Facebook ads are incredibly powerful. If you put in the time and effort to do them right, they can give you unbelievable growth. If you do them wrong, they could destroy you. So pay attention.
The first ever Facebook ad I created was a complete failure. I thought I was being so clever. I had created a banner for one of my products in Photoshop and then set up a bunch of different ad groups to test a variety of audiences. I was going to A/B test different interests, locations, ages and genders as well as ad copy and I was certain I was going to find the perfect audience that would spend all their money on my products. I felt that it was such a genius plan that there was no way it could fail.
I launched my ads and the data started coming in. After just a couple of days, I could see that certain ad copy was performing better than others. I switched off the poor performers and reallocated the budget to the top performers. Then I noticed that some of the interest groups weren’t converting at all. Gone. Next was the age groups.
Gradually I began to see better and better results. My CPA was going down with every adjustment.
This basic principle of A/B testing, refining and reallocating budget is great. It’s exactly what you should do with almost anything in marketing.
But even though I was taking this scientific approach, my ingenius plan was failing.
You see, once I’d finished refining as much as I possibly could, I still wasn’t generating a positiive ROI. I was losing money. This certainly wasn’t in my plan.
Why was I losing so much money?
I honestly didn’t know the answer and it took me several more attempts to figure it out.
Jump to Section:
The Key To Success With Facebook Ads
So here it is – the most important thing you need to know about Facebook ads:
It is almost impossible to generate a positive ROI from one ad alone.
What does that mean? It means you can’t take a completely cold lead from Facebook, send them to a product page and expect to convert them at a reasonable price.
Sure, you’re always going to hear stories of someone that placed a product ad on Facebook and generated a tonne of profit, but the odds of that happening are next to none. By all means, go ahead. Test it out. You’d be foolish not to. But once you’ve thrown a couple of thousand bucks down the drain, it’s time to get smart.
The key to succeeding with Facebook ads is building a complex network of ads, each with a micro objective to help push the user through your funnel.
Marketing Funnels Are ‘Holey’ Funnels
Picture it like this:
When we talk about funnels in sales and marketing, we’re actually talking about a special kind of funnel.
In fact, if we compare them to a real funnel – you know, the kind of funnel you would use to pour jam into into a jar – then they’re actually really badly made.
With a real funnel you shouldn’t have any spillages at all. All of the jam that you pour into the funnel should end up in the jar – except for the stuff that sticks to the sides of the funnel but you can just lick that off.
A marketing funnel, however, has lots of holes in the side of it. I know right?! What a stupid design. But it’s true. Most of the jam is going to fall through the holes.
I cannot stress how important it is that you understand this. The reason for its importance will become clear in a moment.
See our blog post on “The Ultimate Guide to Online Marketing Funnels” to learn some fundamentals about the different stages of a marketing funnel.
How to Find Opportunity in the Holes of Your Funnel
If you create a product ad on Facebook and expect cold traffic to convert, that’s like expecting all of the jam to somehow miss the holes in your funnel. It’s not going to happen!
So, what would be the smart thing to do?
Let’s take our jam jar analogy a little further here. Stick with me on this – no pun intended.
Imagine what would happen if we put our jam jar in a saucepan. When we pour our jam through the funnel and it falls through some of the holes, we catch it in the bottom of the pan. We can now take this jam (which we would have otherwise lost) and use it again.
Putting the jar inside a saucepan is exactly what we have to do with our Facebook ads! It’s the equivelant of building custom audiences.
Custom audiences allow us to retarget leads who have clicked on our ads but haven’t yet converted.
But this isnt a post about remarketing. The next piece of the puzzle is where it all comes together.
Racking the Shotgun to Find Your Perfect Audience
Perry Marshall coined the term, “racking the shotgun” in his book, 80/20 Sales and Marketing. The concept perfectly describes what we need to do in order to succeed with our Facebook ads.
In the book, Perry describes the story of his friend John Paul Mendocha. Aged 17, he dropped out of highschool and when to Vegas to become a professional gambler.
He soon met a seasoned gambler named Rob who agreed to mentor him in exchange for a split of the proceeds.
One of their early conversations went a little something like this:
“Son, the first lesson about gambling is, you have to play games you can win. You need to play people who are not as good at poker as you are. Those people are called marks.”
“How do I find marks?”
“Get in the car John, I’m gonna show you something.”
Rob took John to a cabaret full of beautiful women, alcohol and excitement. They sat down and Rob proceeded to pull out a sawn-off shotgun underneath the table. He pressed the leaver, doubling the barrel and opening the chamber, as if to load it. Without inserting any shells into the gun he snaps it back shut, making that ratcheting sound shotguns are famous for – what enthusiasts call “racking the shotgun.”
