Facebook Ads Guide
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This is page seven of a handbook on Growth Hacking. Begin here.

Topics

Running Facebook ads

This page teaches you the strategy behind running top-performing Facebook Ads campaigns. It is a complete guide that covers everything you need to know.

And it includes plenty of examples.

You're actually about to learn every principle for running ads on any channel: from budgeting, to audience selection, to retargeting, and more.

I'll be using Facebook as our example channel, but this advice applies to all channels.

Oh, and guess what? Instagram Ads are published through the Facebook Ads dashboard. Meaning, nearly 100% of the advice on this page applies to Instagram.

Why Facebook ads?

Facebook ads perform remarkably well because:

The reality of running ads

Expectation: Fatigue

Fatigue is a real problem with Facebook and Instagram ads: Fatigue means audiences are tiring of seeing your ads on repeat. As a result, CTR's drop, CPA's increase, and your campaign's total lifetime shortens. Possibly to no longer than a few weeks.

These types of businesses have especially small audiences and will therefore fatigue quicker: Niche products, enterprise B2B products, and geography-restricted services.

Here's why fatigue happens: Facebook is already nearing total adoption in developed countries; hordes of new people aren't signing up for Facebook every week. So, unless you're targeting developing countries that are only now joining Facebook en masse, your audience isn't necessarily going to expand month over month. It's fixed.

Eventually everyone in your audience sees your ad. Then they see it on repeat. 

This happens sooner than you think. Because, as we'll learn, Facebook may limit your ad to just a subset of your target audience. (A subset that its algorithms know is most likely to click your ad.) So while they kindly save you costs, they expedite fatigue.

If you're willing to prioritize volume over speed of user acquisition, you can delay ad fatigue by lowering your daily budget to the degree that not everyone in your audience sees your ad once daily. We'll cover this later.

Expectation: Audience size

If you're targeting audiences based on demographic or profile criteria that people don't regularly shift in and out of (e.g. gender, age), your fixed audience size may only ever expand once consumer trends increase the total interest in your product. 

For example, say a new fashion comes into style and you're an apparel company well-suited to take advantage of it. Congrats, your potential audience just got bigger!

Or, say your largest competitor spends big on national advertising to move millions of people higher up your mutual LPA. Congrats, your audience just got bigger.

But, in contrast, if you're targeting all people who work in sales jobs in the U.S., how many people do you think are newly falling into that demographic each week? Not enough to keep your audience growing at a rate that outpaces fatigue.

Expectation: Revenue per user

The best approach in defending against ad fatigue actually has nothing to do with Facebook or even your market. It has to do with your business: Have a high LTV. 

LTV stands for lifetime user value. It's the sum of how much you earn per average user throughout the duration of their engagement with your business. 

Say, for example, you're a SaaS product that's used by customers for an average of 6 months before people leave. And, say, you charge $10 per month. Your LTV is $60.

Or, if you're an ecommerce business, say the average customer purchase up to 3 times throughout the lifetime of your company so far. And let's say the average order price is $100. Then your LTV is $300.

Simple, right?

So here's the cool thing: You know how much you can pay to acquire a new user through ads based on your LTV. The rule of thumb is that you should pay no more than 1/3rd of your LTV to account for expenses and overall variability.

So now you have some idea of whether you're running ads profitably.

But even cooler is that if your LTV is much higher than just a 3x multiple of your current cost per customer acquisition (CPA) from ads, then fatigue isn't currently a roadblock for you. Because fatigue simply means that people are tiring of your ads to the extent that they click less often — not that they don't click at all.

They will still click, but it'll just cost you more. But if you have a lot of legroom for that cost to go up, then you're still in the green.

If you have enough LTV legroom and if your audience is nearing 10 million or higher, you can likely run for Facebook ads for many months.

Expectation: Facebook ads versus Instagram ads

Instagram has a large young audience that's not as engaged on Facebook. On average, the audience is both more technical and more willing to engage in an ecommerce transaction.

These two plusses combined with Instagram's highly visual feed make it perform better than Facebook (lower cost per acquisition) for most ecommerce goods. Just make sure your site is mobile optimized — because Instagram traffic is all from mobile.

Takeaway

So now you understand what I meant by the opening sentence of this section: The best approach in defending against ad fatigue is having a high LTV. 

Increase your LTV by increasing your revenue per user. Do this by charging more, improving on-site conversion rates, adding more products for customers to purchase, and improving your customer referral rate.

In summary, this goes back to what I said in this handbook's intro: the more optimized the end of your growth funnel is, the more efficiently you can spend on acquisition.

Before we start

There are three pieces of housekeeping before I start this Facebook ads guide:

And here's an acronym cheat sheet:

This page provides a tremendous amount of knowledge, but you should implement knowledge for it to stick. So if you're not ready to start a Facebook or Instagram campaign, I suggest you skim the remainder of this page for now ✌

Ad campaign structure

As discussed on the Channels page, here's the structure of an ad campaign:

Campaign  Ad set  Ad

Keep this hierarchy in mind as we go through the coming sections.

