6 Essentials for Winning With Facebook and Instagram Ads
Before you can begin to run successful ad campaigns, you need to understand that your ads can’t succeed in isolation but they’re dependent on the success of other elements in your business. We’ve narrowed it down to six key parts:
1. Website Conversion Rate
2. Traffic Quality
3. Offer
4. Creative
5. Average Order Value
6. Inventory
In this blog post, we are going to cover these 6 areas at length to give you a comprehensive overview of how to win with your ad campaigns! At the end, you’ll have a good idea of what you can do to optimize these elements and where to begin when it comes to the foundation of building an ad campaign.
Website Conversion Rate
Let’s start with your website! After all, this is one of the major touch points you have for engaging with consumers and as an e-commerce business, it is essential that your website is optimized to generate conversions. A typical e-commerce website converts at a rate of 2-5% meaning that 2-5% of browsers will turn into buyers, so if there are 100 visitors on your website, you will have 2-5 sales generated from that amount of traffic. In Shopify, you can find this percentage under analytics, or you can calculate your website’s conversion rate by dividing the number of purchases you received in a given time frame by the total number of people who visited your site and multiplying it by 100%.
If you find that your website is showing a conversion rate of less than 2%, then it may be a bottleneck in your ad campaign. This results in making it much more expensive to acquire customers and will limit how profitable you will be able to be with your ads. So before investing money into ad campaigns, make sure that your website is set up to optimize conversions and work in your favor. You can do this by…
-improving the design of your website
-making your call-to-action buttons more obvious
-removing expensive shipping costs
-hiring a site conversion rate optimization specialist
In the world of e-commerce, it is so important for your website to be working in your favor. Your ads may be successful in directing customers to your website, but if they arrive there and are confused or can’t find what they are looking for, then it’s very unlikely that they will return.
When you are able to effectively get your website conversion rate above 2% you can then focus on finding quality traffic to funnel to your website!
Traffic Quality
You can have the most amazing, incredible, and out-of-this-world website with an awesome conversion rate… but if you’re sending the wrong people to it, your ad campaigns will fall flat. This is where knowing your ideal customer and developing a buyer persona comes into play. Your audience targeting is key, but so is your marketing objective when building your campaigns in Ads Manager.
Let’s talk quality over quantity for a quick minute.
A campaign with the objective of conversions will show your ads to people who are most likely to make a purchase when they visit your site. This is considered high traffic quality.
On the other hand, a campaign with the objective of reach will display ads to the maximum number of people regardless of if they are ready to make a purchase or not. This means that naturally, it will be a lower quality of traffic on your site.
We recommend building conversion campaigns so that you have a quality flow of traffic to your site and will see greater success in conversion rates and sales. In order to effectively execute a conversion campaign, you will need to thoroughly research and identify your ideal customers so that you can tap into the part of Facebook’s algorithm that targets customers who are ready to buy.
When you understand the type of customer that you want to visit your site, you can make sure that your ads are connecting with quality traffic. This is also achieved through presenting the right offer to your audience.
Offer
Drum roll, please…
You may have heard that the number one rule in marketing is to make the right offer, at the right time, in the right place.
This is KEY to a successful campaign. If you’re not offering something that people want, your ads are doomed from the get-go. Not to sound dramatic but yes, doomed. Want to avoid this disaster?
The answer is testing.
If you are a new company and your products have never been tested or sold to an audience before, they are not validated. Without data, there is no way of knowing if people are going to want your products. So, if you are selling multiple products the first thing you are going to do when you launch your ads is product testing. And it’s not as scary as it sounds. You’ll want to test multiple products to the same audience to see what works. Once you have gathered this data and you are able to see which products produce conversions or a higher return on ad spend than the others, you’ll be able to make more informed decisions moving forward. Pretty cool, right?!
After testing products, you can move into testing offers to see what produces the best results. When you know what products your audience wants and pair them with a valuable offer, you have a winning combination! Here are a few ideas of what you can offer customers and test to discover what is most effective for your audience.
Offer Ideas:
-Free Shipping
-Discount codes for items left in the cart
-Bundle Offers
Again, the number one rule is to discover the right offer and display it at the right time and place to capture your customer’s attention and make a sale. This includes determining where to present the offer depending on where the customers are at in the sales funnel. If you want to learn the ins-n-outs of sales funnels, check out our previous blog post here and learn everything you need to know about consumers in the stages of a sales funnel.
Creative
What if we told you that on mobile devices you have less than 2 seconds to grab the attention of customers when they are scrolling through their feed. Yep, that’s right, an entire TWO seconds.
So, what does that mean for you when developing your ad campaigns?
