$7M+ in Ecommerce Sales with 21X ROAS using Facebook Ads
The challenge: to achieve 8-figure revenue in 6 months, through Q4, whilst maintaining a top of funnel ROAS of above 5X and blended ROAS with retargeting above 10X.
Want to see how we crushed that with 21X ROAS during November 2018?
November is said to be one of the toughest months of the year for online retail. But we found a winning formula and want to share that with you here.
If you’ve run ads on Facebook before, you’ll know, regardless of whether you’re selling a service or a product, scaling or maintaining profitability can be hard. Even harder if you’re trying to do both together. Throw in the challenge that Q4 brings (the last quarter of the year when retail sales explode due to the holiday period) then being able to spend a significant amount whilst maintaining a high level of profitability on your ads is extremely difficult.
The store in question sells ski and snowboarding apparel/gear with AOVs in the $200 range. Store owner, Linus, ran ads successfully himself previously but with a growing team and customer demand, wanted to bring an agency on board to take over and to accelerate growth and put the challenge to the team at SM Commerce. For a fairly high Ecommerce AOV this was a tall order but they had some crucial ingredients already in place: a great product and great understanding of their customer and lots of past history from the last 12 months of sales.
Here’s the low-down of what we achieved:
- 21X ROAS in November 2018 generating $7M+ revenue with $341K in ad spend
- 48X ROAS on Thanksgiving Thursday turning $5K ad spend into $240K+ in revenue
- $15M+ revenue achieved in 3 months
This doesn’t happen overnight and this case study will cover the foundations we put in place during September to quickly find audience and ads that worked and being in a position to test scaling in October. Without this foundation we would not have been able to achieve the 21X ROAS in November.
Below is the summary of the 9 biggest takeaways from this crazy campaign.
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1: THE FACEBOOK ADS SECRET SUCCESS SAUCE
Old fashioned marketing; the secret sauce to sustainable, fast-growth with Facebook ads.
Simple? Obvious? Great you’re ahead of many Facebook ads marketers struggling to create consistent results.
The barrier of entry to advertise on Facebook is so low, that simply boosting a page post allows anyone to advertise. Realistically, how many of your Page posts would qualify as an ad that addresses pain points, understands your avatar and creates a hook good enough to generate a click let alone a sale?
Facebook introduced Relevance Score in 2015 to grade your ads in the auction and followed it up with User Feedback in 2018, allowing Facebook users to rate a store’s buying and post purchase experience. A way of further grappling with poor quality user experiences and ultimately leading to account bans.
We used research techniques around the 5W Avatar which you can read in the full case study to help us focus on irrational decision making and focussing on what appealed to prospects to generate high conversion.
2: THE 21X PRIMER: FAST BITE-SIZED TESTING
With the creative direction for this store we kept things super simple and typically looked for 3 key elements – brand, personality and environment. We wanted a focus on the experience itself, the essence of the creative had to FEEL something – cool, fun, intriguing, and it needed to be clear that the brand was a snow/ski apparel brand, which we achieved through use of environment.
Here’s how we approached testing using the Graduation Framework:
- Setting up the campaign structure for rapid testing
- Fast paced testing at scale
- Used test insights to build ads ready to Scale
- We implemented the 3N Ads Formula to cut through the noise
- High output testing using ad impressions
3: THE LOW CPM TRICK TO MAXIMISE ROAS
An important update Facebook made in early 2018 was to shift to ‘meaningful interactions’ as a way of measuring post engagement. This meant posts which asked people to comment, or posts which Facebook deemed as low quality were penalised in favour of posts that gained quality engagement in the form of more than one word comments, with threaded replies amongst other things.
However, one shift that many missed was the impact on Page engagement – it’s a common tactic of low quality advertisers to create new Pages and start running ads against them with little regard for the page. In reality, a legit business is going to go to some lengths to ensure their Page is of good quality, sharing regular content and growing their fans following in a predictable way.
Find out more in the full case study download!
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4: SCALING PREDICTABLY & PROFITABLY
Going back before Q1 of 2018, the scaling techniques we used were more focussed on H-Scaling (horizontal scaling through duplicating ad sets and segmenting into age, gender, placements, devices, etc. with higher budgets). However, Facebook changed the game with the algorithm favouring ad set history and stability around Q1 2018 – including changing the previously required 25-30 conversions per week for a given ad set running a Conversion campaign objective, to now requiring a minimum of 50.
We use ‘soft scaling’ using rules like below and you can read more in the full case study.
5: GEO SCALING FOR FASTER GROWTH
Whilst not all Ecom stores can scale into multiple locations, many are probably not taking advantage of the opportunities to test new markets. In our case, we were able to work with the store owner in markets that they had translation capabilities in but also to test and validate new markets using English ad copy, website and the Euro currency as our main target was to scale in Europe.
A key part of our strategy was to implement our testing process into multiple countries.
Find out which Facebook tool gave us the edge in the full case study. When you’re scaling to 20-30 different countries, every optimisation matters!
