RESOURCE

Ultimate Guide to Achieve

High ROAS with
Facebook Ads

Facebook Advertising 101

 Facebook Campaign Setup

Reporting
AGENDA Analysis & Monitoring

KEY DISCUSSION Horizontal & Vertical Scaling

POINTS Lookalike scaling

CBO Guide

Pink Power | MARKETING AGENCY FOR DTC BRANDS

FACEBOOK Choosing Your Winning Product:

CAMPAIGN Don’t search for a trend. Find products that are

SET UP already working and you're going off that to make
it work better. Find 1-3 Winning products.

When looking for new products to test, keep in

mind to sell products closely related to what is
already working, that way it works better for your
Facebook pixel.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

 Budgeting:

Spend $60 per product to test. $5 Daily budget

for 6 different ad sets for 2 days.

Ad objective: Test a website conversion ad set

optimized for Purchase right away.

Ages: 18 – 65+ (I leave it broad for it to optimize

better)

Countries: For product testing always target Tier 1

countries.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

Targeting:

Keep it related to what you are selling & use

1 interest per ad set.

For example, let’s say you’re selling a dog collar. Use large
audience interests (1m+) eg. Dogs, Dog walking, Pets,
Dog lover. Don’t use super small interests eg. Pitbull lover
magazine (3,000 audience).

The higher your audience, the cheaper your ads will be to

deliver.

Look for ad set audience to be around 1m-20m.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

Devices: All devices

Placements: All (make sure you upload resized assets)

Conversion Window: 7 day Click/ 1- day view optimization

Ad Creative: Video ads. Use HIGH QUALITY video. Split test first
5 seconds of the video it should hook people’s attention and
have a wow factor.

Ad Copy: Keep the ad copy simple. Have a simple Ad HOC

mentioning the problem that product solves and highlighting
1-2 benefits & use emojis. Include link in the end of ad copy.(Pro
tip: Use same Post ID to carry the social proof from the ad).

Pink Power | MARKETING AGENCY FOR DTC BRANDS

REPORTING
Why do we need creative performance reports?

We take advantage of all the available data to understand why a

particular ad is working (or not)
We can use that data to improve existing ads We can use that data to
produce new ads
We can communicate these learnings with other people involved in
creating new ads (designers, content creators, etc.)

What we need for these reports?

Ads Reporting
A set of custom metrics
A proper naming convention (ideally)
Pink Power | MARKETING AGENCY FOR DTC BRANDS
SETUP
To locate the Ads Reporting section navigate to the Business Manager of the
client account you are accessing then select:

Menu > Analyze and Report > Ads Reporting

Click the Create Report button.
Select Pivot Table report layout

Pink Power | MARKETING AGENCY FOR DTC BRANDS

Add Full List of Metrics:
ROAS
Amount spent
CTR (all)
See More Rate | Format = Percentage | Formula = (Clicks (all) − Link clicks − Post
reactions − Post comments − Post shares) ÷ Impressions
CTR (link click-through rate) CPC
Link Click to Purchase (custom metric) | Format = Percentage | Formula =
Purchases ÷ Link clicks
AOV (custom metric) | Format = Currency | Formula = Purchases conversion
value ÷ Purchases
Thumbstop Ratio (custom metric) | Format = Percentage | Formula = 3-second
video plays ÷ Impressions

Pink Power | MARKETING AGENCY FOR DTC BRANDS

AD ANALYSIS
First 1-2 days you're not looking for sales. You’re looking to see if the product has
traction.

Always look at the current day when your testing (TODAY) - If you are scaling you can
look at the last 4 days.

Metrics to look for, 1-2 days after launch:

Cheap CPC, CPM, low Cost Per ATC

High Relevance Score: Higher than 7, High Cost Per ATC? Low CPC? - Overall Your site
is the problem.

People clicked your ad because they were interested. Something turned them away.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

High Cost Per Click/ High ATC (Add to cart), Low Relevance Score? - Your Ad Creative
is the problem. Change your video (most important) or ad copy.

When trying to lower the CPC, or ATC cost, try and come up with better ad copy that
can resonate with your audience.

You Want CPC to be below $1 but may have to tweak anything between $1- $2 that's
consistent or becomes cheaper.

Low/Medium ATC? High CPC? High Relevance Score? - Work on a better audience.
Maybe your audience isn't the best.