Ad campaign lifecycle

First, I want you to have a high-level view of how campaigns are executed. 

Here are the steps to setting up a campaign:

1. Setup conversion pixel

Working with an ad channel always begins by setting up the channel’s conversion pixel (linked is Facebook’s). This is the JavaScript code snippet that reports conversions occurring on your site back to the channel. 

This is how the channel knows which ads are ultimately performing best — since cost-per-click is just an intermediary metric that isn't necessarily correlated with conversion.

2. Determine budget

Set your budgets for each set high enough for your ads to individually reach 3,000-5,000 impressions. You need a significant sample size like this for your cost-per-click (CPC) to stabilize. CPC is how you determine in the short term which ads perform best.

Unless you've used a channel before and you know how much your audience costs to target, you can't predict this budget upfront. So start with a few hundred dollars per campaign, watch your metrics daily, and scale the budget as needed to reach 3,000-5,000 impressions for ads showing high clickthrough rates relative to your others.

As you see consistent CPC or CPA numbers that are financially viable (we'll talk more about this), incrementally increase your budget as high as you're comfortable with.

3. Create initial ad sets and their ads

For each audience segment (e.g. mothers, software engineers, men under 40 with any job title), create an ad set for every value prop you want to individually pitch them. 

For each ad set, create ads presenting the same value prop in distinct ways — through differing copy and imagery. 

The more distinct ads you have, the less frequently users on profile-targeted channels see the same ads on repeat, so the longer it takes for them to tire of your product!

4. Monitor

Check the ad channel's dashboard once daily to see which ad set audiences, ad set value props, and ad copy/imagery combinations perform best. 

If you've reached a significant sample size of 3,000-5,000 impressions, turn off the ads with much lower click-through-rates (CTR’s) and/or cost-per-customer-acquisitions (CPA’s) relative to the others in its ad set.

If some ads perform much worse than their siblings and they've only reached, say, 1,500 impressions, you can turn those off too instead of wasting money on them.

5. Optimize

Begin tweaking your highest-performing ads with changes to their copy and creative. Similarly, tweak your ad sets' targeting settings.

Duplicate your ad sets and ads (keep the old ones running) when you do this. You want to see how your tweaks simultaneously compare to their originals. 

Build the habit of archiving all your work so you can look back at your costly-to-acquire advertising data when setting up new channels in the future!

When tweaking, you're ultimately looking to lower your CPA numbers and to increase total conversion volume.

Depending on your total audience size, as your ads continue running for weeks and beyond, audiences will tire of seeing your ads and will increasingly turn a blind eye to them. Your CTR’s will steadily drop. 

At this point, your realistic goal may not be to drastically improve CPA's through minor tweaks, but to prolong your current CPA: keep your ads fresh by switching them up and running at least 4 or 5 per ad set. 

If your ongoing optimizations cannot prolong your CPA’s at financially acceptable levels (they should be below one third the average amount you earn from a customer's lifetime engagement with you), it’s time to pause your campaign. 

In a few weeks' time, you can resume the campaign (as-is). Audiences will be less tired of you. Like unplugging a router and plugging it back in, this often actually works.

6. Run ongoing experiments

As you're optimizing the campaigns that already work, you should also test brand new targeting, value prop, copy, and imagery combinations. 

Your work never ends.

If you don't continually experiment, I guarantee you're leaving better CPA's and conversion volume on the table. And your audiences will sooner fatigue of your ads.

I recommend setting aside 10% of your budget for weekly or bi-weekly experiments.

7. Retarget

Segment people who visited your site but didn’t convert into a separate audience. (Using conversion pixels, every major channel allows you to easily do this. These are called "custom audiences.") When retargeting your custom audience, you can hit them with a unique set of ads that appeal to their newfound awareness of your product and its benefits. 

Consider, which new angles can you pitch them to tip them over the edge?

I talk a lot more about retargeting on the upcoming Facebook Ads page. Hold tight!

Ad sets: Segmentation

Here's when to create an ad set.

Ad sets are the level at which you group ads by the value prop they pitch plus choose a unique audience for that value prop.

On Facebook, it's critical you don't group multiple value props into a single ad set

Because, when you launch your ads, Facebook begins assessing the CTR for all ads in a set then stops serving the worst-performing ones. 

So, if you have ads pitching multiple value props in the same ad set, even the slightly lesser-performing value props may never be seen by your audience. 

This isn't acceptable: Audiences need to be pitched a product from multiple angles so that your messaging stays fresh. Even if some value props perform worse, it'll boost performance in the long run to not have audiences see the same value prop on repeat.

Ad sets: Targeting

Beyond housing a value prop, an ad set also targets an audience.

Let's run through the criteria by which Facebook allows you to target audiences.

Targeting's effect on ad costs

A quick note on the cost impact of the audiences you target.

