a great tool when retar- geting extremely relevant audiences (Shopping Cart abandoners for example) as you will be serving ads to all of them but also avoiding high levels of frequency since delivery is limited to once per day. However, sometimes you will see that your audience performs better with more than one impression per day. If this is the case, you should test if optimizing for impressions works better for you. Impressions Facebook will deliver your ad to as many people within your target audience and as many times as possible, exactly like the Daily Unique Reach option, but without the single daily impression limitation. If your retargeting audience is smaller than 100,000 and contains only lower-funnel prospects that need a final push to convert into clients or are already clients, this is your best option. Facebook will roll out a feature allowing the frequency cap to be set by the marketer. This will be the perfect combination of reaching the entire audience with a set amount of daily impressions (not just one). Clicks Facebook will deliver the ad to people most likely to click anywhere in your ad (link click, comment, like, share) and you will be paying for each click made to your ad. Currently you can select to be charged only by link clicks. This is usually discouraged for Direct response goals, but best for campaigns that are pursuing engagement from their audience. Daily Unique Reach is a great tool when retargeting extremely relevant audiences as you will be serving ads to all of them but also avoiding high levels of frequency since delivery is limited to once per day.
  • 14. 14 The Plays: Facebook Ad Funnel Components - Bidding QUALIFIED LEADS AWARNESS OPTIMIZE FOR ACTION OPTIMIZE FOR ACTION (IF AUDIENCE <100K = OPTIMIZE FOR IMPRESSIONS) OPTIMIZE FOR ACTION (IF WCA < 100K = CPM) OPTIMIZE FOR ACTION (IF WCA < 100K = CPM) OPTIMIZE FOR ACTION (IF WCA < 100K = CPM) CONSIDERATION PREFERENCE PURCHASE LOYALTY LANDING VISITORS PRODUCT VISITORS BASKET VISITORS CLIENTS Objective: Website Conversion Conversion Event: Landing Page Visiting Objective: Website conversion Conversion Event: Product Visiting Objective: Product Catalogue (multi-product) Conversion Event: Add to Cart Objective: Product Catalogue (single product)) Conversion Event: Purchase Objective: Product Catalogue (cross-selling) Conversion Event: Purchase Bidding & Ad type
  • 15. 15 The Plays: Facebook Ad Funnel Components - Bidding Automatic vs Manual bidding Although it’s not your actual bid, Facebook uses a max bidding amount to ensure you will not pay more for your bid than it’s worth to you. If you are selecting “Optimize for Action,” by default, you are not asked to set a bid and Facebook will get the most actions at the best price. However, you can always test the manual bidding option if you are an experienced advertiser. Facebook shows a suggested range to guide you in this process, but we suggest you to do the math and set what the action is worth to you. If the event is Add to Cart for example, and your Shopping Cart Abandonment Rate is 60%, your Average Order Value is $150, and your Business Margin is 80%, your maximum bid to turn a visitor into the “shopping cart adder” would be $48. However, if Facebook is delivering less than expected, try to raise the bid (25% more than the highest suggested by Facebook) and see if the ROAS makes sense for your business. While bidding CPC or CPM, ensure you bid high enough (double than the amount suggested, as there is no range in these cases). Bidding too low is the primary reason for not getting your ad delivered. You can always test the manual bidding option if you are an experienced advertiser. Facebook shows a suggested range to guide you in this process, but we suggest you to do the math and set what the action is worth to you.
  • 16. 16 The Plays: Facebook Ad Funnel Components - Budget BUDGET eads, prospects, and clients we can also call these components demand gener- ation, demand capture and customer retention. In Facebook Ad terms, these can be translated to lookalike targeting, retargeting website visitors, and retargeting website clients. The best-performing allocation model for your ecomm business will depend on multiple parameters. Some of the metrics that impact the three levels of the funnel include CAC, organic monthly visitors, average order value, repurchase rate, and LTV. For example, if your company’s repurchase rate is very low because of the essence of your product, it does not make sense for you to invest ad dollars in reaching out to clients as they are not going to convert. For the purpose of this analysis, let’s imagine an ideal company as a study model and focus on the 3 usual stages of an ecomm company’s journey through Facebook ads. The lower on the funnel a person is, the lower the cost is to convert them on a purchase. But, this is a process that needs a high budget, time and patience. L Stage 1: All About Reach The first stage is all about brand awareness and driving highly-qualified leads to your site. Most of your ad dollars (80% lead gen, 15% retargeting visitors, and 5% retargeting clients) should be invested in campaigns targeting large lookalike audiences based on your clients/ prospects. Usually, this stage of the journey is likely to be your biggest bet in terms of ROI. It’s very expensive to convert a lead into a client with one campaign, so you can’t expect a high return on your advertising investment. Focus instead on metrics such as cost per person reached and their conversion rate from lead to visitor. Try multiple lookalike audiences, placements, creatives and copy to iterate and lower the cost of acquiring a new prospect. The best-performing allocation model for your ecomm business will depend on multiple parameters. Some of the metrics that impact the three levels of the funnel include CAC, organic monthly visitors, average order value, repurchase rate, and LTV.
