Facebook Ads is one of the most popular platforms for eCommerce brands to advertise on. As the main player in the paid social game, Facebook ads can help stores increase brand awareness, drive traffic to their websites, and ultimately boost sales.

However, it's not just about reaching the right audience, but also about measuring the success of your ads and being able to attribute it to the revenue generated, which will help you scale your ads account and increase profit margins.

Because the platform can be quite intimidating to new advertisers and smaller players, with its variety of ad formats and targeting options, this guide will give you a comprehensive overview of how to use Facebook Ads for eCommerce and how to correctly measure and attribute your ad performance.

Getting started with Facebook ads for ecommerce

The first step to advertising on Facebook is creating a Business Manager and a Facebook page. Once you have those two set up, you can create your ads account. It's a pretty quick and easy process.

To create an ads account, follow these steps:

1. Go to Facebook's Business Settings
2. On the left-hand navigation, click "ad accounts" under "Accounts"
3. Click "Create a new ad account" under the "Add" drop-down menu
4. Go through all the steps until you reach the Facebook Ads Manager dashboard, where you can start creating and managing your ad campaigns!

Creating your Facebook Pixel

A Facebook pixel is a small piece of code that you can place on your website to track visitor actions (like button clicks and purchases) and gather performance data for your Facebook Ads. You'll need this to measure any actions taken by users who click on your ad, which ultimately will help you determine which ads are driving your desired outcomes. Here are the steps to set up a Facebook Pixel:

1. Go to Facebook Ads Manager and click on the hamburger icon in the top left corner.
2. Click on "Events Manager" and click "Connect Data"
3. Select "Web" for your data source and click "Connect"
4. Name your Facebook Pixel, and click "Create Pixel"
5. Enter a name, and click "Create Pixel"
6. Click "Conversions API and Meta Pixel"

Adding your Facebook Pixel

Shopify makes adding a Facebook Pixel super easy by having an integration feature that allows you to add the Pixel without manually changing the code.

1. Go to "Data Sources" on the right-hand side
2. Click "Continue Pixel Setup"
3. Copy the code and paste it at the bottom of the header section, under the </head> tag

If you want to use the Shopify integration:

1. From your Shopify admin, click "Apps and sales channels" under "settings"
2. Click "Facebook & Instagram"
3. Click "Open sales channel."
4. Click the "Settings" tab.
5. In the "Share data" section, choose your data-sharing level
6. Select your Pixel from the list.
7. Click "Confirm"

Facebook Ads for ecommerce campaign objectives

When you create a new campaign, you will first be prompted to choose an objective for your campaign. The objective that you choose will dictate the metrics that you track to measure the success of your campaign, as well as what Facebook’s algorithm will optimize for. For example, a campaign with the "Traffic" objective will measure Link-clicks, while a campaign for "Leads" will measure leads (or form completions).

Although there are many goals, including more top-of-funnel goals like "Awareness" and "Traffic," the main metric that you want to optimize for is Sales with an eCommerce store. This will count a conversion for every purchase made on your website from your ads.

Types of Facebook ecommerce campaigns

It's every marketer’s dream to have new customers buy from your eCommerce store after seeing one of their Facebook ads for the first time. It's also unlikely to happen for most of your customers. The customer journey is quite a complicated one, to say the least.

Here are the most popular types of campaigns that you should have in your account. Each campaign serves a purpose and targets specific customers in their stage of the sales funnel.

1. Prospecting ecommerce campaign

This Facebook ad campaign type is the broadest and is highest on the funnel. Its goal is to reach potential customers and hit cold audiences that have not yet interacted with or who have not seen your ads before, based on the targeting that you configure.

For prospecting campaigns, here are examples of audiences to use:

• A broad audience: the point of a broad audience is to allow Facebook to use its advanced algorithm to find the customers that are most likely to convert, and to hit your target audience. To set a broad audience, simply target a country, a gender, and an age. Leave all detailed targeting blank. Let Facebook's automation do its thing!