Although the key ad metrics you're tracking are cost-per-click (CPC) and cost-per-acquisition (CPA), this is not actually how Facebook bills you under the hood. 

Facebook calculates its CPC pricing based on the number of impressions it took to lead to the click. And the cost of each impression varies significantly based on the total advertiser demand for that audience member.

This is based on their demographics and interests. 

Some audiences are more expensive due to key demographics (e.g. education, age, geography) that advertises broadly prefer.

Businesses targeting, say, lower-to-middle income 40 to 60-year-old women in rural American states, will be paying much less per impression than businesses targeting mid-twenties software engineers in major municipalities.

In short, for some businesses, cost-per-impression will be disproportionately expensive.

Targeting: Geography

Geography is the biggest demographic determinant of cost-per-impression. It's also the criterion that most limits your total audience volume.

So let's begin our ad set targeting with a discussion on geography! It's like you're back in high school! Only this time you're makin' cash money, baby.

First, note you'll probably want to select the "People who live in this location" dropdown option. This is in contrast to people who "are in" or "were recently in" your list of locations. Usually, the purpose of targeting by geography is to show your ad to people who have homes in that location and live there most of the year.

Second, know that countries split into three unofficial advertising "tiers:"

Tier 1

Australia
Canada
Denmark
France
Germany
Netherlands
Norway
Sweden
United Kingdom
United States

Tier 2

Austria
Belgium
Czech Republic
Estonia
Finland
Hong Kong
Ireland
Israel
Italy
New Zealand
Poland
Singapore
South Africa
Spain
Switzerland

Tier 3

Brazil
South Korea
India

Always begin by targeting countries you believe are most likely to convert. This keeps your spending efficient while you test your initial set of ads. Over time, you'll add or remove countries based on the performance you see. (I'll cover this soon.)

Targeting: Language

Explicitly target English speakers if you're targeting countries where the majority doesn't speak English. (Or target English anyway just to be safe at the expense of slightly narrowing your audience volume.)

If you are targeting an English-speaking country such as the US or the UK, leave this field blank. The odds are nearly everyone seeing your ad can understand English well enough to get the gist and consider whether they want to convert.

If you do explicitly target "English," you're missing out on Facebook users who have their UI language set to something other than English but do in fact speak English.

Targeting: Gender and age

As you can see in the screenshot above, Facebook (and most ad channels) allow you to restrict targeting by gender and age as well.

Unless you have a specific reason, avoid restricting by these criteria for your initial ad set tests. Instead, keep your targeting broad then parse your ads' performance by the gender and age groups of the people who converted. 

Because you always want to let the data tell you who to target. Don't go on gut feel. See which demographics had the lowest CPA then refine your targeting from there. 

That said, there is a rule of thumb: For most products that aren't explicitly targeting a younger demographic, targeting ages 22 to 50 keeps you within the bounds of those who are most likely to make Internet purchases.

Targeting: Devices

Country, gender, and age are first major targeting decisions. Usually they're self-evident decisions — you should have some idea of who's eligible to buy your product.

The next broad and rather self-evident targeting decision to make is device types: desktops (and laptops), smartphones, and tablets.

Here's what this restriction looks like in the Facebook Ads Manager:

If you're advertising a mobile app, obviously advertise to mobile devices. 

Facebook allows you to target just Android or iPhone devices, which is critical to spending efficiently if your app is in only one of those app stores.

For web-based products and services that are also accessible via mobile, it's worth testing mobile targeting too because, if the CPA's are acceptable, it'll expand your audience volume. Many people only use Facebook on their phone.

Mobile targeting for non-mobile apps

When you target mobile devices for non-mobile apps, be cognizant of three things:

Even if you can't check off all three considerations, it may still be worth targeting mobile as a means of extending your total audience volume. (If your audience is small to begin with). In this case, try to do whatever you can to at least get an email (or lead submission) from the mobile visitor so that your ensuing email marketing campaign can try to convince them to fully sign up and pay.

If you discover mobile devices are profitable for you, but you'd like to better optimize their targeting and creative for the mobile experience (good idea!), duplicate your ad sets so you can target desktop and mobile independently.

Targeting breakdowns

The targeting criteria we've covered so far can all be assessed within the Facebook Ads Manager dashboard.

Meaning, if you target multiple genders, ages, and countries in a single ad set, Facebook will let you "breakdown" your CPC and CPA metrics by each of these criteria so you can compare how they individually perform.

But, for the remainder of the targeting criteria I'm covering, Facebook will not allow you to perform breakdowns. This means each of the upcoming decisions you're going to make must result in a new ad set so you can track that decision's performance across its alternative values.

Kapeesh? Sorta? Don't worry, you'll see what I mean as you run your own campaigns.

Targeting: Profiles

With your demographic and device targeting in place, your next step is determining your primary means of profile targeting:

As mentioned, because the Facebook Ads dashboard doesn't let you filter by interest and lookalike targeting, you should create separate ad sets for each group of interests, behaviors, job titles, and lookalikes

Let's begin with profile data targeting then we'll move onto lookalikes.

