Earlier this year, we were given a failing campaign and tasked with the ultimate marketing challenge of turning it around. Not only did we succeed, but we transformed the campaign into a highly profitable one for a very happy e-commerce client.
We were able to achieve this through some simple tactics that many top Facebook ad experts use to optimize their Facebook ad campaigns - in this post, we'll go through how we increased the return on ad spend (ROAS) an improved this campaign, with notes that may help you improve your own Facebook marketing approach.
Here we go.
Step 1: Assessment
Our first step was to pinpoint exactly what was working, and what wasn’t.
After managing millions in Facebook Ad spend, we’ve discovered that, more often than not, getting the most out of Facebook Ads means getting the most out of these three powerful areas:
1. The Audience (and attributes) - This can be broken down into a few great sub-leverage point areas:
- The ‘list’ you target
- The Age group
- The Gender
- What you are optimizing for (here, they were optimizing for conversions, so there was nothing to change)
2. The Offer - Facebook offers get stale, especially if you’re marketing to the same audience.
3. The Ad Type – Vital - Collection ads had just been recently released, and we were using them with a lot of success for our e-commerce clients.
Here’s everything we discovered that was being done wrong in the failing campaign:
- There was only simple interest targeting (very general and not been set up in a scientific way)
- Their audience retargeting (both website retargeting and video view retargeting) wasn’t set up effectively
- They had not done any gender analysis
- They had not used any age limitation
- And, were not utilizing any lookalike audiences based on their customers who actually bought (they were only doing lookalikes of their email list)
An age breakdown analysis revealed the following:
From the above, it was clear that 18-45 year olds were the ages to focus on.
We grouped major ages that performed together, in order to analyze their total ad spend, sales and return on ad spend (ROAS):
When analyzing their placement, we discovered that
Mobile accounted for:
- 78.63% of their traffic
- 90.89% of their spend
- 94.21% of their sales
It clearly had the highest ROAS at 3.59 for any meaningful spend.
Ad Type Analysis
The current campaigns were using a single video with the featured product - randomly testing multiple videos and rotating them.
With knowledge of collection ads performing well for some of my other clients, I was really keen to incorporate collections ads in our test.
How We Grew ROAS By 84.65% and Turned this into a Wildly Profitable Campaign
Here’s what we did – and why:
1. Placement Targeting
Given that mobile contributed to over 90% of their sales, we decided to only focus on mobile placements.
We created the following audiences:
- Retargeting - Added to cart retargeting (180 days)
- Retargeting - Product category retargeting (exc. added to cart - 180 days)
- Video view retargeting (love this one)
- Product buyers Lookalike audience 1%
- Product category buyers Lookalike audience
- Lookalike of all other products buyers 1%
- Interest-based Targeting Only
For most audiences we had the following attributes:
- Both Male and Female
- Limited age from 18-40
- Excluded those that had bought the product (were in ‘customers customer list’)
- Automatic bidding – to optimize conversions with a 7-day conversion window
2. Ad Type
As noted, we limited our targeting to mobile only.
We used the most successful video that was working and decided to split test the single video ad against the new Facebook Collection ad, to see what the impact would be (for this, we had a to do a bit of work setting up their feed).
We agreed on the testing of two new offers:
- One without free shipping at a lower price point at $157 (with no mention of free shipping, they would add-on the shipping later of $20)
- The other with their original offer of free shipping - but also convinced them to add a small freebie that cost them less than $3 to make
After two months and $35,392.41, this happened …
A +6.33 ROAS meant every dollar spent was now returning 6.33x in sales. This meant an increase in profits from a barely breakeven position, to generating a 105% ROI on his spend (according to feedback from the client).
He told me that they went from netting almost nothing on a 15k per month spend - to netting over 16k per month in profits.
Sales for the same spend from their previous campaign would have been in the 120k range.
We bumped this up an extra 100k in extra sales for no additional spend (this is why we spent 5k more than budget allocated – he gave us the go ahead)
We increased ROAS% close to 85%, and achieved this through a:
- Drop in percentage cost per sale of 43.42%
- And an increase in average dollar per purchase of 4.47% (Both the client, and my team were delighted with this.)
Overall Offer Analysis
Here are the results by offer:
Both offers thoroughly outperformed the original offer, with new offer two nearly coming in at double the rate of new offer one.
Overall Gender Analysis
Females and Males returned an ROAS of 7.1 and 6.14 respectively. These returns were unprecedented.
Here’s how the new campaign fared against the old campaign:
Overall Age Analysis
As mentioned above we limited our targeting to between 18s-40s for any audience that was not a website retargeting audience.
Age Group Analysis
All age groups, except the 18-24s, had both a decrease in CPS% change and an increase in dollar/sales.
Ad Type analysis
Compared to the original ads they were running; Collection ads nearly doubled the return they were getting:
The additional work of getting their feeds set up was more than worth it, and paid off handsomely.
Outcome After Two Months of Optimization
So, our two months were up, and our results were in.
Our client’s turnaround had gone from barely breaking even (as low as 2.8x from FB sales at one low point) to an overwhelming campaign success of:
- A 6.33 ROAS (they had never achieved results like this in the past, even in their most profitable periods)
- An extra 100k in sales for no additional spend
- Drop in Cost per sale% of 43.42%
- An increase in average dollar per purchase of 4.47%
- A whopping ROAS increase of 84.65%
These tips obviously won't apply to all campaigns, but hopefully there are some notes in there that you can use to help optimize your Facebook marketing approach.