A few heads in the crowd quickly looked around, trying to see where the racking sound had come from. Everyone else was oblivious, absorbed in their haze of nightclub revelry.
Bill, the owner of the club, came over to their table. He asked Rob, with a tone of concern: “Everything OK over here, boys?”
“Everything’s fine, Bill. Just teaching the lad a lesson,” Rob replied.
Then he leaned over and said to John, “John, did you see those people who turned around? Those guys are NOT marks. Don’t play poker with them.”
John, your job is to play poker with everybody else.”
That, my friend, is how you filter out your target audience; you rack the shotgun.
Using Facebook Ads to Rack the Shotgun and Fill Your Jam Jar
So, let’s try and pull this whole thing together.
How does “racking the shotgun” and a “holey funnel” have anything to do with each other?
Well… it’s quite simple really. First we need to rack the shotgun to find out who our ‘marks’ are. In this case, the people that turn their heads to our shotgun noise are actually the ones we want to target.
Then we can pour those ‘marks’ through our funnel. BUT. We have to remember that it’s got holes in it. Thats why we place our saucepan underneath in step 2.
Let’s see how it works in Facebook:
1. Build Ad Campaigns to Filter Your Target Audience
Our goal with Facebook ads is to find leads and ultimately generate sales. But there are over 2 billion active users on Facebook. How are we possibly going to find the right people for our product?
It’s simple. We have to filter them out. We can do this by displaying ads to a somewhat general audience. Maybe an audience based on a certain interest, or a geographic location.
This usually works best with content that addresses an issue that your target audience may have.
For example, if your product is extra-thick woollen socks, you might advertise a blog article on “5 ways to keep your toes warm in the winter.”
The overwhelming majority of our audience is not even going to click on our ad. Good! We don’t want them to. If their attention isn’t caught by our ad then they’re probably not going to be right for us.
But if they do click on our ad, we know that they’re likely to be someone that suffers with getting cold toes and so they’re going to be a perfect person to market our extra-think woollen socks to.
This step is the equivelant of our racking the shotgun analogy.
Remember, the objective of this campaign is not to get sales. You may get one or two from it anyway but you must remember that your investment here is to filter out your ‘marks.’
2. Create a Custom Audience For Your ‘Marks’
By now people are flowing through to your content page on your website. But we’ve got to remember that our funnel has holes in it. Hardly any of those people are going to end up purchasing anything… this time round. 😉
A few peolpe will make it into the jar (end up buying something) but we’ve got to make sure our saucepan is underneath to catch people that fall through the gaps.
We do this by creating custom audiences.
Assuming we’ve got our pixel set up correctly, we can create a custom audience with the following conditions:
- Has visited our content page
- Has not visited any product pages
- Has not visited the order confirmation page
3. Retarget Your Custom Audience
Now all we have to do is take the saucepan and pour the jam back into the funnel. Just make sure to place another saucepan underneath the jar before you do 😉
We can do this by creating a new retargeting campaign in Facebook. We set our campaign objective to either conversions or traffic and then we select our new custom audience form step 2 in the Ad Set level.
You can test videos, banners, FB Messenger ads… whatever you want. But now the objective is to get people interested in the product, not just content.
4. Retarget, Again
Create a new audience for all of those people who visit the product page but don’t end up buying something.
Retarget them with an ad for the product they expressed interesting – Try out dynamic ads here 😉
Test out offing a discount at this point. Just be sure to monitor your results.
5. Retarget, Again and Again and Again
Set up as many retargeting ads as you can so that you know that you’ve got everyone covered as they go through the funnel.
Then you can rest easy at night, knowing you’ve got everything taken care of.
Try out different types of ads. You can use video ads, messenger ads, lead gen ads… there are so many things for you to try!
Got any video material lying around?
Here’s another one for you to try in your own time. For step one – our “racking the shotgun” ad – try using video instead of blog content.
If you have, or can create, an engaging video that on the subject of your product but not about your product itself you might just have the best shotgun rack opportunity available.
Create an ad with the video and test out all kinds of different audiences based on interests, location, age, gender, etc. and then create a custom audience based on video engagement.
Note: This is a relatively new feature on FB but it’s absolutely amazing when used right.
When you’re setting up a custom audience, select engagement as the basis of your audience:
Then select video as the source of engagement:
Now you can select the video from your ad and create an audience based on the amount of the video people actually stuck around to watch!
Those that didn’t watch more than 50% failed the shotgun test. They’re gone and we want nothing more to do with them. But those that DID watch more than 50%, they’ve just become our new marks so we can add them to this new custom audience and retarget them with more product-relevant ads.
GIve it a go and let us know how you get on!