Targeting: Profile data

Here's an incomplete preview of the profile data Facebook allows you to target:

1. Profile data: Interests

Facebook determines user interests based on Pages Liked and links shared.

Examples of interests include:

Capitalism reality check: Most features Facebook releases are designed to learn more about you. Did you think Facebook's introduction of News Stories was purely about getting you to spend more time on Facebook? Nope. It was also about tracking which stories you click on so they can tailor your ad targeting.

My motto for interest targeting is keep it niche.

Because a common mistake novice Facebook advertisers make is targeting high-level interest categories, such as Food, Web Design, or Marketing — instead of their niches such as BBQ, Responsive Web Design, and Digital Marketing, respectively.

Consider this: If someone once Liked "Food" on Facebook, or some other broad topic, that's a very weak indicator that they're food fanatics. Which is probably what you actually want to target to increase conversions for your cooking appliance ads.

The other problem with broad targeting is that it makes it hard to know which niches are performing best. As I mentioned, Facebook won't breakdown interests for you. So unless you explicitly targeting Indian food and Japanese food in separate ad sets, you won't know which cuisine-based interest is converting best.

As another example, if I were advertising a web design tool, I could target people who like related niche products like Sketch and Invision. These people will probably convert better than those who Facebook lumps into the "Web Design" category of interests.

This tactic ties back to the Ladder of Product Awareness from Ad Copywriting: Anyone who likes niche design tools is on an elevated step of the LPA. They likely know more about web design than someone who once shared a blog post about web design.

One more example because of how important this is: If you're targeting golf fans, don't target people who like Tiger Woods. Everyone likes Tiger. Target people who Like one of the lesser-known golfers. Those are the real golf fans.

🎯 Are you an ecommerce business? Then target the Facebook Pages of similar products. To generate a list of these, browse your product category on Amazon!

2. Profile data: Job titles

Either in conjunction with or alternative to interest targeting, you can also target people based on their job title or job category.

Examples of job titles include Digital Marketing, Software Engineer, CTO, etc.

Examples of job categories include Sales, Marketing, Business Operations, Computers and Technology, etc.

Unfortunately, there are endless variations in how people title their jobs on their Facebook profile, e.g. Salesperson, Sales Associate, Sales Manager, and so on. Fortunately, after we enter just one of these titles into the Facebook ad set creator, related job titles appear. Spend a few minutes checking off the relevant ones.

Job targeting is typically reserved for B2B companies who know the exact job types that most benefit from their product.

Otherwise, if you're a B2C company, it’s generally more efficient to rely on interest targeting. It leads to much bigger audiences. Because few people bother to list their work details on Facebook. And if someone doesn't list them, you can't target by it!

(This is why LinkedIn is a great channel for B2B advertising. I discuss this on Channels.)

Capitalism reality check #2: You know how Facebook keeps nagging you to fill out your profile data? It's not because they want to help your friends to know more about you. It's because they want more data advertisers can target you by.

3. Profile data: Behaviors

You can also target Facebook users based on their "behaviors," which are categories Facebook lumps users into based on their online and offline activity.

Examples include: 

Facebook appears to regularly improve the quality of these audiences. So they're definitely worth testing. (Just remember to make a new ad set for each one!)

Here's my rule of thumb with behavioral targeting: If I'm targeting a behavior with a large audience (>5 million people), I’ll pair it with interest targeting to reduce it to under 5 million. Because if the audience is that big to begin with, it's probably too loosely defined to convert well.

(Facebook will estimate your audience size for you during ad set creation.)

Targeting: Lookalikes

So we're done with the first type of Facebook audience targeting: profile data.

This next type is quite neat.

It consists of dynamically generating audiences: You provide Facebook with a list of email addresses of people. Then Facebook algorithmically analyzes them for commonalities, e.g. demographics and interests. They then search for these commonalities among a broader audience to piece together a tailored list of 1 million or more Facebook users who would be ideal for you to target.

(Facebook does a great job with lookalikes. I'm always impressed by the audience quality. So it's always worth testing lookalikes alongside interests and behaviors.)

The initial list you provide Facebook is called a "seed" audience. It'll typically be your existing userbase exported through your email marketing tool, such as MailChimp.

You want your seed to be the most down-funnel audience you have that's at least 1,000 people. Down-funnel means closer to the purchase conversion event. So if you don't yet have 1,000 purchasers, back one step out to registered users. If you don't yet have 1,000 registered users, back out to an earlier event such as add-to-cart (if you're an ecommerce company). And if you still don't have that, you can go off your website visitors.

The list Facebook then outputs back to you is called the lookalike audience

After you've uploaded your seed audience, you're presented with a slider to choose how broad you want Facebook's audience extrapolation to be. (See the above image.) Stick with the default value of 1%, which is 2M people for U.S. audiences. 

You should consider going up to 5M only if your product broadly appeals to most consumers, e.g. food and apparel. Otherwise, your lookalike's focus will be diluted.

