Jay Stampfl: Facebook Ads and How to Make Them Work for You

Posted by on Apr 19, 2017 in Social, The PPC Show [Podcast]
Jay Stampfl: Facebook Ads and How to Make Them Work for You

Since its launch, Facebook Ads have become one of the most powerful customer acquisition channels.

Most marketers agree: 78% of them are satisfied with their Facebook ads.

Given 71% of all Internet users are on Facebook, you can’t deny its power.

If you have more experience with other paid channels, most likely Google Adwords, you may find it hard to grasp at first.

You may even find some of the more advanced advertising strategies counterintuitive.

Facebook Ads and How to Make Them Work for You

To make your life easier, we brought in someone who knows all the ins and outs of Facebook Ads: Jay Stampfl. Jay went from being an intern at adBrite and an anthropologist running around the jungles of Costa Rica, to become the CEO of BlackBird PPC, the digital advertising agency he founded in 2016.

Throughout this PPC Show episode, Jay, an expert in paid search, paid social, and programmatic display, gave us many interesting ideas on how to make Facebook Ads work for you.

Attribution

The effectiveness of Facebook Ads and its impact on the final result (whether that’s a lead or a sale) differs mainly based on which kind of company uses it. The way Facebook Ads work for a B2C company is much different than for a B2B one.

If you have an e-commerce store and you sell products directly to consumers, like fashion or home decor, it will be easy for you to track how much each click is worth to you. Given the shorter sales cycle, which in many cases happens within one session, the impact of the final sale can be easily analyzed. If you use Google Analytics’ attribution reports, you will see how much your Facebook Ads’ influenced the final sale.
In other words, for B2C companies, the attribution modeling works.

The situation changes drastically if you use Facebook Ads for B2B sales cycles. In stark contrast with B2C sales, the problem with Facebook Ads lies in its impact on the final result and its correct attribution.

With B2B sales, the value of a click dilutes through the funnel, as it’s longer and more complex. It’s hard to add the right attribution to it. If a prospect finds your company after she clicks on one of your ads, and the company ends up purchasing a contract worth thousands of dollars six months down the line, that ad was worth thousands of dollars. The problem is, you will never be able to know that given the long time-frame and the complexity of the sale process.

Not everything is lost, however. Even if you run Facebook Ads campaigns and these ads don’t make your visitors convert directly, you can get a lot of awareness as well as it can help you get referral traffic and word-of-mouth.

Bidding

Bidding optimization can be one of the hardest things any marketer can do to improve their paid campaigns. On the one hand, bidding can help you maximize your spending while giving you the best results. On the other, if you bid incorrectly, you can lose a lot of money fast.

Compared to Google Adwords, the Facebook Ads bidding system is much more difficult to grasp. Google Adwords’ bidding system is logic-based, that is, you bid based on the user’s queries and the value of the click is worth to you. Facebook, on the other hand, is much more dynamic, which makes it more difficult to bid on.

To start, Facebook’s algorithm throws marketing logic out the window. For example, if you raise the bid of an ad on Facebook, you will get higher quality users, which means the relevance score will increase, helping you get more clicks and lowering the CPA. With Adwords, if you bid up, your clicks go up just as your CPA goes up. That change in the logic behind the bidding system can make Facebook Ads much harder to manage.

Just because the Facebook bidding system is harder to understand compared to Google Adwords, that doesn’t mean it doesn’t work. On the contrary, you only need to select the correct bidding system for your goal. Once that’s done, Facebook will do a good job of assessing how to put your ad in the auction based on the bidding method you are using.

Even though there are no “best bid types”, you should choose one over the other one depending on the goal of your campaign.

  • CPM: For some, highly unreliable and ineffective. But it can work if your goal is awareness (i.e. you want a lot of views to your ad so people get to remember your company)
  • oCPM: This is the standard bid type for all Facebook ads. In a way, it works like a mix of CPM and CPC, so you can use it for build awareness, bring traffic to your site, or even get conversions.
  • CPC: The one you must be most familiar with. Works best for traffic-related goals and, in some cases, to action-related goals (e.g. app installs).
  • CPA: As the name suggest, you pay per action, whether that’s a sale, a lead, or whatever you have defined as one. Works best when your Facebook has a lot of data to optimize for (see next for more information).

