Importance of using Facebook Ads for eCommerce companies

What is eCommerce advertising?

Ecommerce advertising is the act of placing paid content on an online or offline property. Online properties include a website, search engine, social media network, podcast, newsletters, or other interactive online property such as chat or instant messaging.

These paid messages allow you to reach people who may or may not have heard of your business and products. The goals of advertising campaigns can include everything from growing brand awareness to getting a direct response such as a newsletter subscriber, app signup, or a sale.

You should always test, experiment, and iterate on the ad strategy your business adopts. An advertising strategy or medium that works well for one eCommerce business may not work as effectively for another. It’s important to always be testing and measuring your return on investment (ROI) on each channel, both online and offline.

When starting out, it’s usually best to test one or two specific channels with a small budget. It’s always better to scale up a small budget on ads that are converting well, rather than start with a much larger budget and potentially waste a lot of money trying to figure out what works.

Facebook and Instagram ads

People spend an average of two hours and 33 minutes per day on social media. Facebook is the most popular at an average of two hours and 24 minutes per day, while Instagram averages 53 minutes per day. Much of this usage is mobile as well. In addition to being a destination where billions of people spend their time, social media networks provide a huge variety of ad formats and targeting options.

Facebook, for example, provides options to display image-based ads, video ads, lead ads (where you can capture the contacts information without them needing to leave Facebook, or even input any information), slideshow ads, dynamic product ads, and more. Because Instagram is owned by Facebook, you can also manage all of your Facebook and Instagram ads together in the Facebook Ads Manager interface. Facebook also provides a multitude of targeting options including interest, location, connections, behaviours, and much more. Like with all advertising channels, you’ll want to start with a small budget and experiment to find the format and audience targeting settings that work for you.

Similarly to display ads, though, the rising cost of advertising on Facebook and Instagram is creating a glaring issue for marketers as they try to grow their eCommerce business. In fact, costs for these channels have gone up 90 per cent year-after-year. While social media advertising will likely be a necessity for brands to grow their lists and acquire new customers, you’ll have to be strategic about your spending and balance the costs by optimizing owned marketing channels. By integrating your own customer lists to create lookalike segments, you can become more precise with your social targeting and increase the ROI of paid advertising.

If you’re running an established eCommerce brand with an existing customer list and a decent amount of web traffic, the best place to start is to build a custom audience and a lookalike audience.A custom audience allows you to upload a list of target people on Facebook who have visited your website (via the Facebook tracking pixel). Because they’re already familiar with your business, you have a much higher chance of converting them than somebody who has never heard of you before. You can also segment these audiences based on whether or not they have purchased from you before, allowing you to further customize your messaging.

A lookalike audience, on the other hand, is an audience that’s dynamically generated based on Facebook’s algorithm. This is an extremely powerful way to reach new people who match the same audience characteristics as one of your custom audiences. For example, let’s say you pull a list of 1,000 of your highest LTV customers. Facebook can run that list against their algorithm, determine what common qualities all of these people have in common, and then find new people who also meet those qualities who may not have heard of you before. This is much more effective than targeting based on demographics or behaviour alone.