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Facebook Advertising Crash Course for E-Commerce Store

Do you own a business? Are you an amateur media buyer? This is our Facebook 101 advertising crash course. It is a must for anyone that wants to scale their business.

Facebook FlowChart

Bidding System - Facebook Ads is based on a bidding system like an auction. If a lot of people are targeting the same audience the CPM (Cost per 1000 impressions) will increase due to increased competition. 

However, the bidding system is different than a traditional auction because the winner isn't the ad with the highest monetary bid, but the ad that creates the most overall value for both BOTH THE MARKETER AND THE FB USER. 

The ad with the highest TOTAL VALUE will be shown more than other ads. To get the most out of advertising on Facebook, you should strive to maximize all factors: 

  • Bid the maximum you're willing to pay

  • Create compelling ads

  • Target them to the right audience 

Campaign Types

Engagement - (key to future sales) - Use Third world countries to build up ad engagement then run the same ad in T1 countries. The first part of the ad Life cycle. Should not expect purchases running this camping, however, if you do that is a very good sign for your product. 

Traffic - Optimizes for sending people to your website. Works better with a seasoned pixel and better data. 

Conversion - Later phase, uses data to get higher conversions, better if you have better data from pixel and large audiences. 

Lead generation - Used to get larger leads, good for email list growth, not necessary. 

Audience Types

(To create audiences Menu - Assets - Audience)

Custom Audiences - Target people that have triggered specific events in the facebook pixel, useful for retargeting or creating lookalike Audiences. 

Lookalike Audience - Facebook will create/generate an audience by connecting data points with its database by a specified accuracy given by the audience accuracy percentage. Create them from custom audience. Can also use uploaded email lists. 

When using LAAs there is no need to specify age range or country, leave them default. Unless in the creation of the LAA the country was not specified. Then specify a country in the ad set creation process. 

(Creating multi-varied percentage LAA) ex 1-2%, 3-5%. 5-8%

(Show Advanced options) - select x number of audiences - then adjust percentage slots desired, this will automatically make x LAAs with multiple percentages. They will be populated in your audience database. 

Audience Targeting Types

Interests - what topics, activities, etc that people are interested in (based on page likes and fb engagement).

Behaviors - What people are shown to do from there activities on FB. Ex. Engaged shopper, credit card users, etc

Demographics - wealth, occupation, relationship status.

Ad Types

Page Post (most common) - video ad made for driving traffic.

Carousel Ads - Good for showing off a collection of clothing, or one product each photo showing a different feature. 

Limiting Audience

  • Use Google Trends to see the best target cities and states to target with the most interest. You Can also use global view to see what other countries may be good to target for your product. 

  • Google search for different niche brands or magazines. Type in “Niche + Brand” or “Niche + Magazine”. An example would be “Sports + Magazine”. Save them to target later. 

  • Use Page Likes Tab in audience insights tool to find pages the audience is most likely to like based on a general interest pre-selected. Use affinity to see what people would most likely like. 

INTEREST TARGETING TYPES: (make use of facebook’s ‘suggestions’ tab)

  • Celebrities / Authors / Athletes 

  • Magazines / Books / Websites 

  • Brands / Companies

  • Related Products

  • Hobbies / Activities

  • Broad Interests

Setting Up Ad Sets

  • Offer - Can create an offer to increase conversions - insert coupon code

  • Can combine Interests/behaviors and exclude interests/behaviors.   

  • Edit placement - Select FB feed only or include Insta feeds.

  • Large Audience (3 - 7 million) - gives enough room for FB to optimize and keep CPMs at a reasonable cost. 

  • Conversion window - 1 day click or 7 day click - facebook will optimize targeting to get people to click on your link within a day of interacting with the post. 

AdSet Learning Phase Facebook has a Learning phase in which the algorithms optimize to find the right audience dependent on your campaign goals, FB takes 7 days to “learn”. The learning phase starts at the creation of an ad set or a significant change to an ad set. When an Adset is in the learning phase performance will vary. That's why when the budget is increased for scaling, performance tends to dip initially and results are inconsistent for the first few days.