• An interest stack: Facebook has slowly been getting rid of specific interests since the iOS 14 update, and the interests have grown to become less reliable since Facebook does not necessarily hold that information for all its users. That's why stacking multiple interests in one ad set is the most accurate way to go about this. You're giving Facebook a wide selection of interests to look at, which Facebook will use as a starting point, and then use its algorithm to pinpoint your target audience once it collects enough data.. Facebook will use your detailed targeting inputs as initial suggestions, and will move beyond your set audience if it finds better segments that convert.

• A lookalike audience (LAA): Another popular audience would be a lookalike audience, in other words, Facebook users who share behaviors with your customer or website traffic For example, you can create a lookalike audience of all the past buyers on your store from the last 180 days, and Facebook will find similarities amongst members in this list and use those common attributes to discover similar users who are highly likely to convert as well. This is a way to tell Facebook to find people who behave most similarly to your customers who have already purchased.

The point of a prospecting campaign is that you give Facebook enough signals to know where to look for the initial phases of your campaign. Your targeting here, and your ad creative, will drive your ad to high-quality users.

2. Retargeting ecommerce campaign

Retargeting campaigns are the middle and bottom-of-the-funnel campaign types. This campaign type typically targets users who have already interacted with your ad, or visited your website, intended to driving sales.

To create a retargeting audience of those who have interacted with your website, you'll need to create a custom audience. A custom audience is a feature in Facebook that you use to build audiences off of data from either the Pixel or email lists that you upload.

Some popular custom audience examples are:

• Website visitors of the last 90 days
• Add to carts from the last 7 days
• Past purchasers (exclude this audience from targeting in certain cases)
• Emails captured on your website (this will only be accurate if the user uses the same email address on Facebook as they did on your website)

Retargeting campaigns post-iOS 14

Although retargeting is still a very important part of any eCommerce store's marketing strategy on Facebook, since Apple's recent privacy updates, these audiences have gotten weaker and less accurate. Pre-update, Facebook had a ton of data on every user that interacted with your ad. Now, most of your retargeting audience will be in your prospecting campaign, because Facebook isn't able to keep track of them as efficiently.

With that being the case, if you're running ads with smaller budgets (anything under $10,000 per month) it's worth testing your campaign setup without a retargeting campaign. Test it, and see if it makes sense for your brand.

3. Creative testing ecommerce campaign

Over the last few years, this campaign has become one of the most important campaigns in a Facebook ads account. Your ad creative (the visual element of your ad like an image or video) will be the most important factor to determine whether your ads will be successful or not. Therefore, Creative testing is one of (if not the) most important concepts in Facebook ads.

Although it's important to know what works for your brand and to test different things, here's one way you can run your creative testing campaign:

To create a creative testing campaign, simply run the creatives you want to test against each other under the same ad set. Make sure your campaign is running on an Ad set Budget Optimization (ABO) so that Facebook spends your budget on each creative test.

Your creative testing campaign should use about 10% of total ad spend, and winning ad creatives will be pushed into the "Prospecting Campaign" with the different audiences, ready to be scaled.

Determining a winner will be based on your goals, but the first metric to look at is the "Amount Spent," meaning which creative Facebook spent the most on due to its performance, and then the second metric to look at will be Click Through Rate (CTR).

The learning phase in ecommerce

Once you create your campaigns, they will enter the "Learning Phase." This phase is when Facebook takes all the signals you gave it and begins learning about your target audience and learning about who responds well, and who doesn't, to your ads.

Facebook will get out of the learning phase once it hits 50 conversions within 7 days. However, the learning phase is quite sensitive, and actions such as changing ads or updating copy can reset the learning phase. In reality, Facebook will always be learning about your ads, but this phase will just be Facebook's initial learning and can have worse performing metrics.

Budget optimization in ecommerce

There are two ways to optimize budget in Facebook:

• Ad set Budget Optimization (ABO): This method allows you to dictate a specific budget for each ad set of your campaign. If you want to make sure that Facebook spends at least $X on an ad set, then you'll have the most control with ABO. ABO is best used when testing. You set the budget at the ad set level.‍
• Campaign Budget Optimization (CBO): This method allows you to set a budget at the campaign level, and Facebook will dictate which ad sets get  budget based on the performance of each ad set within the campaign. For scaling campaigns, where you want Facebook to take control of the daily budget optimizations, use CBO. You set the budget at the campaign level.

