August 30th, 2018

Guide to Facebook Advertising for Ecommerce Stores

Learn why you should advertise your ecommerce store on Facebook and the different advertising options available to you.

Succeeding with Facebook advertising is all about showing the right message to the right people. This guide will take you through your options for reaching different audiences, both finding new audiences and re-targeting people that have already engaged with your business, and your options for crafting the message or ad. At the end of each chapter we have included links to our recommended how-to resources.

The guide is divided into 7 chapters:

  1. Top reasons to advertise your ecommerce store on Facebook
  2. Choosing the objective of your advertising on Facebook
  3. Targeting new audiences for your ecommerce store
  4. Re-targeting people that have interacted with your online store before
  5. Facebook ad formats for your online store
  6. Deciding budget and how, when and where to show your ad
  7. Final note

1. Top reasons to advertise your ecommerce store on Facebook

Your audience is on Facebook

Facebook has massive reach with over 2.2 billion monthly active users, which makes it the most popular social network worldwide. To put the user number in perspective, the most populous country on earth, China, has a population close to 1.4 billion. Regardless of who your customers are, they are likely using Facebook and with close to 1.5 billion daily users, chances are your customers are using Facebook on a daily basis.

Great targeting capabilities

Despite Facebook’s massive reach, their advanced targeting capabilities enable you to reach your exact audience. You can base your Facebook targeting on demographics, location, interests and behavior. You can also use more custom functionality such as targeting people that have visited your website or engaged with your Facebook posts.

Not only is your audience on Facebook, the advanced targeting functionality allows you to reach those you want to reach.

Numerous ad solutions to suit your needs and objectives

There are numerous ad solutions to choose from on Facebook. You can create ads directly from your Facebook page by e.g. promoting your page, boosting a post or adding and promoting a call-to-action button on your page. The more advanced ad solutions are accessed through Facebook’s Ads Manager and include advertising objectives such as lead generation, conversions and brand awareness. Facebook also allows you to choose from different ad creatives, such as images, videos or slideshows.

Regardless of your objectives, there are ad solutions that will fit well with you objectives. The sheer number of possibilities can seem daunting, but that is also what makes Facebook such a versatile advertising channel allowing you to optimize and choose what works best for your specific business.

Facebook is a great channel for Ecommerce stores

Facebook has several advertising functionalities that are especially well suited for an Ecommerce business. One example is to use your existing customers to help you find new customers. Facebook lookalike audience allows you to target people that are similar to your best customers, so that you can increase conversions and sales. We go through this in detail in our post how to increase your Ecommerce sales using Facebook lookalike audiences.

Another example of useful functionality for Ecommerce stores is to target people that have already interacted with you on Facebook. Converting people that are aware of you, but not yet customers, is an easy win and great way to increase your sales. Read more in our blog post how to increase your Ecommerce sales by targeting people that have shown interest in you on Facebook or Instagram.

Organic reach on Facebook is declining

There are more than 80 million Business Pages on Facebook. As more and more businesses join Facebook, they generate more and more content, and that means it may be more difficult for you to reach your desired audience with organic content. Recent studies have shown that organic reach on Facebook is declining and relying on only organic content is unlikely to be sufficient.

To ensure that your content reaches your desired audience and future customers, use paid advertising on Facebook.

Conclusion

Facebook is the most popular social network worldwide. Your audience is on Facebook and with the targeting capabilities, you can reach exactly those you want to target with your advertising. There are many options when it comes to advertising objectives and creatives, which allow you to pick and choose what works best for your audience. Facebook is a great channel for your Ecommerce store with several solutions especially well suited for online sales.

Getting started with Facebook advertising is easy, check out our how-to resources below for detailed instructions.

If you have already set up your Facebook advertising account, you can jump straight to chapter 2. Choosing the objective of your advertising on Facebook.

How-To Resources

You can advertise on Facebook either through your personal Facebook account or by setting up a business manager account. We recommend that you set up a business manager account for two main reasons:

  • Manage all your assets, such as Facebook page and Instagram account, in one place.
  • Functionality to manage user access and permissions, which enables you to have multiple people working on your advertising accounts.