The Algorithm

The Facebook algorithm (and its bidding system) likes optimizing with lots of data. As a consequence, you need to spend money before you get any results. That way, the Facebook algorithm can get all the data it needs to optimize your campaigns.

This is why when you create a Facebook Ads campaign, you need to target large audiences. Jay likes targeting with an audience of at least 1 million. He likes optimizing with oCPM and Conversion goals to hit 20 conversions a day, so Facebook can get all the data it needs. If he doesn’t get those conversions, he moves the conversion up the funnel. This means, instead of focusing on conversions you would focus on a click or even on impressions.

That way, Facebook can optimize their whole algorithm better.

Account Structure

Before you start optimizing your bidding, you need to have a good account structure. If you have thousands of ads per ad group, Facebook’s algorithm won’t be able to optimize their bidding for them. This means you need to add some level of granularity and segmentation to your campaigns.

Each structure differs considerably based on the campaign goal and business.

For example, if you have an e-commerce store and you want to increase your sales, you could segment each ad campaign based on your products. One campaign would focus on shoes, while another one in bags, and so on.

On the other hand, if you have an agency and you want to increase your lead acquisition, you could segment your campaigns based on the kind of client you are trying to target. You would have one campaign focused on large businesses with more complex sales cycles, and you would have another one focused on smaller businesses with shorter cycles.

Once you select the goal that works best for you, you would repeat the same process with ad groups and individual ads.

With the former, you would create specific ad groups that target one segment from your campaigns. You can use custom and lookalike audiences to help you out.

With the latter, you would create ads that talk to specific individuals. You can use different ad texts and images to see which one rings best your audience.

The key of a good account structure, then, lies in being ultra specific with your targeting. The lower you get with your campaigns, the more specific you should be.

This account structure will allow Facebook to optimize your campaigns better for each of your goals.

Ad Testing

If there’s one thing you are likely to take from this article is Facebook Ads can be tricky. Testing on their platform isn’t any different.

Just like with any test, if you develop a test within an ad group with three ads, one is going to perform great, and the other two won’t. That’s how A/B testing works.

In a normal situation, you would then pause the ad group, take the ad that’s performing and create a separate ad group to test it even further. Unfortunately, this is doomed to fail.

As you already know, Facebook’s algorithm needs lots of data in it to optimize bids. Once you take the winning ad to a new ad group, you will be resetting the data in the algorithm. This means, the “winning” ad will likely perform worse than before.

Remember, Facebook loves historical data. That makes the A/B testing environment for Facebook Ads so tricky. That’s why Jay recommends sometimes the best you can do is kill the good ads and start fresh.

The good news is, losing a Facebook ad test doesn’t mean that ad is bad. Sometimes it’s just a matter of bad historical data, not a bad ad or targeting.

Hire for Quality, not Fame

Even if you follow all the tips laid out in this article, it’s easy to get confused or lost with all the complexities of Facebook Ads. That’s why in many cases the best thing to do is hire an agency that takes care of your whole Facebook Ads account.

The problem is, many times companies hire the wrong agency.

If you want to hire a great PPC agency, hire one that has the most experience and that is willing to work directly with you. Most businesses that run paid ads need help with the management campaigns. Given the amount of agencies and consultants out there, businesses have many options to pick from. Unfortunately, many businesses have a small budget. This in itself isn’t a big deal. The problem is many times they end up making one of the following mistakes:

  • They hire someone cheap and has little experience;
  • They try to hire a large famous agency that will put an inexperienced account manager.

The problem with the former mistake is they then get little to no results since the agency or consultant doesn’t know what they’re doing.

The problem with the latter, according to Jay Stampfl, is that these agencies end up assigning them a 23-year old who has little experience in the industry. That results in mediocre results, similar to the company that hires a cheaper but still inefficient consultant.

Jay recommends going for smaller agencies, like BlackBird PPC, that are going to put their best people upfront without charging top dollar. Still, you need to invest to get high-quality PPC management. Even if your budget is low, the saying “you get what you pay for” holds true for PPC.

Want to more from Jay Stampfl? Follow him on twitter or listen to the whole episode below:

 

 

Ivan Kreimer

Ivan Kreimer is a freelance content writer that helps SaaS business increase their traffic, leads, and sales. Previously, he worked as an online marketing consultant helping both small and large companies drive more traffic and revenue.

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