Using Facebook Advertising for an eCommerce Store: Tips from an Expert

Note: this article originated as a video interview with Matt Astifan of Web Friendly, which offers popular social media marketing training courses online, including one devoted entirely to Facebook marketing. I’m his sister, Joyce Grace, a writer for ManageWP (a WordPress management dashboard) and I did the interview after StoreYa let us know about their cool app that can import WordPress WooCommerce products into Facebook (among other e-commerce platforms).

After it was recorded, we realized the audio on Matt’s side was no good. We tried to re-do the interview but still couldn’t fix the audio, to our frustration. So I did my best to make edits to the original in iMovie. If you find it hard to listen though the video, fear not, I wrote out what we talked about below, but the video is still better!

Facebook marketing encompasses a lot of activities. Doing it right could mean great returns on your investment, both time and money-wise. Matt Astifan of WebFriendly has an 8-hour online course you can take to learn all the ins-and-outs of how to increase the profitability of your business through Facebook tools. We’re not going to cover all of that though. Below we’re going to outline just one aspect of Facebook marketing: advertising.

Facebook advertising can be a waste of money if you don’t do it right. Some have tried it and found that it didn’t work for them. But what they don’t know is that there is a formula for doing it right. Facebook themselves will tell you the right way to do it. It’s no secret. But people don’t take the time to learn it, and that’s why it doesn’t work for them.

If you know the formula, you can experience an ROI like Matt did: he earned over $1000 in sales by spending just $40 on Facebook ads. And yes, the sales were tracked. Using tracking tools, advertisers can know their sales actually came from Facebook ads, and not another source.

So what are we going to learn today? We’re going to learn the ”industry standard formula for using Facebook advertising,” in Matt’s words.

Before we start, take heed: Facebook advertising is only one part of Facebook marketing, and in order for these methods to work most effectively for your business, there is more to learn. That’s why Matt’s course is 8 hours long!

Let’s begin!

Normally you might think your advertising dollars should go straight towards promoting the sale of a product. But that’s the first mistake people make. So why spend actual dollars on any ads if they’re not for making more sales? We’ll get to that.

First we need to learn what ad “campaigns” are in Facebook

There are three main goals to achieve when using Facebook ads. You achieve these goals using three separate “campaigns” in Facebook. Inside a “campaign” you should create multiple advertisements, which are referred to as “variants.”

On Facebook, when you see an ad, that is actually a “variant” that is being displayed in rotation among other ads in the same campaign. All the “variants” within a “campaign” share the same ad space, and the same ad budget set up within that campaign. The reason you would want to set up multiple “campaigns” with multiple “variants” is to be able to target different audiences on Facebook, with different messages for each audience.

But if you created, say, five different “campaigns” that were all targeting the same audience, and each ad looked different, you could potentially take up the entire ad space for that entire audience, if your budget was large enough. This is not an effective use of funds.

Facebook Ad Campaign Goal #1: Getting More “Likes”

In this type of campaign, you want to use the Facebook ad set up options to:

a) Target specific interests and ‘broad’ level categories.
b) Ask people to “like” your Facebook Page.
c) Set up variations of an ad to test which ones works better.

The purpose here is to get “likes” – nothing else!

Why spend money on this? Because “likes” on Facebook are valuable to have. They allow you to reach people with highly targeted interests related to your business. These are your “sales prospects” and if they “like” your Facebook Page, they are basically “opting in” to your receive your updates, the same way a person might “opt in” to your e-mail newsletter. For the same reason you would want to build an e-mail list, you want to build your fan base on Facebook. When a user “likes” your Page, they become a “fan” of your Page, in Facebook marketing terminology.

But here is why fans on Facebook are different than subscribers (not that one or the other is ‘better’ – e-mail marketing is still a HUGE necessity with e-marketing!):

With e-mail, you can really only send messages to a max of once a day, and that’s really pushing it. People will consider your e-mails spam if you write too much. But with Facebook, after a user has become a fan, you can potentially get in front of their eyes multiple times a day “for pennies,” according to Matt. And it won’t be intrusive.

Facebook Ad Campaign Goal #2: Get Engagement on your Page from your Fans

Matt refers to this as the “broadcaster method” or the “dollar-a-day-hack.” What you want to do here is use Facebook advertising set up tools to:

a) Promote the posts on your page as ads to your fans.
b) Set the budget to $1 a day for every 2000 fans you have.
c) Set up variations of an ad to test which ones works better.

BUT: You are still not selling here! Don’t promote posts that ask people to buy your products! Instead, use this opportunity to build credibility with your target audience. So what do you post? “Good, relevant content that people want to see and read,” says Matt.