To get started, use the Facebook step-by-step guide to set up Business Manager.

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2. Choosing the objective of your advertising on Facebook

The first thing you will need to do when setting up a new campaign on Facebook is to choose the advertising objective. The objective is what you want people to do when they are exposed to your ads.

The objectives to choose from are divided into three main categories:

  • Awareness: choose this goal when your objective is to generate interest in your product or service. You can choose either brand awareness or reach as an objective in this category.
  • Consideration: these objectives are about getting people to start thinking about your business and to look for more information about it. The available objectives in this category are: traffic, engagement, app installs, video views, lead generation and messages.
  • Conversions: these objectives encourage people to purchase or use your product or service. The available objectives are conversions, catalog sales and store visits.

Choose campaign objective

The objective you choose will affect the different options available to you for setting up the rest of your campaign, such as ad formats and when you are charged for your ads. For example, if you choose the brand awareness objective, Facebook will charge you for impressions, i.e. every time your ad is shown. If you instead choose the traffic objective, you can choose whether you want to be charged for impressions or every time someone clicks your link (CPC).

The most relevant objective for you is likely to change as your business grows. You could start out looking to build brand awareness and then in time switch to conversions. Make sure you choose an advertising objective that is aligned with and that will help you achieve your current business goals.

How-To Resources

Check out Facebook’s guide: choosing the right advertising objective

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3. Targeting new audiences for your ecommerce store

Succeeding with Facebook advertising is all about showing the right message to the right people. This chapter focuses on finding the right people and will take you through the different targeting options for finding new customers.

In the next chapter, we continue the focus on finding the right people and will take you through re-targeting people that have interacted with your online store before

To find new audiences, Facebook offers three main options that we will go through in this chapter: basic targeting, detailed targeting and connections targeting.

1. Basic targeting

  • Locations. Target ads to people based on their location, e.g. country, zip code or city. You can choose between either including or excluding people from a certain location. You can also choose whether to target everyone in a certain location or people who live there, who were recently there or who are traveling there.
  • Age. Target ads to a certain age range.
  • Gender. Target ads to women, men or both.
  • Languages. Target ads to users of a certain language.

Basic targeting

If you are running an Ecommerce store selling women’s shoes, for example, make sure you target women in the right age range and location for your products. The more relevant the audience is, the higher your click through rate will be, and the more effective your campaigns will be.

2. Detailed targeting

Detailed targeting allows you to include or exclude people from an audience based on:

  • Demographics
  • Interests
  • Behaviors

Including people creates a broader audience, also known as “or” targeting, where any demographics, interests or behaviours you choose from the list will make the audience larger. Excluding people creates a more narrow audience, also known as “and” targeting where any added parameters make the audience smaller.

Detailed targeting

Demographic-based targeting

In addition to the basic demographic targeting options above, you can target more detailed topics such as education, workplace, job title and relationship status. You can either type directly into the search box to see a list of relevant options, click suggestions to see what Facebook suggests for you, or otherwise click browse to see all the different categories.

One demographic topic that could be especially interesting to target for an online store is life events. You could, for example, target newlyweds or newly engaged and create a special offer and campaign for them (Demographics > Life Events > Newlywed / Newly engaged).

Interest-based targeting

Interest-based targeting allows you to target people based on what they are into, such as hobbies, activities and pages they have liked.

For an online store, this is a useful tool to find people that are interested in your specific products. If you sell handbags, for example, you can target people that are specifically interested in handbags (Interests > Shopping and fashion > Fashion accessories > Handbags).

Behavior targeting

Behavior targeting allows you to reach people based on their purchase behaviours, intents, device usage and other activities. You can target, for example, “engaged shoppers”, which Facebook describes as people who have clicked on the call-to-action button “shop now” on Facebook in the past week. (Behavior > Purchase Behavior > Engaged Shoppers) You could also target people based on travel, such as commuters and frequent travelers.

3. Connections targeting

Connections targeting allows you to target people that have a connection to your Facebook business page, app or event.