That's actually all there is to the lookalike generation process!

But, before uploading your seed audience, there are two things to keep in mind:

Seed size

If your seed audience is smaller than 1,000 people, you won't be giving Facebook enough data to significantly identify commonalities. 

Conversely, if your list is much bigger than 5,000, you're probably not segmenting out your best users (those with the highest LTV). Think about it: Wouldn't you much rather have a lookalike generated from your best users than from the average of your users? 

So keep your seed audience to your best 1,000+ users.

Customer segmentation

Don't lump all your users into one seed audience if their purchases vary greatly. 

For example, if you're an apparel company, don't generate a seed audience from a combined list of men and women customers. They are vastly different apparel consumers and should be targeted separately.

Instead, generate seeds for each gender then independently target the ensuing lookalikes. (Remember to ensure you have at least 1,000 people in each seed.)

Lookalikes: Sourcing seeds audiences+

You can provide Facebook with a seed audience in one of two ways: contact data or real-time web traffic.

Contact data consists of uploading a CSV of email addresses or phone numbers. Because this is a one-time process (although you can add to this list later), this source is considered static

Compare that to this next seed source: real-time web traffic. Here's how it works: You tell Facebook to create a lookalike out of the people who visits a particular set of pages on your site (such as anyone who views your post-checkout page if you want to narrow in on converted users). 

You define your set of pages using Facebook conversion pixel.

Real-time traffic has the benefit of constantly accruing more traffic for Facebook to analyze. So I recommend using these instead of customer email exports.

Not every contact will match

Regardless of which seed source you use, Facebook will not be able to find a profile for every contact. Even if all your contacts are on Facebook, they might have signed up for Facebook with a different email address than the one you have on file.

(Especially if you only have their work email!)

This is why I suggest at least 1,000 people for seed audiences. It buffers against low match rates.

Audience overlap

Once you've generated multiple lookalikes, you're at risk of producing overlap between them. Oftentimes, the overlap is up to 40%.

If you then targeted identical ads to both lookalike's ad sets, 40% of your audience would be getting double-spammed! The end result is higher CPC's.

To isolate against overlap, use Facebook's audience exclusion feature during ad set creation: exclude all other lookalike audiences from the current lookalike ad set.

Here's a walkthrough of setting up a lookalike audience within Facebook Ads if you want to dive deeper.

Ad overexposure

You want to prevent ("exclude") people who've already clicked your ad from seeing it again within the ensuing 3 days. You also want to prevent people who have yet to click from seeing your ad more than once per day.

This gives people a break from your messaging, and boosts conversion in the long run.

If you forget to do this, here's what happens:

Here's how you setup 3 day exclusions: Use the Facebook conversion pixel to create a custom audience that logs your real-time web traffic for the past 3 days. This audience will then be available in the Exclusions dropdown list when you edit ad sets.

And here's how you prevent people from seeing your ad more than once per day: Keep your ad set's budget lower than it could reach daily (this is bounded by your total audience size) so that it takes longer for each person to see your ad again. 

In other words, use a purposefully low budget as a throttle on impressions.

When you modify your ad set's budget, Facebook estimates what percentage of your total audience will see your ad daily. In general, aim for 10% or lower. 

Ad settings

Here are the remaining settings you can configure per ad set:

Setting: Scheduling

The times of day your ads are shown.

Setting: Platforms

Facebook owns multiple "platforms," including Facebook proper plus Instagram.

Setting: Optimization for ad delivery

You can have Facebook algorithmically optimize your ads for Conversions or Link Clicks. Default to Conversions and choose the event that happens at least 25 times per week per ad set. That provides Facebook with enough data to optimize based on the audiences most likely to perform that event in your funnel.

Doing this puts Facebook in the driver's seat: You're letting them show your only ads to demographic segments and platforms (e.g. Instagram versus Facebook) where your audience is most likely to convert. 

They base this on the data they track from your conversion pixel: You choose an event you're tracking (e.g. lead, sign up, purchase) that occurs frequently enough (a few dozen times per week) that Facebook can extrapolate user demographics from.

This means your total audience size shrinks. Because Facebook will only serve your ads to the best-performing segment of it.

This is a good thing if you have a huge audience (well over a million) and need ways to reduce it so that you run ads cost effectively.

Other ad set settings+

Setting: Conversion window

I'm not going to get too into the weeds on this one.

Setting: Bid amount

Keep Bid Amount set to its default value of Automatic to have Facebook automatically determine what the optimized cost per 1,000 ad impressions (CPM) should be.

Facebook will be better than you at figuring out the balance between A) not overbidding for conversions from disproportionately expensive audiences and B) not underbidding such that you don't get any impressions at all.

That said, there's one good reason to switch Bid Amount from Automatic to Manual:

Setting: Delivery type

This is the speed at which Facebook delivers your ads. 

My growth agency does this for you

Bell Curve is the growth agency I built using many of the strategies in this handbook. We work with some of the fastest-growing companies in SaaS and ecommerce.