Facebook ecommerce ad creatives

Creative is the most important piece of your Facebook ads puzzle. It's what your potential customers first see, and it's what gets them interested in your brand, and onto your website. It'll have the most impact on your ROI and will drive sales.

Best practices to have in your creatives:

• Always have a call-to-action (CTA) in your ad
• Highlight the offer and add dates (if possible) to foster the sense of urgency and/or scarcity
• Highlight your brand's unique selling points: Why should your customers buy from you. What pain points do you address?
• Testimonials: Show positive feedback from past customers using your products and increase your social proof!
• Create a thumb-stopping hook for video creatives.
• Create User-Generated Content (UGC) videos: These are super popular nowadays, and are a great way to create relatable content from past customers and influencers in your brand's niche.

Note: Keep ad fatigue in mind, and have a constant flow of creatives you can reach for when you start seeing Frequency creep up and CTR decrease.

Test idea: See whether sending traffic to your product pages or dedicated landing pages will increase conversion rates.

Facebook eCommerce bidding strategies

When you select a Facebook bidding strategy, you're telling Facebook how you want it to bid in an ad auction for your e-commerce store. Although changing the default bid strategy (from Highest volume), depending on your goals, can be a positive optimization that you can test, it generally isn't going to be the reason why your ads are or aren't performing the way you want them to.

Play around with bidding strategies to help improve performance that's already doing well, but don't use them as a way to fix your ad’s overall performance. Chances are, your creative needs refreshing, or your targeting needs a look at.

You can switch the bidding strategies at the campaign level (if you're using CBO), or at the ad-set level (if you're using ABO).

Here's a brief overview of the different Facebook bidding strategies:

• Highest volume (lowest cost): This is Facebook's default bidding strategy. Facebook will try to get you the most conversions for your budget and will spend your entire budget.
• Cost per result goal (cost cap): Facebook will use your cost per result goal to bring you conversions around that price point.
• ROAS goal: Facebook will keep your average ROAS at the goal that you set.
• Bid cap: This is where you will set a maximum bid for your ad auctions. Otherwise, Facebook bids dynamically based on your goals.

Each bidding strategy has its own use cases and things to look out for.

Facebook attribution settings

Attributing your Facebook ads to a sale accurately is necessary to scale your ads effectively. Your e-commerce business needs to know where a specific sale came from, and what part of the user journey a single ad falls under.

An attribution window is the timeframe where the desired event will be attributed to an ad after the user interacts with an ad (typically a view or click interaction). On Facebook, you can customize your attribution window. The default is set to "7-day click or 1-day view," meaning that if a customer buys up to 7 days after clicking on your ad, or 1 day after viewing, that ad will get attributed the conversion.

The different attribution windows on Facebook are:

• 1-day click
• 7-day click
• 1-day click or view
• 7-day click or 1-day view

You can change the window under the ad set level.

It's important to know that the attribution window that you pick will be Facebook's optimization window. This means that Facebook will try and show your ad to users that are more likely to convert within your set window.

Scaling your Facebook ads for ecommerce

To efficiently scale your ads, you'll first need to look at accurate data. The metrics that you look at will depend on your goals. For example, if you're looking at sales, ROAS and cost per acquisition are two important metrics to look at. If you're looking at traffic quality, conversion rate (CVR) will be a crucial metric to track.

The bottom line is, figure out which goals you're focusing on with your Facebook advertising, and look at the metrics relevant to those goals.

If your ads aren't performing how you want, you'll need to identify where the performance drop-off is. Are people not clicking on the ad? Are people clicking and not converting? Using this data, you can learn where in your funnel needs optimization.

If your ads are performing well, continue slowly increasing the budget. Don't increase your budget more than 20% every 3 days, as doing so will shock the algorithm and reset the learning phase.

Dominate ecommerce with Facebook Ads

From setting up your ads account to scaling your campaigns accurately and efficiently, your e-commerce business is now ready to tackle Facebook advertising! Keep in mind, there are many different strategies and the Facebook ads landscape is constantly changing.

There is no one roadmap to Facebook ad success, but with the strategies outlined in this article, you now have a great foundation to build your own strategies.