For each of these three, you can choose to either include or exclude people. You can, for example, choose to include people who like your page and friends of people who like your page, but to exclude people who used your app.

Connections targeting

The connections targeting will include only people who also meet the other targeting categories you have selected.

Potential audience size and reach of your campaign

As you add or remove targeting, you can track the size of your potential reach on the right side of the page. A more narrow targeting implies that you are targeting more relevant people and should achieve higher click through rates and more effective campaigns. However, make sure you don’t limit the reach of your campaign too much. The best way to achieve results is to experiment with targeting and audience size to find what works best for you.

Potential Audience size

How-To Resources

Facebook has a useful guide on how to target audiences with Facebook ads.

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4. Re-targeting people that have interacted with your online store before

In this chapter, we will go through how you can target people that have engaged with your business before, essentially re-targeting.

Re-targeting on Facebook is done by creating custom audiences, which we will go through first. Thereafter, we will also go through lookalike audiences, which are basically audiences that are similar to source audiences that you define.

Facebook custom audiences

Custom audiences allow you to target people that have interacted with your business in some way. You can create these audiences either from information that you provide, such as a list of your existing customers, or from information generated by Facebook’s own products.

There are five main ways to create a custom audience that we will go through briefly:

  1. Customer File
  2. Website Traffic
  3. App Activity
  4. Offline Activity
  5. Engagement

Create custom audience

1. Customer File

The customer file option allows you to create a custom audience based on your existing customers that are matched with people on Facebook. You can upload the customer file to Facebook as CSV or TXT. There are 15 different identifiers that you can use in your customer list, the most common ones are email and phone number, but you can also include information such as names, date of birth and location. Once you have uploaded the information, Facebook will match it information with Facebook users to create a new audience.

For an online store, this is a great option to use if you want to target, for example, users that have signed up for your newsletter but that have not yet bought something from you. Take the list of email addresses that subscribe to your newsletters, but that are not yet customers, and upload it to Facebook. You can then target these people both through email and Facebook advertising.

2. Website Traffic

This option allows you to create a custom audience with people that have visited your website or that have taken specific actions on your website. Note that installing the Facebook pixel is required to create an audience based on website traffic. Read more about the Facebook pixel. If you have the pixel installed, you can create an audience based on several different criterias:

  • All website visitors
  • People who visited specific web pages
  • People who visited specific web pages but not other pages
  • Visitors by time spent
  • Pixel events

This type of custom audience enables many interesting scenarios for an ecommerce store. It could, for example, be effective to target people who recently completed a purchase with attractive offers or to target customers that have previously completed a purchase but not visited the store for some time.

3. App Activity

The app activity option enables you to create an audience of people who have taken a specific action in your app. Note that you first need to register your app with Facebook and set up app events. See Facebook’s guide to App Ads.

There are 14 standard app events that you can track and base your audience on. The events especially relevant for an online store are most likely:

  • App opened
  • Added payment info
  • Added to cart
  • Initiated checkout
  • Purchased

You can also combine different events to create very specific audiences. As an online store, you could, for example, create a custom audience with people that have added an item to the cart and not come back, i.e. people that have abandoned the cart. You can then target these people on Facebook in the same way that you would target them with an email campaign.

4. Offline Activity

The offline activity is relatively new on Facebook, launched around September 2017. This enables you to target people on Facebook that have interacted with you offline. You can either upload a CSV file with offline customer information or if you are using one of Facebook’s partnerships systems offline, such as PoS or CRM, you can upload events directly from that system to Facebook.

If you have a physical store in addition to your online store, this could be a great tool to integrate your offline and online audiences. If you are purely an online store, this audience option is not so relevant for you.

5. Engagement

The Engagement custom audience allows you to create an audience with people that have interacted with your content on Facebook. You can base the audience on people that have engaged with you through your:

  • Facebook business page
  • Instagram business profile
  • Videos on Facebook and Instagram
  • Lead form ads on Facebook and Instagram
  • Facebook events
  • Collection ads or Canvas ads on Facebook

The engagement option can be really interesting for an ecommerce store and we have a separate post on how to set this up: how to increase online sales by targeting people that have interacted with you on Facebook.