Now you must be asking: why would I pay for this? If my fans have “liked” my page, don’t they see my posts for free already? The answer is “yes and no.” This type of promotion beats the ‘natural’ type of visibility you would have in other people’s Facebook feeds, which is controlled by an algorithm called “EdgeRank.”

Let me explain: You know how when you log in to Facebook you might have hundreds of friends, and have “liked” dozens of Pages, but you only get updates in your main feed from a fraction of those? The items that show up in your personal News Feed is based on what Facebook’s algorithm thinks is most relevant to you. It’s kind of like Google’s search ranking algorithm, but different.

If you have great EdgeRank, your Page’s posts will appear in people’s newsfeeds, yes, but only to a certain limit. The “broadcaster method” of Facebook advertising will help make your posts appear more frequently to your fans.

And that’s why we’re not selling yet. We don’t want to annoy our fans. We’re building engagement, to build trust with them. This is “relationship marketing.” “That way when we do end up making an offer for something for sale, they’re more likely to want to buy,” says Matt.

So is this really only going to cost $1 a day?

Let’s explain this. The first thing to know is the term “CPM.” This is the average amount of every 1000 “impressions” you’re getting, and though it does vary depending on markets, it costs about 25 cents on Facebook. So for about $1 of spending on Facebook ads, you get about 2000 to 3000 “impressions” (i.e. the number of times your ad shows up on a Facebook screen, even if it’s multiple times to the same user, which is a good thing). So Matt recommends that a business should set up a $1 budget for every 2000 fans it may have.

With this “broadcaster method” campaign, you want to post every second day. Why? So every post that is advertised to your fans gets 48 hours of impressions, since not everyone logs in to Facebook every day.

The aim is to get more likes, comments and click-throughs. These are types of “engagement.”

Note: There are different types of ads on Facebook that you can buy. Some are shown on right side columns, and now you can also design ads that show up in the News Feed. You can also select to have desktop or mobile ads in your ad settings. Right now the cheapest ads on Facebook are those that show up on right side columns on desktop computers.

Facebook Ad Campaign Goal #3: Ask your Fans for the Sale

In this type of campaign, you are going to use Facebook ad settings to:

a) Target your fans only.
b) Design ads using different types of “offers.” For example, you can ask fans to opt-in to something, join a webinar, or purchase your products.
c) Set up variations of an ad to test which ones works better.

Why fans only? Because you will get higher “conversions.”

What are “conversions”? Simply put, this marketing term refers to the pivotal moment when a viewer doesn’t merely just see an ad, but actually takes the action that the ad wants them to take. For example, someone sees an ad that says, “buy this product,” and then that person actually buys the product after seeing or clicking on that ad.  In general online marketing, the point of the “conversion” can be whatever you set it to be. In advertising, you want a high “conversion rate” which is the percentage of people who take the action you want them to take after seeing the ad. If your “conversion rate” is low, that means your ad is not effective, and you are spending money on “impressions” that are not resulting in many “likes,” click-throughs, sales or whatever the action is meant to be.

Not understanding conversion tactics is where most people make the biggest mistake with Facebook advertising (and virtually any advertising method). They start targeting broad categories and specific interests in a Facebook ad campaign, “and they’re going right to the sale,” says Matt. They’re not taking the first two steps outlined above. So their conversion rates are very low, which makes their “acquisition cost” very high. Then they claim that Facebook advertising doesn’t work, or that it’s too expensive.

The problem is not that Facebook advertising doesn’t work, but that the advertiser didn’t learn how to do it properly, which we’ve outlined in our steps above.

This third step alone is what got Matt between $1400 and $4000 in sales every month by spending just $40 – $70 targeting fans only. How does he know these numbers? He used conversion tracking in Facebook to make sure he knew where his sales where coming from.

In short, waiting until the third step to ask for the sale will mean the difference of between $10 or $20, and hundreds of dollars of ad spending to acquire new sales.

Do we set up our 3 campaigns consecutively or simultaneously?

In short, if your page does not have fans, get your fans first. Use apps that create “virality” to do this, such as contest apps, where fans are encouraged to share your page to their friends, which will then result in more fans, thus resulting in a lower cost-per-fan.

How much will we pay per fan?

This depends on your reach.

If you are a local business, you should limit the geographic reach of your ads, to stay more targeted for higher conversions later. But this means that each fan you get will cost more, because there aren’t as many people sharing and referring more fans to your Page. So you can expect each new fan to cost about $1 (again, it varies).

