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How To Determine The Budget For Paid Ads Campaigns

One of the most discussed, yet misunderstood, aspects of launching a paid campaign is its budget. Not setting realistic projections for a marketing plan can destroy a business.

Imagine

A small e-commerce brand making $50k per month has the goal of scaling to $150k per month with paid advertising. The internal team runs with their gut feeling, believing they could achieve the additional $100k in revenue by spending $30k per month on ads.

However, had they referenced existing data to set an accurate projection, they would have discovered their average Return On Ad Spend (ROAS) was only 2x. In order to achieve an additional $100k in revenue from the planned $30k, they would have to build a plan to improve their marketing performance to achieve a 3.3x ROAS. Using historical averages, this revenue increase would require $50k instead of the original $30k projection.

By using historical averages, they gain the ability to better predict future outcomes. Once a brand understands its existing data, making a plan for growing and expanding is easier. We’ve observed many ways that brands determine the required investment for their marketing efforts, but today we’re going to dive into our own method to help you set accurate projections and set realistic KPIs.

Knowing Your Campaign and Industry Averages

If you’ve never run ads and are looking to start, then projecting your marketing performance can be difficult if you don’t know where to look. Thankfully, there are many resources available to provide you with some of the basics to have a window into how your campaigns could perform. To provide a window into how your campaigns could perform, we’ve created a graphic based on data we’ve gathered from third-parties and our clients’ performance over the past few years.

NOTE: To get the most out of the graphics below, use the data as an indicator of how average brands perform within particular industries. This will ensure you don’t set unrealistic expectations for your current product, content, offer, etc.

Average Cost Per Action (CPA) metrics by industry
Average Cost Per Click (CPC) metrics by industry
Average Click-Through Rate (CTR) metrics by industry
Average Conversion Rate (CVR) metrics by industry

Now let’s leverage this data to set growth projections and targets. Below is a list of metrics we’ll need to pull from industry data and our historical account averages:

  • Planned Monthly Budget
  • Cost Per 1k Impressions
  • Click-Through Rate
  • Website Conversion Rate (From Ads)
  • Average Cost Per Purchase
  • Required Return On Ad Spend
  • Average Order Value

Setting Goals And Understanding Your Data

The most common goals when growing a business are Gross Revenue and increasing the Average Order Value (AOV) of first-time customers. These goals can be directly influenced by paid marketing performance — especially with cold traffic targeting.

Cold traffic is the most expensive and difficult audience to convert. Improving the cost of turning cold traffic into revenue is one of the most powerful optimizations you can make to your ad campaigns.

To set these goals, start by determining your current averages and how much they’ve changed over the last few months, quarters, and/or years. Doing so will help you understand how your business is changing and where you can improve. 

You might find that your business is growing by 12% annually, but new executives want to aim for a 20% growth rate in the upcoming fiscal year. By comparing campaign performance to growth goals, you can begin to understand the difference between targets, realistic goals and what levers you need to pull to reach them.

Example

Let’s use the goal above as an example in our projections:

Current Averages

  • $50,000 Monthly Recurring Revenue (MRR)
  • $50 Average Order Value (AOV)
  • $12,000 Current Ad Spend

Growth Goals

If the company is looking to grow by 20%, then we have two levers we can play with to reach that goal:

  1. Improving the customers’ Average Order Value, which increases ROI on every customer engagement.
  2. Focus on reinvestment, increase spending, and convert more customers at the current rate.

Average Order Value Focus

In the example below is focused on the kind of performance targets that you’d set for a business if 

  • $60,000 MRR (20% increase in revenue)
  • $60 AOV (20% increase)
  • $12,000 (Maintain current ad spend)
  • The High-Level Breakdown:
    • 60k (MRR) / $60 (AOV) = 1000
    • $12,000 (ad spend) / 1000 (monthly orders) = $12 CPA
    • $60 AOV / $12 CPA = 5x ROAS

