The Framework for Facebook Ads Your E-Commerce Brand Can’t Ignore

December 3, 2017
The Framework for Facebook Ads Your E-Commerce Brand Can't Ignore

E-commerce and Facebook Advertising can be a match made in heaven. The ability to bring your target market successfully through an entire buying experience with the ability to scale sales, is very appealing to a lot of e-commerce entrepreneurs. With good reason.

Now before you start saying, ‘But I heard Facebook is dead!’ or ‘Facebook is going to be replaced by Snapchat!’ or ‘What about Instagram?’ let’s look at just a few statistics. By the way, Facebook acquired Instagram in 2012.

  • With 1.32 billion daily active users, Facebook is the most widely used social platform by quite a bit. Whatever your business goal—brand exposure, website traffic, sales —Facebook should, and likely will, make up a sizable part of your marketing strategy.
  • 79% of Americans use Facebook—the platform with the second closest usage percentage is Instagram, at 32%.
  • More than half (53%) of U.S. residents use Facebook “several times a day.”

So, would you like to know how to successfully create sales for your online store with the platform used by nearly 80% of Americans? Good, keep reading.

The best way I’ve found to explain a comprehensive Facebook ads strategy for e-commerce is by using the E-Commerce Foundations Framework matrix, shown below. Let’s go through it together.

E-Commerce Foundations Framework

Audit

This is the first thing you want to do when deciding if now is the right time to implement a Facebook Ad strategy. You want to look at the user website experience,  branding, the unique selling proposition and current sales.

Questions to answer during this phase are:

  • What is the average order value?
  • What is the user website experience like? Does the website make it easy for users to find what they want, add it to their cart and checkout?
  • Is the brand popular, strong or well-known within the target market?
  • What is the unique selling proposition?
  • What are the current sales?
  • What are profit margins like?
  • How competitive is the market?

It’s important to know the answers to these questions before deciding to move forward. If you have questions after you evaluate these points, please post them in the comments below!

Research 

Next, you will research the target market and avatar. How clear of a picture you have will help you assess the current situation. I cannot stress the importance of this step enough when it comes to e-commerce advertising. Targeting is crucial and it’s difficult to find the correct targeting when this step hasn’t been done properly.

You may need to dig deep and research the target market to create a robust avatar. Audience Insights is a great tool for this. For example, ‘women’ is a demographic not a target market or avatar. This would be a bit more robust:

Women between the ages of 25 and 44 who are married and live in the United States or Canada. They value holistic wellness practices, healthy eating and natural skincare. They practice yoga and meditation.

Then you want to take a look at the competitors in the marketplace and what they are doing. How can you position the brand differently? This comes back to knowing the unique selling proposition so it can be leveraged.

Finally, you want to evaluate the growth potential by utilizing Facebook ads. Can new audiences and purchasers be found and brought through the buying experience? This is where past customer data and the Audience Insights tool can be invaluable.

Implementation 

This is where you will be implementing what you have learned in the previous steps into a comprehensive Facebook ads strategy. Sometimes this is referred to as a marketing funnel. Now if you aren’t sure what a marketing funnel is, stick with me. It will be more clear in a minute.

Top of Funnel 

  • Objective: To educate, create awareness and cultivate brand buzz for the products.
  • Audiences: Cold Traffic – usually interest based. This is where you will utilize what you learned in Audience Insights about the target market and avatar.
  • Types of Ads: Single Image, Video, Carousel or Canvas

Middle of Funnel 

  • Objective: To cultivate an interest in purchasing a product and intent to buy.
  • Audiences: Warm Traffic – Website traffic, email subscribers, people who have interacted with Facebook and Instagram pages
  • Types of Ads: Single Image, Video, Carousel or Canvas. Different creative than in top of funnel.

Bottom of Funnel 

  • Objective: To get the user to purchase
  • Audiences: Those who have viewed content or added to cart on website but did not make a purchase. Free shipping or a discount works well.
  • Type of Ads: Dynamic Product Ads.  Shopify integrates the best with Facebook for Dynamic Product Ads.

It’s important to keep in mind that in order for Facebook to help you get more e-commerce sales, they need data. So, if you don’t get a sale within 24 hours don’t panic! Facebook ad strategy for e-commerce is driven by data and testing creative, copy and targeting.

Maintenance 

At this point, you are likely getting sales and seeing some traction with your efforts. Congratulations! This is where you troubleshoot, optimize and scale for more and cheaper sales. This is done by testing, testing, testing. You will want to test different types of ads, copy and targeting until you are crushing key performance indicators (KPIs). What are those? They are industry benchmarks you can use to know if an ad is a winner or not. For e-commerce they are:

  • Click Through Rate (CTR) of 1% for cold traffic and 3% for warm traffic
  • Cost Per Click (CPC) between $1 and $2
  • Relevance Score of at least 7

One caveat is, if you are getting a healthy return on ad spend and aren’t meeting KPIs don’t worry about it. What is a healthy return on ad spend? This largely depends on profit margins but anywhere from 3-5 times return on ad spend is good. So, let’s say you are getting a 4 times return on ad spend. That means for every $50 spent in advertising, $200 of sales will be generated. For more information about tracking sales, check out this article. 

The Magic Formula 

In summary, I’d like to boil everything down to the the magic formula. This is what you absolutely need for success with Facebook: a solid brand and unique selling proposition, a validated funnel (see Implementation and Maintenance) and a business model with enough profit margin to scale sales on Facebook. That’s where the money magic happens.

 

If you’re interested in getting started with e-commerce or currently have a store, please take a look at Shopify and see how it’s features can grow your brand and increase your sales.

Please post any questions you have in the comments below!

Facebooktwitterlinkedinyoutubeinstagram

Hannah specializes in Facebook Ads Strategy for e-commerce businesses. When she’s not elbow deep in data, getting her clients more sales, you can find her traveling, knitting or practicing yoga. She lives in Chicago with two rescue cats, Bailey and Scooter, and her non-rescued husband, Mark.

4 Comments

  1. Brad

    Thank you Hannah. Great Post!

  2. Hannah Mongiat

    You are welcome! Thanks for having me on the blog 🙂

  3. Jase

    Hannah, When you say:

    “It’s important to keep in mind that in order for Facebook to help you get more e-commerce sales, they need data. So, if you don’t get a sale within 24 hours don’t panic! Facebook ad strategy for e-commerce is driven by data and testing creative, copy and targeting.”

    Are you talking about Facebook actually helps you by targeting certain type of people within the audience you select? Or do you mean the user needs to keep looking at data, and testing new audiences and ad copies.

    • Hannah Mongiat

      Great question, Jase! So it’s both.

      As more people engage, click, add items to their cart and checkout all that data is collected by the pixel and goes back to Facebook. Then the algorithm helps you by finding more people within your target market most likely to purchase, click, add to cart (whatever your conversion goal is). Let’s say, just for an example, you and I are in some store’s target market. However, over time you don’t engage, click, purchase, etc. but I do. So Facebook is going to go find more people like me and less like you. That’s why it’s important not to panic right away. It takes 8,000 impressions for the algorithm to optimize properly so you want to wait to make any changes until that point.

      Ok, so that being said we as marketers need to keep looking at the data, testing new audiences and ad copies. If we have a winning ad, it doesn’t mean we will necessarily turn it off but we are always trying to get better results. Often times, with a new ad account it takes a lot of audience and ad testing to find one that converts well. Testing is the name of the game in e-commerce.

      Does that help? Let me know if you have any other questions!

Write a Reply or Comment

Your email address will not be published. Required fields are marked *