These days, running your own ad campaign isn’t rocket science – in big part thanks to tools like the Facebook Pixel.
Well-known ad platforms such as Facebook and Google are constantly evolving to make their tools as easy to use as possible. That means you can launch your own ads with no previous experience, and simply sit back and wait for the outcome. And, depending on what you promote and in which way you’ve set up your campaign, you’re capable of getting excellent results that meet your company goals. Easy.
But what if these results aren’t as good as expected? If your budget spend exceeded the desired profit from prospects’ activity?
You may think ‘This platform doesn’t work for me’ or ‘It’s too expensive for my advertising purposes’. You may, after just the first few days of paid activity, decide to cease investing further money. Or, if you have a decent marketing budget, decide it’s better to outsource this work to an agency and let them work their magic.
At Ladder, we’re used to such stories – we’ve heard them several times before. We’re no longer surprised when someone gets in touch asking for help with their ad performance problems, and we’re here to do our best to guide you in the right direction. That’s our job.
But – full disclaimer – we’re not making magic. Although we wish we had such skills, we don’t. All our ‘magic’ boils down to our knowledge, and the experience we’ve gained while working with our clients.
Over time, we’ve discovered one key fact: you can’t run a successful campaign without thinking of your marketing funnel in relation to data you’ve collected on your ad platform. You can’t expect amazing results by aiming your initial ads directly at the bottom of the funnel (namely, conversion campaigns).
Sometimes you’ll get great results from this, of course, but it’s much better to consider your collected data while creating a campaign, rather than just count on your luck.
Today, I’m going to showcase why this approach is so important when it comes to setting up your very first Facebook ad campaign.
Why you need Facebook Pixel
We can’t move on without first mentioning this crucial tool. Facebook Pixel is a must-have for your paid activity on this platform. It’s like your private assistant that collects all the data you want from your website or app users and makes use of it when needed.
This little snippet of code allows you to monitor what people do on your site, build up a picture of who they are and record which of them convert (be that a sign up, a purchase – whatever your goal is). The more data your Pixel collects, the more likely it’ll know who your users are and who else may be interested in your offer when you decide to reach new customers.
It’s exactly like running a store and getting to know who your typical client is based on the people that walk through your door. When it comes to advertising your store through printed flyers, you’ll know exactly who to hand the leaflet to in order to increase the chance of that person visiting your store. The Facebook Pixel works in the same way, collecting current user data and gradually spotting similarities among them over time.
I could talk all day about the Pixel’s advantages, but I’ll try to limit myself to its key benefits for those planning on using Facebook for advertising purposes:
- Tracking your website
With the Facebook Pixel, you can track the website activity that matters most to you. If you run an online shop, for example, you can monitor your customers’ journey and verify each of their steps towards conversion – from seeing your product content, through to adding the product to their basket, and finally to making (or not making) a purchase. Even if your website objective is simply to promote your services, you can still monitor which site sections are visited, how long people watch your promo video, or who clicks on your contact details. Your possibilities here are almost infinite.
Targeting your website visitors
Retargeting is one of the most effective features. Thanks to your Pixel data, you can direct your ads to people who have previously visited your website and carried out a specific action on it.
Most advertisers use this feature to reach people who showed interest in a given product but didn’t decide to buy it. Pixel allows you to show your ads solely to these people and try to convince them back to your site to finalize their purchase.
Targeting your previous customers
You can also reach your existing customers and try to offer them another product or service.
Let’s say you own an online bookshop and have users in your database that have previously bought a Stephen King book from you. In the run-up to the release of his new book, you can serve ads to those users and inform them that you’ll have it in stock. As you can imagine, the probability that those people will decide to buy is much higher than if you just directed your ads to book lovers in general.
Two other popular ways of taking advantage of such targeting are cross-selling and upselling. The first allows you to offer a complimentary product to the one that a given customer has previously purchased (i.e. if they bought a beard trimmer, you could offer replacement razor blades). The second way gives you an opportunity to encourage your current customer to buy something of a higher price (i.e. if you run a business based on subscriptions, you can direct your ads to users that are currently on a standard package and offer them an upgrade).
Improving your ad delivery
This is a crucial benefit. As your Pixel collects more and more data, its algorithm better understands your customers. It starts to see similarities among them and, based on all Facebook user data, is able to predict who is also worth advertising to.