Ad Spend Scaling Focus

  • $60,000 MRR (20% increase in revenue)
  • $50 AOV (maintain current performance)
  • $14,400 (scaling ad spend by 20%)
  • The High Level Breakdown:
    • $60k (MRR) / $50 (AOV) = 1200
    • $14.4k (ad spend) / 1200 (monthly orders) = $12 CPA
    • $50 AOV / $12 CPA = 4.16x ROAS

Lead in copy into the option to focus on both

Average Order Value + Scaling Focus (Hybrid Model)

  • $60,000 MRR (20%+ increase in revenue)
  • $55 AOV (increase AOV by 10%)
  • $14,400 (scaling ad spend by 20%)
  • The Projection Breakdown:
    • $14,400 Ad Spend / $12 AVG CPA = $1200
    • 1200 monthly orders x $55 Average Order Value = $66000
    • $66,000 potential performance / $60,000 growth goal = 9.09% or a 29.09% increase in monthly income

There are many ways to use your campaign data and goals to ensure you have the right plan in place. In the example above, if we’re able to make just a few slight adjustments to our AOV and maintain performance as we scale our campaigns, we’ll outperform our internal goals. Even better, by making small adjustments to both levers, we greatly increase the likelihood of reaching the initial goal if the market changes.

Putting It All Together

Let’s take all of the metrics we’ve covered and run them through a calculator. Remember, the goal is to determine realistic projections for campaigns.

Example Metric Averages

  • Planned Monthly Budget = $25,030
  • Cost Per 1k Impressions = $14
  • Click-Through Rate = 2.54%
  • Website Conversion Rate (From Ads) = 4.43%
  • Average Cost Per Purchase = $16
  • Required Return On Ad Spend = 2x
  • Average Order Value = $35

Once we’ve received campaign data, we compare current performance to what we’d have if we could reach a goal metric — like seeing how much we’d increase sales by improving content quality that drives a higher CTR of 3.30% instead of 2.54%.

We use this calculator to project the performance of campaigns needed to reach our goals. For example, if our client’s looking to generate $600k from paid ads this year but doesn’t know the cost or projected profitability, using the calculator is a great place to start.

A visual representation

By using data from past campaign performance, we’re able to project our daily, monthly, and annual performance. While these numbers are never going to have 100% precision, they can help you determine if your goals are realistic.

So before you start a new campaign or try to meet an unchecked annual performance goal, be sure to create projections first using historical data. This will give you the clarity and confidence needed to make intelligent business decisions.

Try the calculator tool.

Creating Content for Each Stage of the Paid Ads Funnel

For just a moment, imagine you’ve recently created a brand selling smartphones — competition is fierce, and few (if any) people have heard of you. Your potential customers are currently iPhone or Android users, but in order for you to gain market share, you must convince them to switch. It won’t be easy, and it might even take multiple attempts — after all, humans are creatures of habit, and we don’t like to veer from comfort until we’re confident in our decisions.

Okay, you might be asking, “What does selling smartphones have to do with paid ads?”

Well, similar to paid ads, in order to convince someone to switch from their preferred product or brand, you might take a multi-step approach. 

The first thing you’d need to do is let them know you exist — to educate them about your brand, what it is that you offer, and that they have another option. Then, you might show them how other people use your brand’s smartphone to achieve their goals: whether for work, art, or play. Lastly, you might demonstrate how your phones are better than iPhone or Android (really, your products are extraordinary).

This tiered strategy is how we approach paid advertising, and it starts with the Top of Funnel.

Top Of Funnel

Your Top of Funnel (TOF) is cold traffic — this audience has never engaged with your brand and they have never seen or heard about your product or service. We usually spend 60-70% of ad budgets capturing qualified TOF traffic, as the long-term success of the next funnel stages rely on delivering relevant content to this audience.

Since cold traffic still requires education about your product, your paid ads should reflect this.

Educate your audience about your brand, product and service. While the goal of any ad campaign is to drive sales, your cold traffic is the least likely to convert — at this stage of the funnel, your focus should be on brand education.

Pique your audience’s interest enough to send them to a landing or product page, where you can discuss your offer more in depth. This will set your retargeting campaigns, the next stages of the funnel, for success.

To learn more about determining audiences for Top of Funnel, we’ve outlined some strategies to help you get started.