That’s not that great, BUT you have to keep in mind that these are highly targeted sales leads, which can result in higher conversion rates for your future advertising.  Since the cost for new fans is much higher for local businesses, or businesses with niche markets, creating campaigns with “virality” is especially important, to help keep your cost-per-fan manageable.

But if you are an e-commerce store that can ship products outside your city, you can run your fan-increasing ad campaign (step #1 above) to many more people, in much broader categories. Your ad reach should be in the millions in order to be effective.

For example let’s say you sell golf equipment. When you set up your Facebook ads to target people’s interests, you would type in a wide variety of things relating to golf: golfer names, types of golf clubs, golf courses, golf tours and so on. If you run an add saying “like my page” to the Facebook users who have listed those golf-related things as their interests, that’s when the numbers ad up, and you can get new fans for pennies; literally. And quickly too – we’re talking about the potential to get 10,000 fans within a month or so.

I’ve set up and dealt with quite a few e-commerce related clients, many using WooCommerce on WordPress. It’s important to keep in mind that even if you use e-commerce to sell products, that doesn’t necessarily mean you should target an audience that is too broad on Facebook. Consider the following factors:

1. Will there be tax or customs hurdles getting your product across borders?
2. Will the cost of shipping outweigh the benefit of ordering your product online? (Perhaps you should consider distributorship or using a wholesale function to sell products in larger quantities).
3. If you are a distributor or franchisee of a brand, consider the allowances you have in your contract for selling outside your given geographic territory.

In short: you want your campaign’s target audience to be as large as possible, while still making sure these people can become actual buyers.

What’s all this about testing ads to find out which ones work?

With any type of advertising you do, especially on the web, you want to test for effectiveness. Testing will allow you to see, usually to your amazement and surprise, which headlines, photos, or ad copy works best. By “works best” we mean, “converts higher.”

First we need to explain how best preforming ads are measured:

What you want to look at in Facebook advertising is your “click-through rate.” It’s also abbreviated as “CTR.” It means what you’d guess – the percentage of people who click on the ad (versus seeing the ad in an “impression” or that ad “converting” to a sale after the click). The average CTR across Facebook is 0.04%. If you want to be spending as little as possible on each “conversion,” your goal should be a 0.5% CTR.

Each type of ad on Facebook can result in different CTR percentages. The new(er) News Feed ads, for example, can easily garner a 2 – 4% CTR. However, you pay more for those. But for the right-side column ads, you generally want to keep your CTR at 0.5% or higher. If it goes lower, you should consider stopping the ad, since that is an indicator it’s not performing well.

If you are familiar with Google Adwords’ “quality score,” know that Facebook ad costs run on sort of the same principle. The simplified explanation is that if people click on your ad more often, your ad will rise to the top and be shown more often than competing ads. Facebook only wants to show ads that are relevant and that people want to see. How do they know what people want to see? From the number of times the ad is clicked on. When the ad gets clicked on more, it gets seen more, and advertisers pay less per click.

So how do we get a higher CTR for an e-commerce business on Facebook?

Step one: find out what photo will work the best

Facebook reports that the most-clicked ad images are of faces, food and animals. That’s great for coaches or consultants who can just use their photo. Matt’s profile photo on his ads convert better than anything he’s ever tried. But for e-commerce, or businesses where these types of photos won’t relate, it’s a bit different. You have to get a bit creative…and do some testing.

What you want to do is create your ad variants to test different types of photos. Keep everything the same on the ads except the photo; same headline, same description, different photo. Let those variants rotate automatically within your campaign on Facebook, and see which ones get the most clicks. This will help you find out what photo works best for your business. Usually you would never guess right about which images work the best – that’s why testing is so important with advertising. We often don’t know until we try, no matter how skilled in marketing or advertising we are.

Step two: test your ads against controlled variants

After you’ve got your winning photos, you want to set up four different variants within a campaign. This is called “split testing.” To start, create an ad based on your best assumptions of what will work best for your target audience.

Then click on “create a similar ad” next to your first ad design. This will duplicate your ad to a new variant. In this duplication, the only thing you want to change is the headline. Then go back to your first ad design, and click “create a similar ad” again. This time, change only the image. Do this again and the third time, only change the description. Now you have three ad variations being tested against the first ad design. They are testing:

a) The headline
b) The image
c) The description

Why do you only change one thing at a time? Because otherwise you won’t know what the difference was that caused the higher CTR. If you don’t know what the winning factor was, you won’t know how to improve upon it later.

Run these ads for a while and your Facebook ad statistics will show which headlines work the best, which photos work the best and which descriptions work the best. When you have your answer, you repeat, and start again with new combinations, using your winning ad as the first one to test against.

