Best practices: Finding New Customers to your E-commerce with Facebook Ads

OPTIMAL PROSPECTING
FOR
E-COMMERCE ADVERTISERS
BY
ZALSTER.COM
v 1.0 - released 11/7-2017

CONTENT:
1. AUDIENCE STRATEGIES
2. CAMPAIGN STRUCTURE
3. BIDDING & BUDGETING
4. AD CREATIVE STRATEGIES
Before you start, make sure you have: 
1. A Facebook Business Manager
2. Implemented the Facebook Pixel

AUDIENCE STRATEGIES
FOR
PROSPECTING

CREATING THE FOUNDATION: 
CUSTOM AUDIENCES
There are a lot of ways to find new customers through
Facebook Ads. The quality on the various strategies
depends on the size of your customer database and
how your Facebook Pixel populations looks.
Our goal is to create a number of Custom Audiences
that we can use in order to create a number of potent
Lookalike Audiences - which are great for
prospecting.
If you need help with this, see this help article.

CUSTOM AUDIENCES
A Custom Audience can be created based on: 
Customer data 
Example: A list of all emails in your system.
Website trafﬁc 
Example: Everyone who’ve visited your website.
App activity 
Example: People using your app (if you have one).
Engagement on Facebook and Instagram 
Example: People engaging in your posts and Ads.

CUSTOM AUDIENCES
Let’s start with setting up a Custom Audience based
on the data you already have. If you have a list of your
customers, export it from your E-commerce system
along with as much information as possible, most
importantly the email address.
If you’re also able to add LTV per customer, which is a
qualitative metric - that’s great.
Then, upload this list as a Custom Audience in the
section called Audiences in the Business Manager.

CUSTOM AUDIENCES
If you have the Facebook Pixel implemented, along
with a couple of events (i.e. View Content, Add To
Basket, Initiate Checkout, Purchase) - you’ll be able to
create very powerful Custom Audiences.
The reason to why you want to create Custom
Audiences based on the events on your website is
because they can help you use relevant user data in
order to create Lookalike Audiences.
Example will follow on the next page.

CUSTOM AUDIENCES
Now we want to create a qualitative Custom
Audience based on the people who’ve made
purchases.
1. Visit Audiences
2. Click Create Audience (Custom Audience)
3. Click Website Trafﬁc
4. Set the settings as the screenshot below.

CUSTOM AUDIENCES
Let’s create a quantitative Custom Audience,
based on the people who added products to
their cart.
1. Visit Audiences
2. Click Create Audience (Custom Audience)
3. Click Website Trafﬁc
4. Set the settings as the screenshot below.
With a quantitative Custom Audience, we can
give Facebook much more (but less qualitative)
data on what people are interest in the
products in your shop.

CUSTOM AUDIENCES
Since the reason with this Custom Audience is to
utilize qualitative and quantitative data in order to find
new prospects, we want to maximize the amount of
data we base our audiences on. This is why we’ve set
the data window to 180 days.
As you see in the screenshots on the previous pages,
you can also utilize more detailed parameters to filter
out your more valuable customers or other user
specific data. This demands that you’re sending more
parameters through your Facebook Pixel.
180 
DAYS

CREATING 
LOOKALIKE AUDIENCES
Now that we’ve created some highly relevant Custom
Audiences, consisting of your existing customers or
visitors - we want to utilize them to find as relevant
prospects as possible. This is when we want to create
a Lookalike Audience.
1. Visit Audiences
2. Click Create Audience (Lookalike Audience)
3. Pick a Custom Audience that you’ve created.
4. Choose what country you want to prospect in.
5. Choose an Audience Size, varying from 1 to 10 %
of the total Facebook population in the country
you’ve chosen. If you want to keep it as relevant as
possible, you should pick just 1 % (which is pre-
defined).
6. Hit ’Create Audience’ and let it populate. Then
add it to a new Ad Set.

REMINDERS ABOUT 
LOOKALIKE AUDIENCES
A couple of reminders on how Lookalike Audiences
works and what to expect from it.
• The Lookalike Audience you create will only consist
of people living in the country/region you choose.
• A great way to find relevant prospects for a new
market is utilizing a Custom Audience in a market
where you have a lot of data.
• In a single Ad Set, you can choose several Lookalike
Audiences to be used. Although, if they’re big - it’s
often a good idea to split them up in different Ad
Sets.
• You must have at least 100 - 1000 people in a
Custom Audience to be able to create a Lookalike
Audience based upon it.