  • 17. 17 The Plays: Facebook Ad Funnel Components - Budget Stage 3: All About LTV This is now the perfect funnel! It’s a funnel that allocates most of your ad dollars to retarget- ing clients. Your cost per conversion will be the lowest, and the return highest. Focusing on generating up-selling and cross-selling campaigns with DPA or discount codes is key in this stage. You earned a big client audience and retargeting them is the best option in terms of the cost of conversion. It’s hard to get there, but if you manage to do it, you will validate that the perfect funnel you learned about at your university has been flipped around! Unfortunately, this is not the end of your journey but just the end of one cycle. Once Stage 2: All About ROI The second stage is the perfect time to boost your ROI metrics. You managed to lower your cost per qualified lead, and now it’s time to remarket to them! Remember that the cost of converting a prospect is lower than converting a lead, so your advertising spend will bring a higher level of return. This it the perfect time to re-allocate a large amount of your ad dollars from lead-gen campaigns to retargeting solu- tions like Dynamic Product Ads. The larger your inventory is, the better they’ll perform. The funnel composition model will be around 50% lead-gen, 40% retargeting product visitors, and 10% retargeting clients. you’ve reached the third stage of the funnel and your customer retargeting campaigns have been running for a while, their performance may start to decrease. This could be a sign that it’s time to feed your funnel with fresh leads, and you’ll need to circle back to the first stage again. The lower on the funnel a person is, the lower the cost is to convert them on a purchase. But, this is a process that needs a high budget, time and patience.
  • 18. 18 The Plays: Facebook Ad Funnel Components - Budget Advertising Spend Per Funnel Level This is how advertising spend cycles would look: ROI Evolution The ROI evolution, with 3 stages included in each cycle, would look like this: This is of course a very sophisticated approach and requires you to track many variables daily before you decide how to reallocate your ad dollars.
  • 19. 19 Review The Film: Measuring for Success s an ecomm marketer, you must monitor your ad KPIs on a daily/ weekly basis to learn from each iteration and optimize accordingly. You prob- ably already know that Ecomm KPIs are your main marketing objective and they impact the business in the long term. The most important ad KPIs to monitor are: CPM: The cost per thousand impressions is definitely a useful KPI when measuring success - especially in top-funnel campaigns where wider audiences are required. The lower CPM you get, the more people you’ll reach. CTR: Although many people don’t click on ads and go directly to your website from another device afterwards, the click-through rate does a good job of showing their engage- ment level and how it changes over time. CPA: The cost per action is the metric that will reflect success or failure of each campaign in the funnel more clearly. While the action will change from one campaign to another, (visiting the landing page, visiting the product page, Add to Cart, Purchase) it’s very important to keep a close eye on them. A CR: Conversion rates will reflect the health of your funnel and will show you where the drop-off is so you can optimize for conversion. FREQUENCY: Frequency is the average number of times your ad was shown to each person. If your website’s custom audiences for retargeting are not very large, you will notice that this metric gets high quickly. Refreshing your content every 15 days and varying your product feeds for DPA will help combat this. RELEVANCE SCORE: The relevance score calculation is based entirely on the positive and negative feedback Facebook receives from the target audience. If this metric decreases, then Ecomm KPIs are your main marketing objective and they impact the busi- ness in the long term. You must monitor your ad KPIs to learn from each iteration and optimize accordingly. your ad is likely to be more expensive or shown less frequently. It’s important to monitor in both lead-gen and retargeting campaigns. DELIVERY: If your campaign is under-de- livering, try raising your bid, replacing the conversion event with a higher-funnel one, or changing your targeting. Sometimes retargeting campaigns underdeliver because of a small website custom audience, so ensure you re-allocate this budget to your top-funnel campaigns to feed the funnel. Additionally, the long-term metrics that will reflect the success of ad campaigns are ROAS, CAC, LTV, AOV and Churn.