No Purchases? If you don’t see purchases after 1-2 days. Kill it. Start over with a new
product & repeat the process.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

MONITORING
KILL THE AD SET IF:

AD SET SPENT $5 AD SET SPENT $15 AD SET SPENT $20

AND AND AND
▸ Has $2+ CPC ▸ Has no add to cart ▸ Has no purchase
▸ Has no link clicks
* Unless it has an add to * Unless it has a purchase
cart or purchase

Pink Power | MARKETING AGENCY FOR DTC BRANDS

SCALE THE AD SET IF:

If the ad set is running for more than 3 days and has:

▸ CPC under $1
▸ CPM under $12
▸ Cost per ATC under $10
▸ ROAS is higher than your Brake even ROAS

*(Calculate yours in the next page)

Pink Power | MARKETING AGENCY FOR DTC BRANDS

PREPARING FOR SALES
If your metrics are good like the above example, then on day 2-3 you should
duplicate winning ad sets that got you purchases with profitable ROAS (Return on
ad spent) anything above Brake even ROAS

How to calculate Brake even ROAS:

Break-even ROAS = 1 / Average Profit Margin %

For example if you have a product with 70% profit margin then your
brake even ROAS would be = 1 / 70%= 1.77

When duplicating change interested that is similar, the easiest way to

find similar interest is in the interest Suggestion box in ad set editing
section. Leave everything else the same.
Pink Power | MARKETING AGENCY FOR DTC BRANDS
 HORIZONTAL
SCALING
Horizontal scaling is finding new audiences. Find a new
audience that you can scale to a decent point, before
you move onto another audience and see what else
works.

Different angles to think when searching for new

audiences:

Related TV shows
Related Magazines
Celebrities that are in your niche
Communities
Related interests
Pink Power | MARKETING AGENCY FOR DTC BRANDS
 INTEREST
RESEARCH
Here we test all the Adsets.

If it’s a Anti Ageing product we can test things

like:
Lancôme
Facial
Beauty
Anti-aging cream
Moisturizer
ULTA Beauty

Pink Power | MARKETING AGENCY FOR DTC BRANDS

 VERTICAL SCALING
After you find enough winning ad sets with horizontal scaling
and you would not come up with any other interest to test,

Vertical scaling comes to help.

It is best to start it when you have at least 4-6 profitable,

consistent ad sets that have profitable ROAS.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

 With vertical scaling you find 4-6 ad sets and scale those up heavy.

Ex: You have 5, $5 ad sets that has been performing very well, it is less risky if you scale
up those 5 ad sets by $5, so from $5- $10, instead of just scaling 1 ad set to $100.

If an ad set has consistently been making profits and having good metrics, you can
vertical scale.

Best practise is to increase ad set budget every 2-3 days if they show consistent
results. So until $100 budget for an ad set I would recommend increasing it 2X every 2-
3 days. When you hit $100/day with one ad sets it is best to increase it by 20% every
couple of days.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

LOOKALIKE AUDIENCE
After couple weeks of scaling was successful you can scale with Lookalike Audiences.

A Lookalike Audience is a way to reach new people who are likely to be interested in your business because
they're similar to your best existing customers.

You can make Lookalike Audience from the people who have viewed you ad video 95%, people who have went
to your website, added to cart, purchased.

You can easily create it in your business manager under audiences section.

Lookalike Audience – it is a custom audience (such as website visitors, people who have viewed 75%, 95% of
the video).

What it does: is finds thousands and even millions of people that are similar people with your source
audience.

You can create lookalike audience of basically any custom audience that you can create such as people who
added to cart, purchased and so on.
 The more data your custom audience has the better. That is why I most of the time start with people who
have viewed 75% of the video then 95%, viewed product page, added to cart and the last one is purchased
the most powerful one.

When to create them: start creating your first lookalike audiences as soon as you reach 15-20 sales. So if you
start with 75% video view lookalike then wait until you have at least 3000 people in the audience of people
who have viewed 75% of the video.

Start with 1%,2% and 3% and use the country or multiple countries that is making you the most sales.

Percentage mean how accurate to the custom audience also called seed audience is. For website visits
Lookalike audience it would be great to have at least 1k people in custom audience.

For add to cart and purchase lookalikes the number is about 200-500 people.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

 CBO
Campaign budget optimization.

I’m sure you’ve heard about it.

If you haven’t, you need to pay close attention.

Starting in September, Facebook now begins automatically shifting ad accounts over to

campaign budget optimization.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

 CBO
So what does this mean for you?

• You’ll need to use bigger budgets

• You’ll spend less time manually shifting those budgets

• You’ll give up almost complete control to machine learning.

We’re unsure how long the roll out will take, or how many accounts will be affected at first,
but rest assured, this will affect all of us.

One of SMART’s core value’s is being customer oriented. We pride ourselves for doing all we
can to make sure you succeed.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

 CBO
So to ensure that you are prepared for, and succeed at, this dynamic shift, we
conducted a month-long research study on campaign budget optimization for one
of our products.