Just think of a time when you saw a TV commercial that advertised an irrelevant product to you. Advertisers on this platform have to show their ads to anyone watching a particular channel, regardless of the buyer persona. With digital tools such as Pixel, however, you can pick your desired audience and be quite sure that your ads will go where they need to be shown. And, as you collect more data, the effectiveness of your ads continuously improves.
Last, but not least – Pixel is a free tool. Just as you can use Facebook Business Manager without a fee, so can you implement Pixel on your site. There really is no argument for not using this tool to optimize your campaigns.
How Facebook Pixel works
Now you know why you need to implement the Facebook Pixel, let me quickly explain how it works.
Imagine you’re running a business that sells pills for hair growth. You own a secret formula that makes your pills super effective, and you want to make money selling them. You head to Facebook and decide to run initial ads with an objective of driving conversion on your site. Seems reasonable. You want Facebook to find new prospects, after all.
Bearing in mind that this is your first paid activity on Facebook, and your Pixel wasn’t able to collect much data from your previous customers, you can only hope for an average result. That’s because Facebook will allow you to set up your conversion campaign even if you’re a new advertiser on this platform – it won’t refuse you because of a lack of customer data.
No, Facebook will use the data it has collected so far from all its users. Depending on your target audience, it’ll push your ads to people whose behavior in the past showed interest in buying medicine. And it can work! Even at this basic level, your ads can still perform well. But we want them to perform better.
Before we move on, I should clarify the way Facebook collects its data. If you’re logged in to Facebook on the same internet browser you’re using to visit Pixel-enabled sites, the Facebook algorithm matches all your activity to your Facebook account (using cookies).
So, if you visit sites related to baby strollers, Facebook logs your behavior and adds it to its data. It would then consider you a future parent. The more baby-related sites you browse on the internet, the more likely its algorithm is to treat you as a user that’s worth showing ads designed to target new parents.
Additionally, if you’re a regular online shopper that buys items on various sites (which have the Pixel installed), Facebook considers you as an ‘engaged shopper’ – one of the targeting options available on Facebook Ads.
Don’t forget the data you provide yourself on your Facebook profile either. The pages you like and all your activity (such as liking posts or sharing them) is tracked as well – becoming another source for Facebook as they build up a picture of who you are in a commercial sense.
But it’s not everything! Artificial intelligence has begun to deeply analyze our behavior too. Even if you stopped for a moment to view an ad, the Facebook algorithm will treat you as potentially interested – despite you not clicking on the ad itself!
All of these factors combine to create a large database of our activity that we can hardly imagine. And it makes platforms like Facebook a great advertising tool with laser-like precision. That’s why more and more advertisers are capitalizing on the opportunity that Facebook Ads presents. Their way of thinking is quite simple – if Facebook knows so many people’s behavior, it will easily find prospects for my business.
Let’s return to that scenario involving hair-growth pills. Imagine now that you’re an ordinary Facebook user who, once a month, decides to buy some drugs after seeing ads on that platform. You bought anti-hangover pills and anti-acne ones so far. You don’t have any hair problems – you never have. But just from the fact that you purchased other pills in the past, the Facebook algorithm may consider pushing those hair growth ads to you.
We can’t forget one simple truth: consumers are different. Not only could you target irrelevant audiences, but you could end up ruling out relevant ones.
If you want Facebook to find more accurate prospects, you have to first feed its Pixel with the data of your current customers. You need to run an initial campaign aimed at the very top of the funnel to let the Pixel find people who could be truly interested in your offer.
You may build an awareness campaign, or even one with a landing page objective if you’re too impatient. Whatever you choose, remember that the more data you collect at this stage, the better any further activity will be. Facebook can then more precisely pinpoint who the right person to show your ads is, but this all starts by first helping the Facebook algorithm understand who your customers are (or could be).
If you consider launching your initial ads on Facebook, try to implement the Pixel on your site a bit earlier. The sooner, the better. If your website has decent traffic, up to 1-2 weeks would be fine.
You can deploy the Facebook Pixel inside your mobile app as well. Simply implement an accurate software development kit (SDK) into your app – find out more on the Facebook for Developers site.
A real example
Now let’s look at a real example. This is a relatively new client for my team – a subscription-based start-up with a mobile app. Their target market is women, and they offer them a discount when they sign up through the app.
