Facebook Ads Ecommerce Case Study: Reducing Ad Costs By 50% AND Scaling, Too 🤝

Step 3 below is often the one that catches most people out… and most don’t even do step 4!

Problem: An Ecommerce brand’s best-seller stopped producing results and needed stock shifted from the warehouse.

Solution: Full sales recovery and profitable growth in under 30 days 💸

Process:
(those familiar with The BPM Method will already know this)

  1. Identify strengths that need amplifying and weaknesses that need fixing across the CORE-4 pillars
  2. Build an avatar from which you can identify new angles, audiences, copy and creative
  3. Create a test plan like the one attached
  4. Test in separate campaigns to find winning ads/audiences
  5. Optimize in a prospecting campaign ahead of scaling
  6. Launch retargeting
  7. Rinse and repeat steps 3, 4 and 5.

Easy and simple right? Let’s go a level deeper.

How We Recovered A Top Selling Product After Month’s Of Failure To Create Stable, Profitable Growth Again

If you’re selling multiple products in a single Ecommerce store, getting the balance right between which products to focus on and which to cut loose is a common challenge. 🤔

That’s the same challenge we had recently with an Ecommerce client that had a £9 CPA (cost per acquisition) goal on Facebook ads with a particular product that used to perform well but struggled ads were stopped because of lack of profitability. They approached us to see if we could recover performance.

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Product: Pet niche

AOV: £20-25

Target CPA: £9

(CPA more important than ROAS for this client because, and take note: lifetime value and future repurchases)

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PAST RESULTS

Previous spend: £268,328

Best CPA: £7.33

Recent CPA: £11.42 (trailing 4 months)

At £11.42 it was both no longer profitable and there was the issue of clearing out warehouse stock, too.

You could always bundle it as a free offer with another product and cut your losses, or, in this case, try and revive a previously strong selling product to get it profitable again.

Of course we took the second option…

Below’s the exact process we used (the same we use for new products as well as product sales recovery like this).

This is for advertisers and Ecom business owners alike:

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STEP 1) ANALYSIS & PLANNING
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We conducted an Advertising CORE-4 (AC-4) analysis to identify the areas of strength and weakness along the four critical pillars of every successful ad campaign:

> Product
> Audience
> Offer
> Funnel

They’re the 4 fundamental pillars (CORE-4) of any ad campaign that you need to get right regardless of selling on Facebook or another platform.

In fact these were foundational even before the internet was created and they’ll continue to be way beyond Facebook’s existence in the year [redacted] .

Here’s how we graded each of those 4 pillars:

Product: Clear problem solver
Grade: 5/5

Audience: Strong history of pixel data, past customers and research into potential prospects based on previous 12 months of ad campaign and sales database data.
Grade: 5/5

Offer: Ads conveyed a strong clear message but had not been rotated/tested much over that period so highly saturated and missed opportunites.
Grade: 3/5

Funnel: High initial conversion rate and strong landing page design, fast loading and easy checkout.
Grade: 4/5

Total Score: 17/20

So what does that all mean?

We know from having run thousands of campaigns on Facebook that an AC-4 grading of 17 or more out of 20 means a product/brand is in a strong position for scaling.

Below this level and you have foundations that need fixing/improving before pushing more ad spend.

Think of it like a ‘score’ of how leaky a bucket is.

The lower it is the more leaks you have and the quicker the water will exit your bucket before you make it from the well to your house.

Looking at the CORE-4 the main areas to improve were the Offer, which contains ad angles, copy, creative and lander as the ‘offer’.

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STEP 2) TARGET AUDIENCE & MESSAGING SKN
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The next part of any successful campaign is the avatar building process.

The goal is to identify product benefits, features and potential barriers to find new ad angles, creative ideas and copy.

Our avatar model consists of identifying Who we’re targeting, What the product proposition is, the emotional ‘why’ behind reasons to buy, the functional ‘why’ and the ‘why not’.

That’s 5 ‘Ws’ and creatively we call this The 5W Avatar to make it easy to remember (!).

Outcome: new ad angles, new audiences, new copy ideas and new niches.

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STEP 3) CREATING A TEST PLAN
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Now we had our key areas to improve from our AC-4 and our ad angles from our 5W Avatar, we built out our ad campaigns into the first set of test campaigns as you saw earlier.

Once the 5W Avatar is generated and we have our emotional triggers and product benefits, we merge that with the product features (i.e. the ‘logical’ reasons someone might buy) into an ad that might follow this kind of copy format:

Headline: ANGLE + KEY BENEFIT

Hook: ADDITIONAL KEY BENEFITS

Connector: KEY FEATURES

Close: CALL TO ACTION

The ad copy might look like:

Tired of [painpoint]? Imagine being able to [new outcome]!
As [avatar] ourselves we know how it feels to [painpoint] which is why we created [product]!
[ benefits ]
[ features ]
[ call to action ]

This simple formula helps create many of our test ads, plugging from the avatar sheet straight into a copy template into our GT Phase 1 and 2 testing as described below.