Most people fail to create a winning ad on the first try. This is why testing with multiple variants is essential to a successful Facebook ad campaign. Facebook won’t prompt you to create variants – you just have to know to do this, if you want Facebook ads to be worth your while.

Do you ever retire from ad testing?

In short, no. There are always reasons to keep trying to improve your ads with more tests. Matt has noticed when he finds an ad that works, he lets it run for a while on its own, but even that will die off in performance, likely because people get bored of seeing the same ad over and over. Then he has to start again with a new ad, and new tests.

Some final tips:

• Another way to overcome the “faces, food and animals” photo issue is to create pages and ads about topics people are passionate about. For example, Matt explains in our video interview that he had a friend selling t-shirts with statements about animal cruelty printed on them. People who are passionate about animal abuse will click to “like” that Page and will want to buy those types of products. His friend was profiting $1500 to $2000 per month selling these types of products. Appealing to people’s passions can work.

• The above example shows that we always want to be testing new things, despite what Facebook reports will tell us. Facebook evolves, and with that, its ads evolve too. Today, the sizes of photos in News Feed ads are much bigger, which means different types of photos in those ad formats may have more impact now than they did before when the original report came out saying that faces, food and animals work the best. At that time, only right-side column ads were available.

• Matt suggests setting up ads that show just one product at a time, rather than an entire e-commerce store. The reason? They’re more targeted, and will appeal to people who have niche interests, resulting in higher conversion rates. For example, if you sell golf clothes, create an ad targeting only women, and show ads of female golf shirts. Then do a separate one for males.

• If you want to increase fans, use a fan gate. If someone has “liked” your Page because you offered them a coupon for doing so with a fan gate, they now have more incentive to buy than if they were given a coupon for no ‘exchange’ on their part. In other words, the more ‘work’ it took for them to get the coupon (in this case, “liking” the Page), the more likely they are going to use it, and the more receptive they will probably be to your messages. Not that we’re psychologists here or anything…

• You also want to look into “retargeting” with advertisements. These ads show up based on a users’ previous web viewing history, and reminds them about your products so they are more likely to come back and buy.

Why not just use Google Adwords to get search traffic to my store instead of Facebook advertising?

Facebook is best used for products and services that people don’t know about. If you have a business where people know what they want already, like a plumber, then they will search for it. But on Facebook, you can create awareness for something new.

A book called “The Facebook Era” tells an example of a company selling red pants to Red Sox baseball team fans. It was hugely successful. People won’t necessarily have the idea of wearing red pants to a Red Sox game until it is presented to them. You can use Facebook to educate people on why they should buy your product.

On Google Adwords, you can target based on geography, but you can’t necessarily target people who are “married” or people who have used particular hashtags or listed interests on their profile. Even when Google Adwords does target users based on interests or past browser history, keep in mind there can be multiple people in a household using a single computer, so you’ll be spending on “impressions” that are not always going to be useful to you. With Facebook advertising, you are targeting specific users, not IP addresses or computers.

Why put an e-commerce store in Facebook when I could just send them to my website?

There is a lot of ‘share’ functionality within Facebook that makes a Facebook e-commerce store valuable. You don’t want to neglect your website’s e-commerce, but you can certainly capitalize on the viral abilities of Facebook to accentuate your online sales.

Is Facebook marketing considered expensive compared to other ad options?

Well, as Matt explains, the only marketing investment that is expensive is the one that doesn’t work.

“Social media is still a baby, and it’s costing more and more to get inside the game. If you started with it a couple years ago, it would have cost a fraction of what it costs today. So the price is increasing, “ says Matt.

When you look at traditional forms of advertising mediums, which cost hundreds, if not thousands to participate in, due to their age, then social media costs ‘peanuts’ by comparison. And the data and stats that traditional forms of advertising give you are not even as powerful.

Take advantage of the fact that social media is still a baby, and grow your network. It’s still very easy, and costs very little to get in the game now. In five or ten years, you will have a huge network, great retention, and customers that will by from you repeatedly.

But keep in mind social media advertising has a different mindset. You want to focus on acquiring that network, retention and developing long-term relationships. This is lifetime value. If you’re only focused on making a “quick buck” you won’t get much value from it.

To Conclude: Thanks for the Tips Matt!

Thank you to Matt for sharing his expertise on Facebook advertising with us. As we can see, we’ve only touched the tip of the iceberg when it comes to knowing how effective Facebook marketing can be for a business. Also thanks to ManageWP’s WordPress blogging division for lending their writer, Joyce Grace to StoreYa, to put together this interview with her brother. And surely check out StoreYa’s Facebook shop app for importing e-commerce products into Facebook!

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