  • 20. 20 Review The Film: Measuring for Success ATTRIBUTION MODEL Establishing an attribution model is imperative to better understand the lift driven by advertising spend and the touch points responsible for the conversion during the customer journey. Facebook attributes conversions to the day of the click and/or impression. Specifically, Facebook offers con- version tracking based on a 1 day, 7 day and 28 day post-click and/or post-impression model (unfortunately the maximum window is 28 days, so you’re a bit limited if you have a particularly long path to purchase). By default, Facebook will attribute a purchase (or any other action) to a campaign if it happened 1 day after the ad impression or 28 days after the user clicked on the ad. You can change the attribution model to better fit your business, however, we encourage you to consider both view and click events in it, as most people don’t click on ads and then make a purchase directly on another device. Facebook can attribute this transaction to a specific campaign as Facebook users are logged in on all their devices. If you’re using other analytics tools for your reporting, it won’t consider this data, which is why most cross-device attribution from Facebook is not being included. You can change the attribution model to better fit your business, however, we encourage you to consider both view and click events in it, as most people don’t click on ads and then make a purchase directly on another device.
  • 21. 21 ADSET 1 Lookalike 2% Lookalike 9%, Exclude Lookalike 2% Campaign 1: Website Conversions. Conversions: Landing View Content Conversions: Product View Content *Unique Daily Reach or Impression if audience is <100K Conversions: Add to Cart *Unique Daily Reach or Impression if audience is <100K Conversions: Purchase *Unique Daily Reach or Impression if audience is <100K Conversions: Purchase *Unique Daily Reach or Impression if audience is <100K 2-3 creatives per ad set. Carousel ads / Video Carousel ads / Canvas 2-3 creatives per ad set. Carousel ads / Video Carousel ads 30% of overall ad spend Lookalike 10%, Exclude lookalike 9% and 2% FB + IG + Audience Network FB + IG + Audience Network FB + IG + Audience Network FB Newsfeed Desktop FB Newsfeed Mobile FB Right Column FB Newsfeed Desktop FB Newsfeed Mobile FB Right Column FB Newsfeed Desktop FB Newsfeed Mobile FB Right Column ADSET 2 ADSET 3 ADSET 1 ADSET 2 ADSET 3 ADSET 1 ADSET 2 ADSET 3 ADSET 1 ADSET 2 ADSET 3 ADSET 1 Campaign 2: Website Conversions. 15% of overall ad spend ADSET 2 ADSET 3 Campaign 3: Product Catalogue for FB. Product Feed (Multi Product Layout) Product Feed (Single Product Layout) Product Feed (Multi Product Layout + Cross-selling/ Up-selling Setup) 20% of overall ad spend Campaign 4: Product Catalogue for FB. 15% of overall ad spend Campaign 5: Product Catalogue for FB. 20% of overall ad spend Landing Visitors WCA (30-days duration) Excluding product visitors, basket visitors and clients *This is not a one-size fits all business. This is an standard structure to guide you through the funnel structuring process. Product Visitors WCA (30-days duration) Exclude basket visitors and clients Add to Cart WCA (duration 60 days) Exclude basket visitors and clients Clients WCA (15 days after purchase, 90 days duration) * Instagram for levels 3, 4, 5 can be run with Website Conversion separate campaigns as DPA are not available for this placement yet, use Carousel Ads instead. * If ads are underdelivering, Re-allocate ad-dollars to Level 1 to feed the funnel. * Re-allocate ad-dollars to placement ad sets with higher ROI." FB Newsfeed Desktop FB Newsfeed Mobile + Audience Network IG CAMPAIGN OBJECTIVE AD SET TARGETING BUDGETCREATIVEPLACEMENTOPTIMIZATION CONVERSION FUNNEL AWARENESS CONSIDERATION PREFERENCE PURCHASE LOYALTY The Kick Off: Building the funnel
  • 22. 22 Resources Funnely’s own data Facebook for Business: https://www.facebook.com/business Facebook Blue Print: https://facebook.exceedlms.com/student/home Facebook for Developers: https://developers.facebook.com Support: https://www.facebook.com/business/resources Jonloomer: http://www.jonloomer.com/ Facebook DR Activation Guide
  • 23. By Phone (208) 505-8746 By Email info@funne.ly San Francisco 55 E 3Rd Ave, San Mateo New York 33 Nassau Avenue, Brooklyn Buenos Aires Niceto Vega 4736 Contact Us... May 2016