Facebook ads are essential for every ecommerce company and this guide will help you get started running profitable campaigns.

In the past year alone, Facebook ads have changed a lot and will continue to change and be updated in the future.

This guide was just recently updated in 2020 to include the latest strategies and tactics that are working for ecommerce brands today. And we’ll continue to update it as things change.

We’ll start from the very beginning from installing a Facebook Pixel all the way through scaling and automating campaigns. Feel free to skip ahead if you’ve got the foundations covered.

Implementing the Facebook Pixel

The first thing you have to do is install the Facebook Pixel. The Pixel is just an HTML tag you put on your store’s website. In a nutshell, the Pixel will capture the Facebook profiles of people who are visiting your store.

This is how you’ll be able to run ads to people on Facebook who have visited your store before and even based on whether they completed an action or not (for example, added an item to the cart but didn’t purchase).

How to install the Facebook Pixel

The Pixel is super easy to install. If you’re using Shopify or your ecommerce platform has an integration, you can create and install a pixel in just a few minutes.

Install via integration

First, you’ll need to have a Facebook ads account. And if you don’t have a pixel already, you will need to create a Pixel from inside the Facebook Ads Manager.

All ecommerce platforms are slightly different with how you integrate/connect/install your Pixel, but here’s how simple it is with Shopify.

  1. Copy your Facebook Pixel ID from the Facebook Ads Manager
  2. Log in to your Shopify Admin panel and go to Online Store > Settings
  3. Scroll down to the “Facebook Pixel” section and simply paste your Facebook Pixel ID into the text box.
  4. Click “Save.”

And that’s it! What’s great about installing a Pixel through Shopify’s integration, is all the standard Pixel events are all done for you. That means you’ll be able to use the following events to build your Facebook ad audiences.

Event name Event description
ViewContent When a visitor views a page, for example a product page
Search When a visitor makes a search
AddToCart When a visitor adds a product to the shopping cart
InitiateCheckout When a visitor clicks on the checkout button
AddPaymentInfo When a visitor enters payment information in the checkout
Purchase When a customer completes a purchase and views the thank you page in the checkout

Install via HTML

If you’re not using Shopify or an ecommerce platform that has an integration for the Facebook Pixel, you can easily follow these instructions from Facebook to get your Pixel installed.

It’s basically a small HTML snippet that you paste into your website’s footer.

Double-check your Facebook Pixel is working

If you’ve installed your Pixel through an integration, you can be reasonably confident your Pixel is working correctly (as long as you’ve connected the right Facebook Pixel ID).

However, you must double-check it’s working as intended. The best way to do this is to install the Facebook Pixel Helper browser extension.

Once you install it, all you have to load is to go to your website, click and the extension, and it will check and confirm Facebook is receiving your Pixel and your events properly. If there is an error, the extension will tell you, which is helpful when diagnosing issues.

I can’t stress enough how important it is to make sure your Pixel is working. The success of your Facebook ad campaigns depends on receiving purchasing and other event data correctly.

The best Facebook ad audiences for ecommerce

One of the best parts about advertising on Facebook is the level of targeting you can drill down to with your ad campaigns.

Four types of audiences to test

After the Facebook Pixel has collected enough data (around 30 days worth depending on how much traffic you get), you’ll be able to build audiences using the data the Pixel has collected. These audiences are called “website custom audiences.” These are your people who visited your website, viewed a product page, added an item to the cart, and purchasers.

Another valuable type of custom audience you will often use is called “custom audiences from a customer list.” You can upload a spreadsheet (a .CSV file) to the Facebook Ads Manager with your customer names, email, and phone number (if you collect it) and Facebook will attempt to match your customer data to Facebook profiles to create an audience for you. This is a great tool if you just recently installed the Facebook Pixel and you want a bigger audience size.

Depending on your audience size and how much budget for ads you have, you may want to explore lookalike audiences. You can create an audience, say an audience of customers through pixel events or a list upload, and tell Facebook I want more users like these. Facebook then uses an algorithm to find commonalities in the users in that audience to find similar people you can run ads to. These are called lookalike audiences and it’s one of the most powerful features of Facebook ads.

The fourth type of common type of audience is what Facebook call “saved audiences.” Saved audiences are audiences built using standard Facebook data like demographics, interests, people who follow your page, etc. This is another great way to build large audiences who may be interested in your band. You can use Facebook Audience Insights to figure out the right interests and demographics to use for your business.

The hierarchy of audiences we recommend

Each audience will need a different approach in the types of ads you target them with based on where they are in the buying cycle.

Typically, advertisers break the buying cycle down into three levels:

  1. Top of funnel (ToF) - people who don’t know your brand or explicitly expressed a need for your product, also referred to as cold audiences
  2. Middle of funnel (MoF) - people who are familiar with your brand and what your product does, but haven’t bought before or very recently, also referred to as warm audiences
  3. Bottom of funnel (BoF) - people who are ready to buy a product like yours and may have bought a product from you recently, also referred to as hot audiences

Here’s how I’d recommend prioritizing the audiences you test based on expected return-on-ad-spend (ROAS) and the type of ads you should target them with.