Significant changes that will trigger the reset of Learning Phase 

  • Any change to targeting.

  • Any change to ad creative.

  • Any change to optimization event.

  • Pausing your ad set (or the campaign it's in) for 7 days or longer (the learning phase will reset once you un-pause the ad set or campaign)

  • Adding a new ad to your ad set

  • Large increases or decreases in budget or bid cap

Facebook needs at least 50 conversions within 7 days in order to properly optimize (Optimization for ad sets) . 

  • Maybe inappropriate for purchase campaign immediately, start with ATC. (Split-Test)

  • FB recommends a bid to budget ratio of 1:10, 1:25 is better.

  • So if CPP(Cost per Purchase) is $15, need $150 ad spend to optimize over the course of the 7 days. (Only do this with Winning Adset + Winning Ad)

  • Can still use $5 -$50 ad sets but adset will be less consistent. (Use this for testing new audiences that may present risk)  

Adset Budget (For Testing)

  • $5-$50 ad sets are fine. It depends on how fast you would like to collect data. 

  • Need at least $20 spent on an ad set to make a decision. $50 is optimal.  (Gabriel recommended)

Split Testing Ads

  1. Run different ads with the same general large audience to see what Ad performs the best. If more than one good ad, use 1 and save the rest to use later to combat ad fatigue. 

  2. (Optional) Take winning ad, and if you choose to, run different variations of the same ad, brightness, captions, ad copy, music, video clip order, thumbnail, first 3-5 seconds of video ads. This will give you the best version of the winning ad for future scaling. This could significantly boost conversion rates to your website.

Ad Copy

  • Compelling 1 or 2  liner on top.

  • All Lines are bullet pointed with an emoji. Sale, Links 2x.

  • Most look clean and find information quick and fast. 

  • At the end mention free shipping - CTA to share with friends

Acronym Definitions

IC(Initiated cart)

ATC(Add to Cart)

Relevance - Facebook metric to score ad effectiveness to audience. 8+ is good

CTR(All) (Click Through Rate) - All Link Clicks, 3% + is good

CTR(Link) - Link click, 1% +

CPC (Cost per link Click) 

CPP (Cost Per Purchase)

CPM(Cost Per 1000 Impression - May indicate if ads been seen to many times, targetings off or ads just bad.

ROAS(Return on Ad spend) 

WV(Website visitors)

PPE (Post Paid Engagement) - Basically just run an engagement campaign.

CPP(Cost per Purchase)

CPUC( Cost Per Unique Click)`

CV(Content Views) 

LAA Requirements (more data more accurate)

  • 95% VV - 100k reached and about 1000 95% VV 

  • ATC - need (20 - 40) for ATC LAA using PPE campaign, need 500 (1000 recommended) for ATC LAA using a conversion campaign.

  • WV -  need 10,000 visitors to run LAA. 

  • Purchases - need at least 100 or 200 for LAA

  • (Refresh all LAAs after a significant amount of data is collected to make them even more accurate)


  • Optimal is 1000 events 

Evaluating If an Ad is Running Well

(During Engagement Campaign) 

  • Look at CPM, link clicks, and cost pert ATC to determine winners. 

(Traffic or Conversion Campaigns)

  • Calculate Breakeven ROAS. Kill any ad sets with ROAS below breakeven after 3 - 5 days of running. 

  • To compare ads with good ROAS, look at purchases, ATC, website visitors, and the cost per customer to see which ones are performing the best.

  • Use Breakdown Tool to create more efficient ad sets to create lower CPM and higher ROAS. 

Ad Fatigue

  • Make sure your product is in demand.

  • ROAS will drop over time mainly because of competition copying ad materials and promoting the same product. WATERMARK (30% opacity in the center of the screen) ads to prevent stealing and slow the fatigue cycle. 

  • Create new video content progressively, one new ad a month. 

  • When your automatic bidding ads start to fall off use manual bidding to try to revamp the adset. You’ll start getting better traffic.

We hope you enjoyed this quick Facebook advertising crash course for E-Commerce. We do recommend having a paid media buyer or agency to take care of paid advertising. This is a great start for beginners to get an understanding of how Facebook advertising works.


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