Middle Of Funnel

Your Middle of Funnel (MOF) traffic has not attempted to make a purchase, but they may have liked your social page, commented, or followed you. They have not necessarily been to your website — we think of this as a social re-engagement opportunity.

Middle of Funnel and Bottom of Funnel (BOF) creatives should be a mixture of User Generated Content (videos and images from your customers) and trust-building content you have created.

MOF copy should be product-focused, addressing how your product or service can address a person’s need or problem. Testimonials or reviews perform well at this stage.

While there are a variety of content types to use for Middle of Funnel, the objective should always be to re-engage TOF traffic.

Bottom Of Funnel

BOF, or hot traffic, are your most qualified leads — those closest to making a purchase (some may even be returning customers). Your BOF has engaged with your website, though they haven’t necessarily attempted to make a purchase.

This is your best retargeting opportunity.

These campaigns should include essential creatives to encourage users to return and purchase. Ad copy can be more direct about your product, and your language can reflect that a person understands your brand.

Showing your product in use or discussing why it is superior to competitors is more effective at this stage than with cold traffic, as your audience should now be educated about your brand.

How the Stages Work Together to Achieve Success

Creating content for each stage enables brands to speak to their audience in ways that are relevant to their current experience and level of knowledge. By taking this 3-tiered approach, you are assuring your campaigns have the best chance for long-term, sustainable growth.

By following this process, you will create more qualified leads, more efficiently spend your ad budget, and provide consumers with a better user experience and more relevant content to make more educated purchases.

The 11 holidays to leverage for growing your e-commerce brand

Holidays are some of the best opportunities for brands to turn visitors into long term customers — unfortunately, most brands miss out because of a lack of planning. To help, we’ve outlined some of the most important US holidays to consider when creating a marketing plan, as well as a few tactics to best leverage these days.

Why Holiday Sales Are Great For Brands

People search for things to buy during the holidays. This creates a unique opportunity for your brand to connect with new users that are more open to trying new products. Even better: you can test different offers and angles on cold traffic to see which offers prove most enticing.

What Sales Should We Offer?

The best sales are straightforward; the most popular are sitewide sales and product bundles. If you offer a sitewide sale, A/B test callouts for specific percentages off and the total potential savings — you might find that your customers respond better to one.

Example 

Percentage Savings

“Save 20% site-wide through November 21st!”

Dollar Savings 

“Now through November 21st, save up to $75 on your order!”

What Holidays Should Have Sales?

Below are the top US holidays in 2021 we recommend including in your marketing plan to capture more sales, develop timeless brand awareness, and keep relevant with your customers. While this list isn’t exhaustive, it provides a foundation for your annual marketing plan to ensure you’re ready for the most popular holidays.

  1. New Year’s Day: January 1st
  2. Memorial Day: May 31st
  3. Independence Day: July 4th
  4. Labor Day: September 6th
  5. Veterans Day: November 11th
  6. Thanksgiving: November 25th
  7. Black Friday: November 26th
  8. Cyber Weekend: Nov 27-28th
  9. Cyber Monday: November 29th
  10. Christmas Day: December 25th
  11. New Year’s Eve: December 31st

Special holidays for your product or industry

In addition to the 11 national holidays we’ve listed, there are an ever-growing number of industry-specific holidays celebrated across social media: National Ice Cream Day, World Pharmacist Day, Houseplant Appreciation Day, Pie Day (not to be confused with Pi Day) — if there’s an industry for it, there’s probably a day for it.

These “holidays” can be especially effective because brands compete on a smaller scale — against other ice cream brands prepared with an advertising strategy, for instance. It can also be easier to get people excited about your product on an otherwise ordinary day.

In many instances, there can even be an opportunity to become an organizer or leader within a community/vertical for that given holiday — especially for small businesses.

Our recommendation: prepare an ad strategy for any “holidays” celebrating your products.

How expensive are paid ads during the holidays?

Year-end holidays are some of the most expensive times to run paid ads. While this shouldn’t deter you from continuing to grow, a 20-35% cost increase from historical averages is typical during November and December.