Priority Facebook audience Type of ads
1 Retarget previous purchasers BoF
2 Retarget cart abandoners BoF
3 Retarget product page viewers BoF
4 Retarget blog/content viewers MoF
5 Lookalike audience from purchasers ToF
6 Interest in product category ToF

What types of ads should you target for each stage of the funnel? Read on!

The best Facebook ads for ecommerce

After getting your audiences right, ad creatives are the single most important thing to get right when running Facebook ads for ecommerce companies.

How do you get right? Constantly test new ideas. Here’s what’s working.

Bottom of funnel Facebook ads for ecommerce

Previous purchasers, cart abandoners, and even product-page viewers who didn’t buy are the most likely audiences to purchase an item directly from a Facebook ad - meaning, these audiences will have the best ROAS. Here are the best types of ads to run:

Dynamic product ads

The first type of ads you should set up that also happen to require the least amount of effort are dynamic product ads (DPAs). DPAs are essentially automated ads from your product catalog created through your ecommerce store’s product feed. Once you integrate your product feed with the Facebook Ads Manager, Facebook can automatically create ads using your products’ image, title, description, and price. It can even advertise a product the people have previously viewed before.

The easiest way to set up DPAs is if your ecommerce platform supports a product feed integration with Facebook ads. If you’re using Shopify, you can use one of their apps, like Flexify, to integrate your product feed without any hassle. To add a product feed manually, you can go to Catalogs in the Facebook Business Settings.

Once you’ve created a catalog with your product feed, you can create a new campaign with the objective Catalog sales, which will allow you to use your catalog as ads. Here’s an example of an ad created from a store’s product feed:

We continue to see DPAs be a very effective strategy for ecommerce advertisers in 2020.

Video ads

Video ads have been and continue to be one of the most effective types of ads. But not just any video will cut it, it has to be a compelling video.

What is a compelling video? One that tells a story of solving a pain. Advertisers have been extremely creative with how they tell their stories through video ads, but there’s one style of video ads that have really become popular with advertisers this year: user-generated content (UGC).

UGC ads are (typically) video ads fully composed or at least contain a video testimonial from a customer. UGC ads work because they are authentic and give prospective customers trust that they will love their purchase. UGC ads are especially powerful when the testimonial is from an influencer.

Here’s an example of multiple testimonials cut with product call-to-actions in this UGC ad:

View the ad's video

The other type of ads we’re seeing be really effective in 2020 are carousel ads. Similar to DPAs, which can also be a carousel-style ad, carousel ads can be customized so you can nail the messaging for specific audiences and products.

When making a carousel ad, you have complete control over each image (or video) and all the ad copy. This lets you get really creative to capture people’s attention as they scroll through their news feeds.

Here’s an example of a commonly used visual cue to encourage Facebook users to swipe through the carousel by continuing one image to the next. Not only are these effective at getting Facebook users to engage, but it does also count as an ad engagement, improving your ad’s engagement score. And higher engagement scores lead to lower ad costs because it tells Facebook their users are enjoying your ad.

Middle of funnel Facebook ads for ecommerce

Warm audiences who may know about your brand and product require a slightly different approach. Although you might want to test DPAs to your MoF audiences, they may not be the most cost effective style of ads, because DPAs really only serve as a reminder to buy.

Since warm audiences aren’t necessarily ready to buy, ads to MoF audiences need to be convincing. The best format for these ads are video and carousel ads as explained above, which you can craft to tell a convincing story about why people should care.

Short looping videos

Another option are short videos (fifteen seconds and less), which will automatically loop. This is great when you only have an image, because with simple effects you can turn it into an eye-catching, looping video. This ad by Magic Spoon Cereal has animated text that flashes benefits like “zero sugar cereal” and “high protein cereal.” This is a great example of showing why people should care.

View the ad's video

Show off different use cases

Maybe the messaging and idea your potential customers see in your product just isn’t clicking right with them. Take the opportunity in your ads to show off different use cases so more people have a chance to “get it.” In this ad, Honey shows how it can be used not just for online shopping but also online food ordering.

View the ad's video

Top of funnel Facebook ads for ecommerce

The goal when running ads targeted to cold audiences is not to convert directly to sales. It would be a devastatingly poor performing campaign. Because they’re cold audiences, the ROAS won’t be as high as BoF campaigns and that’s why you should exhaust your BoF and MoF audiences before allocating any budget to ToF audiences.

Your strategy should be to get people to click through your ad so they land on your website. This accomplishes two objectives: 1) to get them familiar with your brand, and 2) pixel them for less expensive retargeting. In other words, the goal is to pull people up into the MoF. Here’s an idea for ads.