Facebook Newsfeed Ads w/ Examples

If you use an ad blocker, disable it for Facebook.com. Beginning today, you want to see Facebook Ads: You'll watch for copy and creative ideas to steal.

A Facebook Newsfeed ad consists of several components. And there are infinite ways to tailor each. 

For the sake of simplicity, I’ll share the template I use for 90% of my Facebook ads.

I recommend you similarly standardize your ads. Standardization makes A/B testing individual ad components more manageable. There's less variation to account for.

Let's run through the components that make up the Facebook's Newsfeed Ad. Then we'll take a look at a few Facebook ad examples.

Newsfeed ad: Text and Media

The Text component component of the Newsfeed ad unit appears above the creative. 

In two clear and concise sentences, describe the problem you solve or the value of the product you offer. You can be a bit wordy here in service of contextualizing the problem. But do not ramble on about all your features and value props. 

Stay focused on the best. 

Examples from my clients:

Further, Facebook Newsfeed Ads can either contain an image or a video as their creative. In either case, your choice of multimedia serves the same two purposes: grab the visitor's attention then get them to read your Text.

For more advice on ad copywriting and creative, read the Ad Copywriting page.

Videos

Facebook video ads often perform better than image ads. And, even if they only perform on-par, they're at least an alternative ad type to keep your ads fresh!

Here's what you need to know about running video ads — on any ad channel:

Newsfeed ad: Headline

This text appears below your ad's creative (i.e. image or video). 

If there's no text in your image, enter your primary ad copy here. (Read how to generate ad copy on the Ad Copywriting page.)

If you do have copy in your image, consider using this component to provide social proof, such as how many customers you have, who your marquee clients are, how many app store reviews you've received, and so on. 

If you have none of these metrics to show off, instead pitch a secondary value prop. 

Examples of social proof:

Examples of using a secondary value prop if you lack social proof to share: 

Newsfeed ad: Display URL (optional)

This is the cosmetic display URL that reassures visitors they'll wind up on your company site when they click your ad. (In contrast to some unrelated, spammy destination.) 

Just enter your domain name — as opposed to your full landing page URL — to keep this element looking clean.

Newsfeed ad: Real URL

This is your real landing page URL.

To track ad performance in your web analytics tool, each ad should have its own URL parameters ("UTM tags"). These will help you associate individual ad clickers with long-term user behavior, such as LTV, instead of just short-term conversions. 

Use my ad management spreadsheet to automatically generate clean UTM tags. 

Newsfeed ad: Link description (optional)

This is the final piece of text you can include in your ad. Of all the text components, this is the least read by audiences. So don't put your most important text here. 

My recommendation is to use it to address a significant product objection you know hurts conversion rates. Otherwise, if you have nothing critical to say, leave this section blank so your ad appears less like a cluttered mess in someone's Newsfeed. 

Less clutter means your other text components get more focus! 

Newsfeed ad: CTA button

This is the button at the bottom of the ad that people click to visit your site. (They could alternatively click the ad's image, which is more common.)

Generally, you should only use the "Learn More" and "Shop Now" CTA texts. And only use Shop Now if you're an ecommerce site. All other CTA texts convert worse.

Important: Do not use the "Sign Up" CTA if you're a SaaS product. This will hurt your CTR. Consider how signing up would be very committal at this stage. Visitors don't yet know nearly enough about your product!

Let's take a break

I know this handbook is getting incredibly dense. 

If you'd like a break, below are my most popular blog posts before we continue.

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Monitoring ad performance

Phewww. We're done with ad setup.

I hope you had a chance to run ads and that you saw lovely performance.

As you begin monitoring your ads, you'll need to keep track of several key metrics.

Monitoring: Metrics

You can monitor your ads in either Facebook's Ads Manager or Power Editor. The latter is better optimized for working with many ads at once.

You monitor your ad performance in the Facebook Ads Manager. It's the default screen you arrive at on when you log into Facebook Ads.

The default reporting columns in the Facebook Ads Manager are not ideal. I recommend using this process to customize them as follows: 

Once you've configured these columns, click the Columns button once more and choose "Set as Default" to save your selections.

Feel free to further customize your columns however you wish. (Study the Facebook Ads documentation to learn the various columns.)

Ultimately, what matters most is that you're tracking your cost per conversion. Your conversion event is usually acquiring a customer, which is your CPA.

Videos

When assessing the performance of your Facebook video ads, there are unique metrics to monitor, including Video Watches at 50% and Video Percentage Watched.

Video Watches at 50% is your key metric for determining how many engaged watches your video received. This is a reflection of how enticing the thumbnail image and first 15 seconds of the video are. 

Optimize for this metric to increase the volume of landing page clicks that'll then be taken by people watching your video.

Video Percentage Watched is the metric that indicates the quality of your video: The more people who watch to the end, the more consistently engaging the video is. 

If you routinely test new edits of your videoss, this is the metric you want to keep an eye on to determine whether the edit was a success.