When you’re building your annual marketing plan, you’re identifying new ways to grow. Remember to look at the holidays that best relate to your brand and add them to the schedule. It might be the next best way for you to add a new stream to your brand’s annual revenue.

The 5 Core Stages Of The Buying Cycle

Identifying and developing the right content for your campaigns is a challenging task. If you push the wrong content to your viewers at the wrong time, you risk sending the wrong message and missing out on potential sales. We’ve helped hundreds of brands grow with paid ads and have developed a simple, go-to list to identify which content is best for each stage of the buying cycle and turning ad viewers into customers.

Before we dive into the best types of content for each stage of the buying cycle, let’s discuss the cycle itself. 

When running ads, your customer flows through what is called a buying cycle. This buying cycle or customer journey is the process of starting as someone that doesn’t know about your brand or product to become a fan or first-time purchaser. 

Understanding the buyer’s journey improves your ability to push the right content to them at the right time, increasing the likelihood of generating a sale. Below is an overview of the five places we should be targeting our customers with ads to drive sales.

  1. Cold Traffic (no engagement with the brand) 
    • People that have never seen or heard about the product/service
  2. Social Engagement (no website action)
    • Liked social page, commented, follows you but has never been to the website
  3. Website Engagement (no attempt to purchase action)
    • Been to the website but hasn’t attempted to purchase or convert
  4. Attempt To Purchase Action (no checkout)
    • A person has attempted to purchase but did not complete 
  5. Post Purchase (value add)
    • People that have made at least one purchase with you

Finding Winning Content for Each Stage

The 5 stages of the buyer’s journey are the foundation for successful campaigns, providing the roadmap for your ad copy and creatives. 

One of the keys to building winning campaigns is to test everything. Once you’ve found that a creative performs well at one stage of the funnel, don’t be afraid to test it at a different stage to see if it succeeds elsewhere.

Middle of Funnel (MOF) and Bottom of Funnel (BOF) creatives should be a mixture of User Generated Content (videos and images from your customers), trust-building content you have created, and for the Bottom of Funnel, essential creatives to encourage users to return and purchase again.

10 Middle of Funnel Content Types You Should Be Using

1. Unboxing Videos

Show how the product gets delivered, showcase the branding experience, and show and discuss the product.

  • Excellent for every stage of the buying cycle
  • For colder audiences, the best performing unboxing content is concise (10-15 seconds). When a customer has a deeper interest and understanding of your brand, longer videos can perform better (30-60 seconds).

2. Reaction Videos

Show people’s reactions to receiving the product themselves or as a gift. Capturing the excitement from these moments is super engaging content.

  • Excellent for every stage of the buying cycle
  • Great if you’re able to source quality user-generated content.
  • When creating reaction video ads, we recommend starting with a clear CTA in the first 3 seconds and not letting the full video exceed 30 seconds.

3. Competitor Review Videos

Compare your product to a competitor’s or discuss why your product is superior.

  • BOF winner (sometimes MOF)
  • An opportunity to demonstrate how your product is better and what makes your brand unique.
  • When developing product comparison videos, ensure you showcase your brand personality to be more relatable and keep the viewer’s attention.
  • Videos of this type are best between 30-90 seconds.

4. Product in Use Videos

Show different angles and features of the product in use.

  • Excellent for every stage of the buying cycle
  • Often 15-30 seconds and identify the core customer problem and how your product solves it.

5. Customer Collage Videos

A video that combines all the different elements above into one video, including short videos and photos from customers using a product.

  • MOF & BOF winner
  • Similar to reaction videos, mixing short clips of customers using the product adds credibility and trust in your brand. This is because a potential buyer sees other people just like them using your product and enjoying its benefits.
  • These types of videos are great at 15-30 seconds, providing enough depth without being too long.

6. Full Product Experience Videos

These videos are from a customer, showing them receiving the item, discussing the brand experience and why they purchased the product, what made them buy it, how it compares to competitors and what they love about it. They also demonstrate the product’s key features and benefits and how it solves their problem.