Use the Exclude Audience feature to avoid overlap in
Audiences you’ve created.
 
When you’re using the Custom and Lookalike
Audiences you’ve created, it’s very important that you
exclude them from the various Ad Sets they’re in.
RULE OF THUMB
In the Ad Set above, we’re using a Lookalike Audience for
Germany. Since it’s probably some overlap in the Lookalike
Audiences used in different active Ad Sets, we want to
exclude the one we’re using in the other Ad Set.

CAMPAIGN STRUCTURE
FOR
PROSPECTING

OPTIMAL STRUCTURE 
FOR PROSPECTING
There are of course a lot of ways to structure your
Campaigns and Ad Sets in Facebook Ads Manager.
What we’ve discovered is that many advertisers have
sub-optimal structures.
At Zalster, we’ve done research on what the most
optimal structure is - in order to maximize algorithm
efficiency.

CAMPAIGN STRUCTURE 
FOR PROSPECTING
If your goal is to maximize ROI on your prospecting,
regardless what country or audience the purchases are
coming from - use only one Campaign for each final
optimization goal (i.e. Purchases).
This is because we want to collect as much data as
possible in every Campaign, in order to maximize it -
but also to keep the account clean and not cluttered
with a myriad of Campaigns.
Example Campaign structure:
• Building Awareness
• Prospecting Purchasers
• Prospecting Lead Registrations
• Retargeting Purchasers

AD SET STRUCTURE 
FOR PROSPECTING
A Campaign for prospecting could have the following
Ad Sets and Settings. (This is just an example). 
 
Campaign name: Prospecting Purchasers 
Final optimization goal: Purchase 
• Ad Set: Lookalikes 1% - Germany 
Optimization Goal: Add to Cart 
Audience: Customer List Lookalikes - 1% - Germany
• Ad Set: Lookalike 5% - United Kingdom 
Optimization Goal: Purchase 
Audience: Customer List Lookalikes - 5% - United Kingdom
• Ad Set: Interest based - France, Germany, Italy 
Optimization Goal: Purchase 
Audience: Various Interest and Demographic Settings

• Double-check for audience overlaps 
Active Ad Sets in your Account should not have
overlapping audiences. Use the Facebook tool Delivery
Insights to see if you have overlapping audiences,
alternatively check manually.
RULE OF THUMB
WHAT IT SHOULD LOOK
LIKE WHEN VISITING
DELIVERY INSIGHTS

• Keep proper audiences sizes in your Ad Sets 
To broad or too narrow audiences can greatly hurt
volume, delivery and cost-efficiency. It’s difficult to set a
standard recommendation on audience sizes, since the
conditions are varied depending on industry, country and
advertiser.  
 
But - when prospecting and having Purchases as a final
goal, you should in the most cases try to keep your Ad
Set audience above 20 000 people. If you have more than
15% of a market’s population in your Ad Set audience,
you should probably narrow it to be a little more relevant.
But again, this is very individual. 
• Keep DPA/Retargeting in it’s own Campaign 
You can find more about retargeting best practices for E-
commerce in one of our other white papers.
RULE OF THUMB

BIDDING & BUDGETING
FOR
PROSPECTING

RECOMMENDATIONS FOR 
BIDDING & BUDGETING
Setting an optimal bid and budget in Facebook is a
task you have to face every day. This is why it’s
important to know what you’re doing - and why you’re
doing it.
The bid selection you can make in Facebook Ads are
currently: Auto bid, Maximum Manual Bid or Average
Manual Bid.
The budget selections you can make are: Daily Budget
or Lifetime Budget.

BIDDING & BUDGETING
When setting up new Ad Sets in a Campaign for
prospecting, we recommend that you set a daily
budget where you can afford at least 15 conversions
per day - given the bid you’ve set. This is because you
want Facebook’s algorithms to have sufficient volume
to make a qualitative optimization upon.
A low-hanging fruit:
Increase the conversion window to satisfy the
statistical volume that Facebook needs to do a proper
optimization. See the image below for recommended
settings.
>15 
DAILY CONVERSIONS

BIDDING & BUDGETING
If you (for various reasons) are having issues creating
or maintain an Ad Set with a satisfying volume, you
can use Facebook’s feature multi point conversion
which allows you to let Facebook worry about what to
optimize for (in terms of optimization goal).
 