On average, the longer your video, the smaller Percentage Watched will be. Don't expect a lot of people to watch the entirety of your 3 minute epic.

Monitoring: Breakdown analysis

To meaningfully assess your ads in the Ads Manager, you need to wait until you have at least 2,000 Reach per ad (number of people who've seen your ad). That tends to be a sufficient sample size for comparing one ad's CTR to its siblings in the same ad set.

When this Reach is achieved, perform a breakdown analysis by clicking the Breakdown button next to the Columns button in the dashboard. Then select the demographic criteria you want to segment your ad report by.

If you notice very bad CTR's for certain genders, age ranges, devices, or regions, consider removing them from your ad set's targeting. 

You can later return to targeting these demographics with ads better tailored to them. 

Until then, focus on what works in the short-term so you can prove to yourself that Facebook is going to be a positive-ROI acquisition channel for you. And that you're successfully creating compelling ads.

Note you create different ad sets to show different ads to different devices (because targeting happens on the ad set level), but within an ad set, you can break down performance results by different ad sets. Without having had to create multiple ad sets.

Continuing this theme of "targeting happens on the ad set level," keep in mind Facebook does not allow you to perform breakdowns by interests, job titles, or behaviors. Therefore, to assess the performance of sub-audiences within those targeting criteria, you should create different ad sets for each.

In the "Other ad set settings" section, I discussed optimizing Facebook campaign for Conversions. If you choose this option, you don't have to manually filter out your worst performing audience segments because Facebook will do it automatically. Although it waits for a larger sample size than 2,000 Reach.

Monitoring: CTR versus CPA

When tracking paid user acquisition performance, we study two sets of metrics:

Site metrics are ultimately more important than ad metrics because they're further into the growth funnel. They're closer to the conversion event we care about.

So we must not overvalue fantastic ad metrics without factoring in that weak site metrics may be neutralizing them.

For example, you could write incredibly enticing ad copy that generates an enormous amount of clicks — by promising something your landing page doesn't deliver on. 

Great CTR, bad CPA. But all that matters to your revenue is CPA, so what's the point?

Conversely, you may have ads with low CTR because you're targeting tiny niches, but the few who do click are highly likely to convert — and at higher purchase prices. 

The takeaway here is don't aim for clicks for the sake of them. Attract audiences your product can satisfy.

Therefore, we only concern ourselves with ad CTR when we're determining which ads within an ad set are performing relatively worse. Shut those off.

Monitoring: Site metrics+

Ad channels' reporting dashboards report ad engagement. But it's the job of our on-site analytics tools, such as Google Analytics or Mixpanel, to report site engagement.

That said, once we've installed an ad channel's conversion pixel, their ad dashboard will report on-site conversions we configure.

But their dashboards still don't tell us the full story. We don't know how many pages and which pages visitors viewed while on our site. And we don't know which non-conversion events they took on our site (e.g. viewed our demo video). 

You want to know this. You should know which audiences are most engaged with your value props. These are worth disproportionately putting time into optimizing.

Unfortunately, it's confusing how one gets the most out of Google Analytics. I'm not afraid to say it overwhelms me to this day. The way it tracks data isn't always clear, so I wind up doing some inferring — frankly, guessing — to tie all the data dots together.

At minimum, arm yourself with an in-depth knowledge of how the interface works. Go through the free Google Analytics Academy

Monitoring: Reporting

Ad reporting consists of configuring email digests and setting performance thresholds.

Daily emails

For each campaign, I recommend setting up a Report that emails you a daily summary of the Ads Manager column data you specified earlier.

In these reports, you're looking for CPA's that are becoming unprofitable (i.e. greater than one third your LTV) and whether CPC's are trending upward or staying flat.

In either case, you'll need to return to your ad set's targeting and your ads' copy and creative to improve performance.

Automated rules

Facebook handily offers a feature entitled Automates Rules that turns off ads, ad sets, and campaigns when they hit performance thresholds you deem unacceptable.

This helps you avoid the stress of checking your ads every few hours. Instead, when things are going south, rest assured Automated Rules will stop you from losing money.

Then, whenever you next have spare time, you can go back in to optimize your ads.

Conveniently, the metric thresholds you specify take the average of the last few days to ensure that normal intra-day performance variability doesn't falsely trigger your rules.

Don't setup Automated Rules for new campaigns you're still experimenting with. Only use rules to safely scale campaigns that are already working. Otherwise, your ads will constantly be stopped and restarted by the algorithms, which will prevent you from accruing sufficient sample sizes to know how well your ad tests are doing.

Monitoring: Social engagement

In addition to monitoring your CTR and CPA, monitor your ads’ social engagement.

Just like an organic Facebook Newsfeed post, Facebook users can Share, Like, and Comment on your ad. So, they can either positively (a Like) or negatively (an Angry emoji or reporting your ad). 