  • BOF winner
  • These videos work best when a customer has engaged with the brand multiple times. Given that these videos are much more in-depth than all other kinds of creatives, we need a customer to have a high interest in learning more.
  • Full product experience videos have shown to perform best when between 45-2 minutes long. 

7. Customer review videos

Videos from your customers talking about why they purchased your product, why they love it, and why others should buy it.

  • MOF & BOF WINNER
  • This content is the foundation of user-generated content and consistently provides the final encouragement needed to make a purchase.
  • The best review videos are 20-40 seconds.

8. Testimonial Videos

Videos from customers discussing how the product has helped them or made a difference in their lives and how it could benefit others.

  • MOF & BOF winner
  • Testimonial creatives show off your product and add trust in your brand. If your video testimonial is mixed with imagery, this often performs best.

9. Finish Checkout Creatives

Images or videos encouraging users to return to the website and finish checking out.

  • BOF Abandoned Cart winner
  • This is one of the few times being very direct generates a great return. When developing checkout creatives, we’ve found that the more straightforward you are with segmentation, the better it performs. If someone checked out a product but didn’t buy, then call it out and test different creatives to see which converts best.

10. “We miss you” creatives

These videos address in a creative way that we know a user has revisited a website but has not purchased — they encourage the user to return and make a purchase.

  • MOF & BOF winner
  • These creatives focus on the re-engagement of potential customers that have shown a high level of interest but haven’t taken any action in a while. This style of creative works well as an image or 6-10 second video that’s very direct. Since these viewers already understand your brand, you can be direct with creative.

By leveraging our paid advertising insights and strategies in creative development, we aim to provide you with a clear path to creating ads that massively impact your brand. If you’re able to implement a variation of each type of content outlined above, we’re confident that your ad performance will improve. 

How to Scale Winning Paid Ads Campaigns

Imagine

You’ve been running ad campaigns for your brand for a couple of weeks to test for winning variations: and you’ve found them. Now it’s time to scale — to take your winning campaigns and push them to more people for a greater return. 

But how do you get there? Do you simply add more spend to the budget? Turn off non-performing variations?

What’s our winning process?

Historically, we’ve struggled with this answer. After a lot of trial and error and learning from the best consultants in the media buying space, we’ve developed a framework that helps our partners grow with paid ads.

Before we start scaling, we run our ad sets for 3-5 days for accurate average results — Facebook tends to show better results in the first few days of running ads. While it’s good to see ads converting, don’t let this fool you! This is often where scaling begins and ends for brands; they see initial growth, then watch their campaigns slowly decline or stagnate.

We follow this process:

  1. Increase the ad budget for the Top Of Funnel / Cold Traffic campaign by 20-30% — some suggest as much as 50%, but we wouldn’t go so far. This provides a baseline of data and the highest likelihood of consistent performance during initial growth stages.
  2. After 2-4 days at the new ad spend with consistent results, duplicate the ad set, and push the budget 100% higher than the original.
  3. When implementing higher budgets, leverage manual bidding, and test multiple ad sets with 1x, 2x, 3x, and 4x the target CPA.
  4. Within the campaign, create an ad set with 5-10x the original budget.
  5. Because Facebook auction fluctuates daily, we need to determine what kind of manual bidding works best for our ad sets.
  6. Finally… Test, Test, Test. scaling a winning campaign involves a lot of trial and error! However, with the right mindset and the right team, it is possible.

Ad Budget Breakdown

We’ve tested numerous strategies when it comes to managing the ad spend for maximum results. Over the years we’ve found that splitting the ad spend using a 70/30 model where 70% of the ad spend is directed towards cold traffic and the other 30% is devoted towards re-targeting and engaging our existing audience.

Cold Traffic / Top Of Funnel: 70% Of Ad Spend

Middle Of Funnel: 15 – 20% of Ad Spend

Bottom Of Funnel: 10% – 15% Of Ad Spend

Taking some time to outline a detailed strategy that can maximize your scaling potential is essential when setting up these campaigns. Make an effort to develop a thoughtful strategy rooted in specific goals. This will make your efforts focused, efficient, and set for success.