Our results were nothing short of amazing, so if you stick to our plan, I am
confident you’ll see the same success.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

 WHAT IS CAMPAIGN
BUDGET OPTIMIZATION?
Campaign budget optimization (CBO) is an ad strategy that allows you to maximize campaign
results and spend less on underperforming ad sets.

By harnessing Facebook’s machine learning, your campaigns will automatically and

continuously yield the best results based on open opportunities.

Previously, Facebook’s built-in optimization improved ad delivery through a learning phase

which happened at the ad set level. This is where the budget was also previously set.

Now, budgets are set at the campaign level, which allows Facebook’s system to automatically
adjust the budget and allocate more of it to better-performing ad sets in real time.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

 According to Facebook,

“We optimize your campaign budget in real time on an opportunity-by-

opportunity basis. Our goal is to get you the most results possible, and for
the cost of those results to align with your bid strategy.”

Pink Power | MARKETING AGENCY FOR DTC BRANDS

 WHY FACEBOOK IS SWITCHING TO
CAMPAIGN BUDGET
OPTIMIZATION?
Last year, strategists at Facebook noticed that advertisers were hitting a wall when it
came to making profits on their platform. They had also noticed that machine learning
could outpace what marketers could do manually.

So, in order to help advertisers improve their return on investment, Facebook decided
to create campaign budget optimization ads that would automatically distribute the
ad spend to top performing ad sets in real time.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

Pink Power | MARKETING AGENCY FOR DTC BRANDS
 CBO STRATEGY:
When you begin testing campaign budget optimization, you want to test with
winning products and audiences that are proven to convert.

Same goes with the ad creatives and copy – gather elements from previously
successful campaigns and use it to construct and test out new CBO campaigns.

It is best to start with at least 6 proven to work ad sets.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

 CBO BUDGET
The campaign works best with a bigger budget, it gives the system more room to
test budget allocations and ad placements.

Since you are advertising a winning product to a winning audience already, you
should feel more confident in using a larger budget.

We recommend starting with no less than $60.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

 CBO TIMING:
Timing should remain consistent with traditional ad launches.

Launch your campaigns at 3 a.m. EST and give them at least 1-2 days to stabilize their
delivery.

If you aren’t seeing optimal results at this point, don’t freak out.

Some advertisers saw results after about a week of waiting.

It’s important that you allow your CBO to learn with time and budget spending – but
also make sure you know your budget numbers and keep to your rules around killing off
bad performing ads.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

 CBO:
We’ve found it’s best to keep your ad sets number consistent for example if one ad set is not
performing well kill it and create a new one that is similar to the well performing ad set in a CBO
campaign in order to keep things stable.

Remember, after every adjustment you make you should allow the machine learning to adjust again.

If you begin seeing results with the $60/200 budget, then scale the budget up by 20%, or more,
depending on how much success you are seeing.

You increase the budget at the campaign level now, which gets distributed throughout the active
ad sets.

We’ve found you can scale a CBO campaign much more aggressively than old campaigns with a
budget at the ad set level.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

CBO:
I do want to warn – the data tends to look pretty depressing when the campaigns start off, so
don’t compulsively check the ads every single hour.

We recommend checking once in the morning and once in the evening. Remember, give the
system time.

The point of CBO is to lean more on Facebook’s machine learning than human interference. It’s
going to take lot’s of patience to let Facebook’s system do the heavy lifting but trust the
system.

With our experience, CBO has been extremely effective and has accomplished what Facebook
has intended to do.

We have profited on the front end which has allowed us to do way more retargeting and has
brought in more profit on the back end.
 CBO:
CBO also becomes more consistent as it scales, so kicking up the budget on a CBO campaign
affects the performance less than kicking it up on the ad set level.

Below is a checklist to guide you through constructing and launching your own CBO campaigns.

• Start with $60 a day budget

• Create at least 5 ad sets per campaign

• Target with large lookalikes audiences or niche interest (audience size 1-20M)

• Review the campaigns once in the morning and once in the evening• Scale by 20% if the ads
are doing well after 1-2 days.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

IN SUMMARY

The 2 biggest changes to note are:

The budget will be set at the campaign level
Facebook’s machine learning will be taking
over the heavy lifting
This is a new concept for all advertisers at the
moment, including us.
We will continue to update you as we discover
more insightful information.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

IN SUMMARY
In the meantime, you need to begin testing
out CBO’s of your own. Reference our steps in
this post and use the checklist we’ve made to
guide you.
Take winning ads that you already have
success with , and separate them into
campaigns based off of audience size,
targeting, and funnel stage.
This is your chance to get a head start and
learn what works best for you before having no
other options.

Pink Power | MARKETING AGENCY FOR DTC BRANDS

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