6: HIGH ROAS CREATIVE USING MIND HACKS
Throughout testing we aim to ensure we don’t take our opinions or ideas from other accounts into new campaigns which may cloud our judgement. Instead, we’re always testing with audiences to see which ad format and creative work best and letting data dictate our decisions; with this account it was Collection Ads that blew the roof off of performance – to the tune of $153k in ad spend in November alone.
The full insights on this are in the full case study on the steps we took to find winners for our collection ads.
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7: UNLEASHING THE GT-CBO METHOD
Facebook introduced Campaign Budget Optimisation late 2017, into 2018 and at first, it felt like a way for Facebook to take even more control of your spend but perhaps not to your benefit. Indeed it took us many months to be convinced this was worth using. However, the truth is, whilst CBO is a decent feature, it’s not the tool that counts but how you use it.
What we discovered was:
- CBO was not good for simply testing ads. We initially tested CBO as a way of replacing elements of our Graduation Testing techniques. But it wasn’t stable enough in sending spend into the right ads. We couldn’t align our objectives with what CBO was delivering.
- CBO wasn’t a catch-all solution to drop multiple ad sets and ads expecting to scale up. Again it didn’t give us stability.
- CBO was unpredictable without manual overrides, in our case, pausing bad ads and ad sets.
So, if CBO was so volatile how were we able to scale CBO campaigns to $5-10K spend per day whilst delivering consistent results? And to do this in Q4 when CPMs were rising whilst maintaining high ROAS?
We figured out a winning formula which is in the full case study as part of the GT-CBO Method. We’re big advocates of CBO now which enabled us to scale fast from a few hundred dollars a day up to spending high five figures per day. Fast, stable increase of spend whilst maintaining ROAS too!
And in case you’re wondering – there was no manual bid in sight all the way through this crazy scaling period – find out why in the full case study!
8: 16X ROAS ON COLD TRAFFIC THROUGH BLACK FRIDAY
If the amazing performance above wasn’t enough, how about a 1600% ROAS for Black Friday? That’s $16 back for every $1 we put into Facebook ads spend without even factoring in retargeting sales!
Whilst we couldn’t predict how well the campaign would run, the success was by design. We did this in Q4 of 2017 as we did it each year before that. Not at this level of ROAS of course which requires many things to come together including low CPMs, a super slick sales funnel that converts highly and ads that cut through the noise. Oh and of course a product that creates DESIRE.
To give us the best chance of success when it came to black Friday A LOT of testing and planning went into it.
See more in the full case study on how that testing helped us cut-through the offers with promotions we KNEW prospects would love.
9: THE THANKSGIVING 48X ROAS TRICK
Our lead gen campaign generated a bombastic 48X ROAS on Thanksgiving Thursday whilst others waited until Black Friday to go big. Curious how we did it?
We blended a key FOMO tactic with our past knowledge of purchasing habits around Black Friday:
- Within apparel, selling out of your size during sales is the worst thing that could happen
- GOOD products will always sell out quickly during Black Friday.
This resulted in an overall ROAS from the campaign of 48X ROAS from an ad spend of about $5K dollars for lead gen resulting in $241K worth of revenue!
Find out more in the full case study!
As Facebook adapts to external factors the one constant to big success is focussing on a great User experience – because Facebook will always reward you for keeping their Users happy. This involves testing to find the right triggers for your audience and getting them from a passive state to creating desire which leads to action.
Conquering both the art and the science of Facebook marketing is the core of a high-scale, profitable campaign like this.
Managing fulfillment and logistics is one of the biggest challenges own label Ecommerce stores have, which makes dropshipping so much more attractive. But when you can own the brand experience from end to end and create products like no other, that’s when you’re able to create true blue ocean opportunity and stay ahead of the competition.
Facebook does require tactical shifts every few months as the platform matures and adapts, however most of what we do is based on marketing principles first then platform strategies and tactics second.
The biggest areas to focus on to win big with Facebook ads right now:
- Lots of testing to nail down your ideal customer and breaking down their barriers to purchase using persuasive marketing techniques and well thought out creative and copy.
- Better, meaningful Page engagement to attract lower CPMs.
- Using a structured approach to testing and scaling audiences and ads to create repeatable, predictable success to keep feeding your scaling goals.
- Ensuring your sales funnel is fast and slick because Facebook reward you for this with improved costs and reach.
- Experimenting with which scaling and profitability levers work for you business
- A product or service that solves a problem or enhances customers’ lives and figuring out how to get the message across to your prospects to create DESIRE whilst making it easy and informative to buy (and repurchase in future).
Big thanks to Linus and his DOPE team out in Sweden including the unsung heroes in customer care, fulfilment and marketing – the years of hard work in brand and product discovery you guys put in enabled SMC to come in and do the easy part to scale up.
And HUGE appreciation and thank you to the SMC team involved in landing this incredible performance: Dan (Strategist), Arnas (Media Buyer), Kate (Account Manager) and Ayah (Facebook Partner).