How To Choose Audiences For Top Of Funnel

Cold traffic audiences are, without a doubt, the most difficult audiences to profitably convert with paid advertising. However, they’re usually the most important audiences you run ads to, even if your bottom of funnel audiences provide you with the greatest returns. If you’re not bringing new people into your funnel and building your pipeline, then your pool of potential customers at the bottom of the funnel will have diminishing returns.

We spend a lot of time building COLD traffic (i.e. Top of Funnel campaigns). Our Top of Funnel (TOF) campaigns usually spend 65-70% of the total budget on most accounts we manage.

Because so much ad spend is directed to cold traffic, it’s essential to choose the right audiences for your TOF campaigns.

Traffic quality is vital to your ad account’s overall performance. Since this traffic feeds into the Middle Of Funnel (MOF) and Bottom Of Funnel (BOF) campaigns, having the right audiences at the top will give your account the opportunity to perform well.


Tired Your Campaigns Being Unprofitable?

Learn the method we’ve used to help profitably grow and scale e-commerce brands to 6-7 figures online with paid advertising. Save time, money, and countless hours testing by following our scaling method.


To set up your top of funnel, evaluate your options and separate the available assets into 4 main categories:

1. Lookalike audiences (LLA) based on Custom Lists.

Custom Lists are not new. If your Facebook Pixel did not capture purchases, upload a CSV and create a lookalike audience.

PRO TIP: Export your customer list from your ecommerce platform (Shopify, BigCommerce, WooCommerce, etc.) and separate your customer data based on the amount of purchases they’ve made. Our favorite starting point is to segment people that have made only one purchase vs the people that have made 2+. We then take this data and upload the lists separately, then our final upload is both of those customer lists combined. This provides three solid audiences for testing and creating Lookalike Audiences from 1%-6%. Make sure not to remove the order value from the list so you can upload the Custom List with Life Time Value included.

Customer List #1 = People that have made only 1 purchase

Customer List #2 = People that have made more than 1 purchase

Customer List #3 = Everyone that has made a purchase

2. Lookalike audiences based on pixel events.

There are countless options and variations when creating lookalike audiences based on pixel events. The most common and available pixel events in ecommerce are PageView, ViewContent, Add to Cart, Initiate Checkout, Added Payment details, and Purchases. Before creating custom audiences based on these events, you’ll always want to check Events Manager for the total number of events fired on your website for each event. These numbers can help predict the potential audience size and whether to use them as lookalikes or not.

Regardless of the total number of events, we recommend creating custom audiences for 3 / 7 / 15 / 30 / 60 / 90 / 180 days. Even if you cannot use them as a source audience for lookalikes, they will come in handy for retargeting later on.

If the number of events on your website is significant or the site has several products or landing pages, it will allow you to create more advanced custom audiences, providing more valuable lookalike audiences. We aim for the custom audience size to be at least 500 (preferably 1000) to create a solid lookalike audience. 

Here are some of our favorite LLA combinations:

  • PageView Last 30 Days Frequency > 4
  • Site Visitor Top 5% Last 90 Days
  • Top 25% Most Engaged By Time On Site
  • Any specific product / category / pixel event –> View Content_url include: Product last 60 days
  • You can also exclude purchase value under a certain amount

PRO TIP: To do an advanced search or crosscheck the potential custom audience size, you can use Facebook Analytics. It will immediately show you the audience number, and you can adjust variables more easily than creating each custom audience in the Audiences tab. If you find a great combination, you can save the filter and build the audience right away.

3. Lookalike audiences based on Engagement.

This category could be called “lookalikes based on MOF audiences”. The source audience, in this case, is from custom audiences based on Facebook Page or Instagram account engagement.

Here are a few examples:

  • FB messages sent in the past 365 days –> LLA for a client where most of their orders came through Messenger
  • FB post engagement in the past 180 days
  • FB video watch time 50%+ last 90 days
  • IG saved post in the past 180 days
  • Facebook Page visitors in the past 60 days
  • FB all Engagement in the past 365 days

Note: We believe you should only use video viewers as a source audience for lookalikes if there is no other option available. The source audience that viewed your ad videos aren’t necessarily valuable customers. Creating a lookalike from these users might not provide much value — unless your objective is to find more engaging video viewers. 