Tell your customer’s story

In this ad from Moleskin, they’re showing the lifestyle of their customer archetype - a creative, a thinker, a modern classic. In just 13 seconds, this ad shows how Moleskin products are integrated into the everyday life of this person. And Moleskin wants you to imagine how their products can integrate into your life, too. If you see yourself as a creative and a thinker, then Moleskin is for you. This can also be an effective approach for warm audiences, too.

View the ad's video

An important caveat: The styles and formats of the ads you use in each stage of the funnel is less important than the message that’s conveyed in them. The above are just examples to help you get started on the right path.

Where to get Facebook ad inspiration

Because the ad creative is the most important aspect of whether an ad will be effective or not, it’s important to always test new creative ideas. To help make the creative process easier, you need to always be on the lookout for interesting approaches other companies are doing. Here’s two ways to do that.

Look at your competitors’ ads

Did you know you can see all the ads any company is currently running? It’s a great idea to keep tabs on your competitors and snoop their ads to see what they are coming up with. This can be a great source of ad inspiration.

To see the ads of any company, go to their Facebook page and click “See More” in the Page Transparency box on the right sidebar.

And in the pop up box, there’s a section at the bottom title “Ads From This Page.” Click the “Go to Ad Library” link and from there you can see all the ads a company is running.

From the Facebook Ad Library, you can search any brand name and see the ads they’re running.

Join Facebook ad groups

If you aren’t already connected to other advertisers or ecommerce store owners in Facebook groups, you’re missing out on a great opportunity to bounce ideas off each other.

If you’re not in a group already, I recommend joining Facebook Ads Creatives Only created by Savannah Sanchez, a media buying expert who specializes in ecommerce growth. This group is only about sharing interesting ads people come across in their newsfeed and is an excellent source to get your creative juices flowing.

How to hack social proof

Once you find a good ad that works, did you know you can use that exact ad in other campaigns and ad sets? Instead of duplicating an ad or remaking the same ad in another campaign or ad set, you can grab the post ID of a successful ad with lots of likes, shares, and comments, and reuse that same exact ad keeping that engagement.

We continue to see this as a large part of Facebook ad strategies in 2020 and we wrote a whole post to learn how you can take advantage of this feature. This is how you sometimes see ads with a ton of engagement.

Strategies to scale Facebook ads for ecommerce

If you’ve already reached a break even point with your Facebook ads, or once you do, it’s time to think about how you can scale up your budget while improving your ROAS, or at the very minimum maintaining it.

Below are three primary ways to do this for ecommerce companies. For more details, read our full guide on how to scale Facebook ad campaigns.

Expand to more audiences

In the hierarchies of audiences we recommended above, make sure you create campaigns for those audiences in that order. Because you’re targeting BoF audiences, your ROAS target should be somewhere around 3.0, or in other words making $3 for every $1 you spend on ads. Once you get to a point where you can’t spend any more budget without seeing a decrease in ROAS, you can expand to the next audience in the hierarchy.

Take advantage of CBO campaigns

CBO stands for Campaign Budget Optimization - a new type of Facebook campaign. CBO campaigns are different than traditional Facebook campaigns because the budget is set at the campaign level, not at the ad set level. Facebook created an algorithm to efficiently manage how much budget is allocated to each ad set within a CBO campaign and many ecommerce advertisers have reported success with it. If you’re struggling with improving ROAS, give CBO campaigns a test.

Use Facebook automated rules

You can use Facebook automated rules to automate most of your day-to-day ad management routine. This can concentrate your focus toward activities where your expertise is actually needed, like making new ad creatives and finding new audiences, while having automated rules do most of the work.

Automated rules are essentially “if ‘this’ then ‘that’ statements” with your Facebook ads. For example, you can create an automated rule to pause an ad if the ad’s average ROAS over the last few days drops below 1.0.

In fact at Revealbot, we help advertisers create the exact rules they need to run fully-automated campaigns - just add new ad creatives into the system and automation does the rest. For even more details on how to set this up, check out our Facebook ads automation guide.

Here are three essential automated rules we recommend to get started. The conditions, or the “if this” part of the rule, can be adjusted to fit how you manage your campaigns and the products you’re selling.

Automatically pause underperforming ads

Pause ad if
Spend > $50 and Purchases > 0

Automatically increase budget on well performing ad sets

Increase budget by 20% once a day if
Purchases > 5 and Cost per Purchase < $20

Automatically decrease budget on poor performing ad sets

Decrease budget by 20% once a day if
Purchases > 5 and Cost per Purchase > $20

Conclusion

Facebook ads is an incredible tool for ecommerce companies when done right. Once you install the pixel, understand the best audiences to target, and make the right ads for those audiences, it’s a match made in heaven. Add automation on top of that and you’ll be well on your way to scaling profitable Facebook ad campaigns. For more information on ecommerce growth strategies outside of Facebook ads, check out Hawke's guide on creating a basic digital marketing strategy for ecommerce.