It means killer creative. Your ads need to be designed in such a way that they stand out from other ads. Your creative strategy needs to be really dialed into what your customers will stop and take notice of. The creative aspect of your ads is a factor that can either make or break the overall success of your campaign.
Here are 3 tips that we recommend for your creative strategy:
1. 15-second video ads that capture attention quickly from the first frame and that are understandable regardless of sound by using captions and graphics.
2. Never use stock photos! We have seen lifestyle photos of people using products that work SO much better. There is a much stronger connection when your audience sees something more realistic and the product in action.
3. Foster social proof on your ads by running the same ad ID in an engagement campaign. This means that people will engage with your ads through likes, comments, and sharing. In return, your ads will build trust among the audience through social proof.
Think outside the box and remember to keep your customers in mind when it comes to creative. Good ad creative is one of the main differentiating factors between successful and unsuccessful e-commerce campaigns.
Average Order Value
Alrighty, average order value…don’t know what that is? Here is a quick crash course.
Often times you may hear marketers refer to this in shorthand as (AOV). The average order value is basically a metric that helps you as an e-commerce business to understand consumers’ purchasing behavior by tracking the average dollar amount spent every time a customer places an order
You can monitor your AOV over any amount of time but we recommend calculating your AOV as a monthly average. This also helps you evaluate your pricing strategy and provides the metrics you will need to measure the long-term value of individual customers. There is a strong relation between AOV and profit; when the average order value increases there is usually a direct increase in revenue growth.
Calculating your eCommerce AOV does require some mathematics but don’t worry, it’s not difficult at all and we’ll give you a quick example!
You just divide your total revenue by the total number of orders in a period. For example, if you own a hat store and your total sales in February equated to $30,000, and you had 500 orders that month:
$30,000 / 700 = $60.00
This means your AOV in the month of February equals $60. If you want to increase your AOV (which you should want to do) there are essentially two ways to go about this.
Option A is increasing your product’s prices. We recommend this to clients if we think they will still be competitive in the marketplace. Most of the time, we recommend our clients go with Option B which is creating bundles.
A bundle, or a package deal, is giving customers a discount on products they may have initially wanted to buy separately at a higher cost. The bundle offers the customer more value and makes the buying process easier by simplifying the customer’s purchasing decision. In turn, this increases your average order value and your return on ad spend.
Here are some ideas of bundle offers you can use for your products to encourage customers to spend more!
1. Bundle new products with items that have sold
well with your consumer base in the past
2. Bundle products as a gift option during holidays
3. Offer volume discounts! After purchasing a set number of items the consumer receives a reduced price per item
4. Bundle together products that are similar with an added discount so customers will opt to buy them in the package for a deal
What’s the key to bundling? If you guessed testing then you are correct! By experimenting and testing out what combinations work best, you’ll be able to see what resonates with your audience the most and build from there.
If you have a low order value, you may want to consider trying some of these tactics to boost your AOV. Otherwise, it may be a bottleneck in your campaigns, making it difficult to be profitable with your ads.
Inventory
The last factor we are going to discuss is related to inventory and the role it plays in ensuring the success of your ad campaigns.
Essentially the overall effectiveness of your ad campaigns relies on whether or not you have a thorough process in the back end of your business to keep inventory stocked and to be able to effectively fulfill orders.
Facebook will actually penalize your campaigns due to having items listed as “out of stock” on your website. They view it as a poor user experience, but you can avoid this by forecasting well and keeping your inventory fully stocked. Your other option is to change the verbiage on your website to say “pre-order” instead or completely remove the item from your site until it is available to customers for purchase.
This can be a major bottleneck, especially for start-up businesses that are not properly equipped for the rapid growth that advertising can bring. That’s why it is so important to address this.
Wrapping it Up
So, there you have it! These 6 essential factors make a significant difference in the overall success of your ad campaigns. Here they are one more time!
1. Website Conversion Rate
2. Traffic Quality
3. Offer
4. Creative
5. Average Order Value
6. Inventory
Before you decide to financially invest in ads, take into consideration each of these areas and how you may be able to ensure that they will not be an obstacle in your ad campaigns. Whether it’s improving your creative ad design, testing offers or enhancing your traffic quality, there are several ways you can make developments to help you get the most out of your ad spend.
So, after all that how are you feeling? Ready to tackle the next step in learning more about Facebook and Instagram ad campaigns?! Keep an eye out for our next post on…drum roll, please… Prepping your website for all the traffic your ad campaigns will generate!
If you want to see how we can help you in the process, go ahead and schedule a strategy call! Let’s discuss what would be a good next step for you in scaling your e-commerce business!