There is, however, one scenario when video viewers can be valuable as a source audience: when you have organic converting traffic with long video viewing times from watching live videos or other content on your Facebook page — such as educational, how-to videos that are connected to your products or services.

4. Interest-based audiences

Even though we think we have a better success rate when starting with lookalike audiences for TOF campaigns, we also see success with interest-based audiences — especially when the product or brand has a precise market segmentation or personas. Aside from the product or niche interest groups, our usual process is to check the Audience Insights tab to find other things page visitors are interested in.

PRO TIP: When creating these audiences, our go-to process is to combine broad audiences with interests. We leave demographic attributes open and select 1-1 main interest only, which usually results in a massive 5M+ audience. 

Example: We target people in the USA with an interest in Crossfit, excluding our website visitors in the last 180 days.

Once you’ve analyzed the four categories above, choose 5-8 audiences you believe are the most valuable for a splash of fresh traffic. There are a couple of things you should keep in mind when creating a TOF campaign with Campaign Budget Optimization (CBO) and choosing audiences:

If the audience sizes between ad sets vary significantly — for instance, one audience has an audience size of 70k and another with 10m — then the algorithms will likely push traffic to the ad set with a bigger audience.

If you choose LLAs based on the same sale funnel events each time, you’ll more than likely find that they overlap. This overlap limits the algorithm’s ability to test fresh traffic and find you more conversions.

Let’s say you create a 1% LLA based on:

  • Add to Cart last 180 days
  • Initiate Checkout last 180 days 
  • Purchase last 180 days 

On paper, these all look like valuable lookalikes — and they are, to a point. However, when you want to give the best chance for a TOF Campaign Budget Optimization (CBO) campaign, you might want to mix up your audience and try new directions.

1% lookalikes are a solid go-to and will likely be more valuable than 2% or 5%. But we’d still recommend testing different percentages on the same source audience, as they might give you surprising results. 

Before you expand to broader percentages, we recommend that the first TOF campaigns only use a 1% audience.

Scaling your brand online is a challenging task, but you can make the path to growth easier by following strategies to affordably reach new customers. By implementing the processes we’ve outlined for finding and targeting cold traffic audiences on Facebook and Instagram, you’ll put yourself well ahead of your competitors.


Tired Of Unprofitable Campaigns?

Learn the method we’ve used to help profitably grow and scale e-commerce brands to 6-7 figures online with paid advertising. Save time, money, and countless hours testing by following our scaling method.


How to Create a Profitable Paid Ad Strategy For Your Videos And Grow Your Business

Data shows that nearly 100 million hours of video are consumed each day on Facebook. 100 million hours!! Not only that, videos on Facebook generally achieve 135% more organic reach than photos, showing that users enjoy watching videos on this platform specifically. Because Facebook influences more than half of consumer’s online and offline purchasing behavior, it’s important to get in front of these potential prospects as quickly and as often as possible. This way to do this is through creating a profitable paid ad strategy.

There are a few key strategies to create profitable Facebook ads for lead generation businesses. With the right strategy for your videos, you can boost your business and grab a foothold in the marketplace. Here are 6 crucial steps you should take to make sure you generate those leads and close those deals.

Choose Your Budget

Begin with the end in mind. Know how much you want to spend. There are a few ways to go about this, with the two most common being a combination of a maximum daily spend and a set campaign budget. Setting a daily budget helps stretch your advertising dollars over a longer period of time.

When you select your budget in Facebook, you’ll be able to see your potential reach. There are several metrics, but here are the most important ones.

  • Reach – The number of unique individuals who saw your ad
  • Impressions – The number of times someone had the opportunity to see your ad
  • Cost per result – How much it cost to reach the goal (clicks, messages, etc.)

As you start out with your advertising, you may not know how many people you should be reaching and how much it ought to be costing. Spend a few minutes looking online for industry averages. You’d be surprised at how many agencies, service providers and individuals like to share their results. In broad brushstrokes, depending upon your industry, cost per leads can vary to as low as $11 to as high as $100.