At the testing stage you don’t need to go all out on the copy, if you’re yet to find the best angle, audience, creative etc, but you need to start somewhere and this template serves us well.

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STEP 4) GRADUATION TESTING
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Graduation Testing (GT for short) is our methodology of using small budgets to test a wide range of audiences and creatives.

The idea is to simply have separate ‘sandbox’ campaigns for testing purposes only.

Input: audiences, copy, creative, ad formats, angles

Output: test campaigns, ad sets and ads

Budget: we started with £300/d but that depends on what you can afford to test
(reminder a test budget is a test because you’re not tied to ROAS/CPA goals at this point. It’s an investment in learning).

Testing steps:

GT Phase 1: these campaigns are to help identify the best audiences. In the case of this account, we had existing ads we tested against newly created audiences to start with (as well as being armed with new ads).

GT Phase 2: these campaigns are designed to take our best audiences and test new creatives (ad format, visual, copy, lander) to find new variations.

GT Phase 3: these are campaigns that have been tested in Phase 1 and/or Phase 2 that are in the prospecting cycle (where we look for stability before scaling).

Once an ad set/ad combo has made its way to GT Phase 3 we work on optimization and stability of 2-3 days before we look at scaling (building confidence in what we have graduated through our test system and iron out any ‘luck’).

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STEP 5) CAMPAIGN OPTIMIZATION USING MANUAL BID
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We tested Automatic Bidding and Cost Cap manual bidding to maintain both low cost CPA and stability in the auction as CPA was more important for this account to prove we could sustain volume and low costs whilst the Client worked on improving AOV (average order value).

I personally find with CPA/CPL based goals, manual bid is generally more reliable so I’m more likely to test manual bid quicker than I would if I’m going after return on ad spend a (ROAS) since you need to work on your average order values a lot more, too.

GT Phase 3 Prospecting Campaign: Broad & Lookalike Audiences (Cost Cap)
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After successfully testing a broad audience within a certain age range and gender, we extracted and graduated the audience from our GT Phase 1 and 2 campaigns into its own

Cost Cap GT Phase 3 campaign.
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This allowed us to maximise cost efficiency by achieving purchases below our target CPA.

Taking into consideration our target cost, as well as the data we gathered, we created ad sets within this campaign with varied cost cap targets

Adset 1 Cost Cap: £6.75 (25% below target)

Adset 2 Cost Cap: £9 (target for testing)

Adset 3 Cost Cap: £11.25 (25% above target)

Unfortunately, setting a cost cap at £1 CPA is unlikely to see spend and results as much as I’d like to hit those numbers!

WINNER: £9 Cost Cap saw the most in spend and most profitable results (£8.64).

The higher cost cap was unprofitable and the lower cost cap failed to spend so we’d tighten the boundaries in our next test round.

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STEP 6) INFINITY RETARGETING LAUNCH
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After 2 weeks of testing and ready for scaling AFTER we’d launched our COLD/top of funnel ads (and therefore had traffic to retarget), we launched our retargeting campaigns.

Our retargeting strategy takes advantage of Dynamic Content Optimization (DCO) which allows you to split-test faster with smaller audiences.

Whilst there are limitations such as not being able to share social proof as easily as you would with a standard ad, we’ve found using DCO’s split test feature, plus our 5W Avatar a winning formula for creating evergreen retargeting ads – hence the name: Infinity Retargeting.

This is because, given a small audience like those that have viewed a product or visited the cart page in 7 days, that audience refreshes every day.

Using DCO keeps ad fatigue low because Facebook cycle-in new ad variants each day and our researched ads (based on our avatar/copy building) means we have some pretty decent angles and ads.

This alone has proven time and time again to produce amazing CPAs. Go try it!

Our retargeting campaigns which brought in a bulk of sales hit CPAs of close to £6.

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30-Day Transformation Complete 
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At the end of the 4 weeks of testing, optimisation and scaling, we contributed to selling over 4,000 units at a total CPA of £8.15, achieving our target of reaching profitability at scale.

Furthermore, after the initial 4-week sprint, we managed to continue optimizing, bringing the CPA down further to £7.89 delighting the client and allowing us to prove how our simple recovery process for products with existing sales can be so powerful.

Feel free to ask questions below in the comments.

If you need help recovering Ecommerce product sales, launching or scaling visit smcommerce.co.uk and book a call with us today.

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