Negative social reactions hurt your ad's Relevance Score, which is the metric Facebook uses to determine whether your ad is appealing to audiences. Ads with higher Relevance Scores are shown more often and charged at a lesser CPM cost to you.

Because Facebook cares a lot about ensuring audiences see ads they like.

Therefore, when creating ads, be cognizant of avoiding negative reactions:

If you target receptive audiences with compelling copy, your ad may will receive positive reactions, such Likes and supportive comments. When this happens:

Be careful not to modify existing ads when running new ad experiments, because modifying ads resets their social engagement.

Just like you can delete dumb comments on your organic Facebook posts, you can delete them on your ads too. Be vigilant about this because they hurt conversion. I check my comments daily through the Business Notifications page.

Facebook retargeting ads

Most people who visit your site will not convert. 

These non-converters aren't a lost cause, however. 

In fact, they're the best possible audience to target because they already know who you are. So your ads can narrowly focus on explaining why they should use you instead of pulling double duty also explaining what you do. Ad focus improves CTR.

(These non-converters are on a higher step of the Ladder of Product Awareness.)

Advertising to non-converters in this fashion is called retargeting.

As long as these visitors were well-fitting audiences to begin with, retargeting is always worth your time: Retargeted conversions tend to cost much less than prospecting conversions (first-time targeting).

In fact, to not setup retargeting is to lose out on a single digit boost in your monthly conversion volume! So, this isn't optional. Be prepared to spend perhaps an additional 15% on top of your prospecting budget to cover retargeting costs.

Retargeting: The process

On Facebook, a retargeting campaign is created similarly to a prospecting campaign. There are a few differences in your audience setup, value props, and landing pages.

I'm going to walk you through each.

Retargeting: Audience setup

Setting up retargeting audiences is a bit convoluted. But it's not hard. Bear with me.

To maximize the efficacy of retargeting campaigns, we must create up to four custom audiences using the Facebook conversion pixel.

  1. Create a real-time traffic audience — First, using the conversion pixel (linked above), create an audience from visitors to your site over the past 90 days.

    If you had a lot of traffic during that period (tens of thousands or more), you can segment or further refine this audience by narrowing into those who spent in the top 25% of time on your site.

    These visitors are particularly valuable as they read most of your landing page copy. They're likely further up the LPA.
  2. Create a 3-day exclusion audience — Next, create another custom audience from your website traffic. This time, constrain it to visitors from the past 3 days.

    You will use this audience to exclude 3 day visitors from your 90 day visitors list. This way, you'll target people who've recently been to your site but not so recently that they wouldn't want to hear from you again just yet.
  1. Optional: Create a video viewer audience — If you've been running video ads, also create a custom audience from Facebook users who viewed at least 50% of your videos. 

    As with website visitors in the top 25% of time spent, these people have context as to what your product does — even if they didn't click through to your site. They are similarly qualified for retargeting.

    This is yet another reason to run video ads over image ads: Even if you're doing a bad job enticing people to click to your landing page, at least you can retarget video viewers with new value props that move them further up the LPA.

    In contrast, with static image ads, you can't retarget people who looked at your image for a few seconds.
  1. Create a converted exclusion audience — Create this fourth and final custom audience from your site's converted visitors.

    You can define a converted visitor as someone who triggered a custom JavaScript event on your site, or as someone who saw a particular page on your site that is only seen by those who've converted, e.g. a post-checkout Thank You page.

    When retargeting, always exclude those who converted so you don't waste ad spend. Or, if you're selling a product that can in fact be sold multiple times, create separate ad sets to target the converted with different products and value props.

Retargeting: Ad set targeting

Here's where these custom audiences come together. You'll create a new ad set that:

Got it? If not, take a minute to consider the logic.

Now, there's one last thing to do when setting up a retargeting ad set: For Bid Amount, select Daily Unique Reach (DUR) instead of the default value of Conversions. 

This will instruct Facebook to only show your ads up to once per day per user. This avoids annoying them. And DUR ensures every single user on your list sees your ad

In contrast, with Conversion targeting, Facebook will restrict targeting to just the subsets of your audience its algorithms believe are most likely to convert.

We don't want that. We want exposure to everyone on our handcrafted retargeting list. We know they are familiar with our company and are therefore higher on the LPA. Plus, the audience is unlikely to be so large that we can afford to limit it.

You can also pair Daily Unique reach with an artificially low daily ad set budget to further throttle ad exposure. The less spammed your retargeted audiences are in a given week, generally the better their CPA's will be in the long run!

Retargeting: Value props and landing pages

Since your ads failed to convert retargeted visitors the first time around, don't show them the exact same ads again! 

Instead, pitch them new, complementary value props.

Further, if you want to go above and beyond when optimizing retargeting, not only should you show new ads, you should also show new landing pages. Right?

Specifically, have pages that separately focus on each value prop you're newly pitching: If you couldn't get visitors to convert with a broad focus, try going narrow.

Summary

Don't you love summaries?

Create campaigns, ad sets, and ads

Monitor performance

Optimize

Retarget

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