With those ranges in mind, think of what you want to accomplish with the budget you’ve set. Remember, video advertising in general is more expensive, but that also is because it drives more attention, consideration and conversions when you reach the right audience.

Plan Ahead

Did you know that it can take up to 48 hours for Facebook to approve an ad? If you don’t plan ahead and your strategy is to quickly boost a video advertisement the day you post it, then you might not get the results you expected. (Especially if your content ends up taking more than 24 hours to get approved.)

Additionally, you might not be letting your ads run long enough. It’s fine to do a single, one-day advertisement if you’ve primed your audience to buy. However, if your one-day advertisement is the first time they’ve seen your brand, service or offering, you likely won’t be able to convert as many people into leads as you’d like.

Furthermore, remember that 85 percent of Facebook users watch video without the sound on. You need to plan to have your video ad make sense. This can be accomplished with text overlays or by using subtitles. No matter what, in order for your video to shine and generate leads, you have to think about how your content will look and how you will support your message through paid ads.

Pick Your Campaign Objective

You’ve budgeted and planned ahead. As part of that planning, you should have thought about what the objective of the ad campaign would be. While the end result is to generate leads through your fantastic video content, there are lots of ways to accomplish that task. Within Facebook ad campaigns, there are three overarching objectives – awareness, consideration and conversion.

In an ideal world, you would run video ads that support each objective in order to move people through the purchase funnel. Let’s talk about the tactics within each. Choosing the right objective for the right video can help improve your lead generation numbers and reduce your cost per lead.

Awareness

Awareness campaigns help generate interest by letting people know what products and services you offer. Facebook has two ways to create campaigns with awareness objectives.

  • Brand awareness
  • Reach

Each option has different ways the algorithm targets your audience. However, both types of awareness campaigns support single video ads. These campaigns are great for general brand lift.

Consideration

Consideration campaigns are designed to get people thinking about your business and wanting to look for more information about what you do. For video ads on Facebook, there is a consideration campaign designed entirely around lead generation. These lead ads include forms that your customers can fill out. This is perfect for creating a profitable Facebook ad campaign.

Conversion

A conversion campaign encourages people to purchase or use your product or service. People can fill out forms and not be ready to buy. Sometimes you need to let your video ad help seal the deal and convert those on the fence into your camp.

Set Up Your Website Correctly

It can take several hundred digital touchpoints to convert someone from consideration to conversion. One of the most painful things to watch is businesses who spend lots of time and money on video ads not take the extra step to ensure their website is ready to help them convert their leads into sales later. The two most important tracking tools to do this are Google Analytics and a Facebook Pixel.

The Facebook Pixel is especially crucial when setting up Facebook ads. These tracking cookie are all over the internet. By setting up these cookies on your website, you are learning who your customer is and what their behavior is. These cookies can be used to later remarket to people who have already interacted with your page, ads or website. This is really powerful and important stuff, so don’t think setting up a campaign on Facebook is enough.

Adjust, Adjust, Adjust

Once your Facebook ad campaign kicks off, check in on it. After 500 impressions, your ad will be given a relevance score. The closer to 10 that number is, the better the ad is performing with the audience you chose. Anything under 7 should be adjusted. That adjustment could be audience, creative, copy or call to action. A Facebook video ad campaign shouldn’t be set and forget. (The need to adjust to get things right is another reason to follow No. 2 and plan ahead so you have time to make changes.)

Review Metrics

Along with the relevance score, you need to check in on how much of the video ad has been watched. It’s important to see where people drop off. Is there a jarring cut? Change in the music? Do people lose interest? What percentage? Perhaps you want to remarket to people who started, but didn’t finish your video. Without reviewing the metrics, you won’t know if your video content is hitting the mark and ultimately making you money.

Conclusion

A profitable paid ad strategy for your videos requires budgeting, planning and reviewing. It’s not enough to set up a last-minute campaign and hope things will go off without a hitch. Start taking advantage of the video real-estate landscape Facebook has to offer and watch paid video ads take your business to new heights.

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