See the screenshot below for how you could set up
your settings in order to optimize towards your
qualitative event (Purchase) as much as possible, with
link clicks or a quantitive event as fallback.

Bid your true value 
Facebook auction algorithms are built upon an
auction model which is optimal when everyone’s
bidding their true value of a conversion. Therefore,
start out bidding your true value of a conversion
and then change it thereafter - depending on the
current situation. 
Split Test bids 
Since it’s almost impossible to know what bid is
the most optimal, a good idea would be to split
test a couple of bids to see what gives you the
best results in terms of delivery and CPA/ROI.
RULES OF THUMB 
FOR BIDDING

Don’t change bids too often 
Every time a bid is changed, re-calculations are made
by Facebook algorithms. If you don’t really have to,
keep it unchanged until you really have to change due
to delivery or performance.
Don’t bid too low 
You will probably get a lot less delivery if you’re
lowballing the bid. Once again: experiment with split
tests.
Don’t bid on clicks or impressions 
If you’re optimizing towards clicks - you’ll get clicks
(and not as qualitative clicks as if you were optimizing
towards a real goal, such as purchases.) On the same
topic, don’t look at CPC or CTR when evaluating your
performance. Look at the actual CPA/ROI.
RULES OF THUMB 
FOR BIDDING

Don’t change budget too often 
Every time your daily budget is changed, some re-
calculations are made by Facebook algorithms. If you
don’t really have to, keep it unchanged until you really
have to change.
Re-allocate daily budgets between Ad Sets 
Be sure that you allocate daily budgets between your
Ad Sets in order to maximize the performance of your
total Campaign budget.
Consolidate placements 
Don’t split Facebook and Instagram (or Mobile and
Desktop) into different Ad Sets with their own
budgets. The average CPA will be lower if you keep
them in the same Ad Set and let Facebook algorithms
optimize.
RULES OF THUMB 
FOR BUDGETING

AD CREATIVE STRATEGIES
FOR
PROSPECTING

By using the ad format Collection Ads, you can
highlight your Product Catalogue in a more immersive
way, along with a hero image to give the user a more
branded experience. Try it out!
COLLECTION ADS

The biggest mistake advertisers are doing is having
bad Ad Creatives. And even worse, they’re not doing
anything about it.
The solution to this is to be really creative with the Ad
Creatives. Don’t just use plain product images - use
images where the products are in a context. Or use
image overlays to make the image pop.
Even better, use video to showcase your product -
instead of just having a static image.
BE CREATIVE!
BORING ALLURING

There are a lot of tools that can help you innovate
your current Video Creatives. One of these tools are
Cinemagraph by Flixel (not affiliated with Zalster).
Browse their gallery to
see what kind of
screen-popping ”images”
you can create.
You could also try adding overlays or ribbons to your
Ad Images, to see how that affects your Ad
Engagement, CPA and Relevance Score.
BE CREATIVE!

Test a lot of creatives 
There’s no idea being satisfied with a level of
performance. Always try to iterate and find better
performing Ads. This will also help you decrease
banner blindness, which can occur if you’re having the
same Ad Creatives in an Ad Set for a long time
(relative to audience size and delivery).
Have a proper setup of feeds and pixels 
Both for prospecting and retargeting, it’s important to
have a proper installation of your Pixel and your
Product Feed and Product Catalogue. This will help
you create and maintain healthy audiences and
product specific Ads.
Monitor Relevance Score & Negative
Feedback 
By analyzing the metrics Relevance Score and
Negative Feedback, which can be found in Ads
Manager (on Ad level), you can monitor the
development in order to make better decisions on
what kind of Ads to run.
RECOMMENDATIONS 
FOR AD CREATIVES

AUTOMATE & OPTIMIZE
FACEBOOK ADS
TRY 14 DAYS FOR FREE
AT ZALSTER.COM
v 1.0 - released 11/7-2017

Best practices: Finding New Customers to your E-commerce with Facebook Ads

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