The client wanted new paid users. They turned to Ladder as their previous marketing attempts on Facebook had failed. They had spent over $1.5k obtaining only 11 app installs – that’s a cost per app install of almost $150!
What went wrong then? The first thing we checked was the ad campaign settings. The main campaign objective was app installs – an objective that’s dedicated to promoting mobile apps within the Facebook Group, so this seemed fine. However, once you pick your ad objective, you need to decide what outcomes are crucial for you.
There are a few options we can choose from when it comes to promoting a mobile app:
As you might guess, the two options related to apps are the most popular ones. The first (‘App Installs’) lets you optimize your ads towards gaining the highest number of installs possible. The other (‘App Events’) focuses on in-app events that are valuable to you.
In the case of our client, they wanted prospects to not only install their app but also to conduct a specific action inside the app. They measure their success by both install volume and the number of purchases made by users once on the app.
So you shouldn’t be surprised when I show you what ad optimization option was chosen by our client:
All seems to be done correctly, doesn’t it? They had focused on purchase volume, so it seems the right optimization option was picked. Additionally, only about 30% of people on average open an app just after installation. The rest may do it a little later, or even never. So, from this point of view, you want to pay for a user that will make a purchase later on.
It makes sense. That is, until you ask how much data their Pixel had managed to collect so far.
As it turned out, it hadn’t gathered any at all. This Pixel was completely new, with no earlier activity reported. So, by running this initial ad campaign with a conversion objective, our client effectively sent the following command to Facebook: ‘Hey Facebook, I have a great app for females. Here is my money and I ask you to find women who will also decide to purchase my services via the app’.
And Facebook proceeded with this request. Take a look at the results again:
The campaign was optimized towards in-app events, not app installs. So the ‘results’ column shows the number of people who made a purchase inside the app: 0.
Next, take a look at the app install volume data. 11 installs. Facebook was asked to find prospects who would make a purchase in the app without even giving its algorithm any data of who would be interested in downloading it! And it really tried hard.
Facebook was probably pushing our client’s ads to people who have bought something inside an app in the past. But those people could behave in a different way, have other problems that they thought our client’s app could solve, or want to take advantage of such services for other purposes.
After checking the campaign settings and verifying the Facebook Pixel, we decided to change the funnel stage we were optimizing for. Instead of focusing on in-app events, we launched a new campaign with the objective of driving app installs (and optimized towards volume).
Why? Because we don’t know who is likely to download the app, we can’t predict who would make an in-app purchase. As we need users’ data for Facebook, we have to broaden our audience and then pick out those who are likely to make a purchase.
So, we directed our activity to the top of the funnel – to the awareness stage. We encouraged women to download the app and, after we convinced enough women to do that, we were able to understand who is more likely to convert inside the app. Data on those who decide to convert will be crucial for Facebook in order for them to find other prospects.
Here are the results we gained after changing the optimization option and the stage of the funnel the ads focused on. The same audience, same money spent – and it took us just 15 days:
What can we see here? The same budget brought us less reach and impressions, and less link clicks too. But just notice how many app installs we’ve managed to gain and what the cost per install was.
Best of all, those results were being improved day by day as the Facebook algorithm is fed with more user data. The more app installs we obtain, the more chances for in-app purchases we have. And the more purchases we obtain, the higher the probability there is that Facebook will find paid users in the future.
But for now, for the current stage of the funnel, we are focusing on, we need to expand the user base by increasing the install volume.
What are the next steps?
At the time of writing, we’ve managed to get almost 20 in-app purchases. We’re still focusing our efforts on increasing the install volume in order to achieve more conversions inside the app.
Once we have enough of them (Facebook suggests to have at least 50 conversions a week to be able to optimize correctly), we will be able to run a new ad campaign, optimized for in-app events. Only then will we be sure that the Facebook Pixel is ready to find similar people to our paid users.
The lesson to remember is: don’t make your very first Facebook Ads campaign a conversion-based one if you haven’t yet collected previous data through Facebook Pixel.
You may think running a campaign aimed at the top of the funnel is a waste of money. What you really want, after all, is for prospects to carry out a specific activity that happens at a lower stage in the funnel. But it’s not a waste. It’s the best way to feed your Pixel with data, as well as warm-up your target audience before you ask them to convert. If you don’t teach the Pixel your customers’ behavior, you may just go astray – spending vast amounts of money and not getting the results you want.