Generating Demand with Facebook Advertising for Ecommerce
Facebook and Google are all the rage in digital advertising. Google has amassed $53 Billion in ad revenue this year, while Facebook has pulled in $21 Billion according to eMarketer. Together Google and Facebook account for 58% of all ad spend.
Most of our paid marketing clients are utilizing Google, but not all have been advertising on Facebook despite the platform being incredibly powerful. If you’re looking for a compelling argument why your business should be looking to divert some marketing dollars to Facebook advertising, we have you covered. We’ll also explore some of our strategies proven to guide ecommerce stores to success.
Facebook Creates Demand
Google does one thing really well: helping people get connecting to the information they are already interested in knowing more about. Serving ads to those in search of this information makes up 86% of Google’s entire revenue.
In economic terms, Google helps the demand (those who are seeking goods and services) connect to the supply (those who can provide goods or services). That is what makes Google so effective.
However, Google’s tools are limited in terms of increasing demand. While YouTube might like to have a word about this, ad blindness is certainly at play here.
Facebook is far better at creating demand for products. One of Facebook’s strongest assets here is Lookalike Audiences. Because Facebook builds profiles of people who perform certain actions on their site, Lookalike Audiences help connect marketers to particular groups of people with similar interests and buying habits. We can now take these new audiences and serve them with ads, knowing they are likely to convert as well.
So in regards to our original supply and demand problem, Google is waiting to catch the demand while Facebook is generating it.
Facebook and the Funnel of Demand
Lookalike Audiences are a large part of why businesses are using the platform to promote their brands. However, Lookalike Audiences should not be used in a vacuum and are only one part of the larger picture that is creating demand.
We like to think of Facebook as a buying funnel or tool where we can move people from the top of the funnel to the bottom, eventually purchasing your product. To demonstrate a complete Facebook advertising strategy, we’ll start with the essential campaigns at the bottom of the funnel and work our way up into potential strategies that we employ.
Funnel Level 0: Purchased Remarketing
The very end of the funnel is remarketing to people who have already purchased from your store. This helps build a strong ROI for ecommerce stores, especially when dealing with a product that demands repurchasing like disposable razors.
Similar to segmented email campaigns to current shoppers or branded campaigns on Google Ads, our goal is to reactivate the customers whom you have already won. It’s often said that it’s 10x less expensive to retain an existing customer than to acquire a new one. That’s why building out thoughtful remarketing campaigns are consistently worth your while.
As the final level of your sales funnel, you should continually expand and diversify your strategy as the other, top of funnel steps become reliable.
Funnel Level 1: Add to Cart Remarketing
As the next highest step in the funnel, the goal here is to capture those who have “added product to cart” but have not purchased. We want to help them over the hump in their purchasing decision. In true funnel fashion, the volume seen at this stage will increase as more and more people begin adding items to their shopping carts, a sign that the acquisition stages of the Facebook funnel above it has started to work.
Again dynamic remarketing will certainly help engage more potential customers and turn them into purchasers. We also recommend testing every single ad served in these campaigns in order to find the one that resonates with customers the most.
Funnel Level 2: Lookalike Audiences 1%
As we have mentioned before, Lookalike Audiences are the preferred method of creating more demand for a brand. Lookalike Audiences can also be separated out into percentages. These percentages indicate the similarity accuracy of the new audience to that of the purchasing customers being tracked. Facebook’s percentages range from 1-10% and are less accurate the further they are from 1%.
We recommend setting up two 1% Lookalike Audiences. One for those who have purchased and another for those who have added items to their cart. It can vary from industry to industry which is a better data set to extrapolate from. Testing is always key.
Higher Percentage Lookalikes & Leveling
While the 1% Lookalikes are essential to growth, there is a lot of potential left in the Facebook ad platform. Just because higher percentage groups are less accurate, that doesn’t mean that they should be ignored.
After you have fine tuned your core campaigns, begin experimenting with higher percentage audiences. Since you are already targeting 1% Lookalikes in your essentials strategy, be sure to exclude them from your broader campaigns to get a clearer picture of how these additional groups perform without skewing your data.
Manual Audience Creation
To have a bit more control over the markers being used to create your Lookalike Audiences, you create audiences manually based around potential interests and demographics.
For example, a company selling backpacks can target those who like the outdoors. While those who are selling backpacks for children should take their targeting a step further and target those who like the outdoors and have children. Age Ranges can also be set and income can still be targeted by the zip code at this level.
Manual campaigns are only limited to Facebook’s collected data and your imagination.
Hybrid Lookalike Models
Where we have seen significant ROI is the hybrid approach. These campaigns are built on a higher percentage Lookalike Audiences, such as 5-10%, and then are manually edited to fit a targeted demographic that only the marketer’s insight can truly understand.
Details like whether a product is dependent on having children or if the product is only available to a certain part of the country are critical to managing ad spend. The knowledge that the human offers to the AI algorithm is critical when it comes to increasing ROI for certain campaigns.
Big Spender Audiences
One of our favorite Lookalikes to utilize is “big spenders.” This targeting approach dissects purchaser habits by those shoppers who often buy more than the average shopper. To identify this desired Lookalike Audience, filter out your data to only include order values that are slightly higher than average over a given period of time.
We like this strategy because those big spenders, who are known to often spend a lot of money on a given site, are our ideal customers. Finding them and converting them into fans of our brand can be incredibly profitable in the long run and is often worth the higher CPA.
If you are looking to become more aggressive with your ecommerce marketing strategy, Facebook advertising might be your answer. Contact our team for an audit of your current Facebook ads, and we’ll help you actively generate more demand for your ecommerce brand.