Facebook lookalike audiences

Lookalike audiences allow you to find people that look like or are similar to a certain audience that you define. A lookalike audience is created from a source audience and finds people on Facebook who are the most similar to people in that source audience.

Lookalike audiences can be based on the following three source audiences:

  1. Custom audience: use the custom audience that you have created to target new users similar to that audience.
  2. Website visitors: this requires that you install the Facebook pixel. Once installed, you can target audiences that are similar to people that have visited specific pages on your website.
  3. Page fans: this allows you to create a lookalike audience similar to people that like your page.

In addition to the source for the lookalike audience, you can specify locations and the audience size.

Create Lookalike Audience

The audience size determines how similar your lookalike audience will be to your source audience and ranges from 1% to 10%. An audience size of 1% means that you will target the 1% on Facebook that are the most similar to your source audience. This will give you high similarity and low reach. An audience size of 10% means higher reach, but lower similarity.

For an ecommerce store, lookalike audiences is a powerful tool that can be used to target people that are similar to your best existing customers to increase your conversions and sales. Read more about this in our post how to increase your Ecommerce sales using Facebook lookalike audiences.

How-To Resources

We have written two articles on how to use Facebook custom and lookalike audiences to increase your ecommerce sales. These articles take you through more in detail why you should use lookalike and custom audiences as an ecommerce store and has step-by-step instructions on how to set them up.

How to increase your Ecommerce sales using Facebook lookalike audiences.

How to increase online sales by targeting people that have interacted with you on Facebook.

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5. Facebook ad formats for your online store

In the previous two chapters we have gone through the different targeting options on Facebook that are all about finding the right people. In this chapter we will focus on the message or ad itself.

Facebook has numerous different ad formats. We have divided them into three categories that we will go through in this chapter:

  1. Main ad formats
  2. Ad formats for specific objectives
  3. Ad formats for Facebook page and posts engagement

1. Facebook’s main ad formats

There are five main ad formats on Facebook:

  • Image: this is a single image ad with recommended size 1,200 x 628 pixels, a text description, headline and link to your website. See the Facebook guide for image ads
  • Video: this is an ad containing a video with recommended length up to 15 seconds. Similar to the single image ad, you should also include a text description, headline and link to your website. See the Facebook guide for video ads
  • Carousel: the carousel ad shows a minimum of 2 and up to 10 images or videos in the same ad, each with its own link. For an online store, this is a great format as you can display several different products and Facebook can automatically optimize so that the best performing products are shown first. See the Facebook guide for Carousel ads.
  • Slideshow: slideshow ads create a video-like experience using up to 10 images. Slideshow ads are more lightweight and load faster than video ads, and can also be simpler and less expensive to set up. See the Facebook guide for video ads that also apply to the slideshow ads.
  • Collection: collection ads are made specifically to encourage shopping and include one cover image or video followed by at least four product images allowing people to browse several of your products in the same ad. See the Facebook guide for Collection ads.

Ad formats

Canvas ad format For any of the five ad formats above, you can add a specific format called a canvas, which is a full-screen ad experience designed for mobile. You can create your canvas ad from a template or create a custom layout with images, videos, products and call-to-action buttons that link to your website or app. For online stores, there are two specific templates designed for selling products. Read more in Facebook's canvas ad guide.

Canvas ad

2. Ad formats for specific objectives

There are three ad formats for specific objectives:

  • Link ads
  • Lead generation ads
  • Dynamic ads

Link ads

Link ads is the most common ad type on Facebook. Use these ads when your objective is to drive users to your website. The entire ad is clickable and you can choose different call-to-action buttons in the ad, such as “shop now” or “learn more”. Link ads can contain image, video and carousel ads.

Lead generation ads

The objective of lead ads is to collect information from people who are interested in your business. Lead ads are presented using an image, video or carousel, and when users click on your ad, a form shows up without them leaving Facebook. The form is already pre-filled with their contact information, making this ad type especially useful on mobile. Lead ads generate qualified leads for your business.

Dynamic ads

Dynamic ads are a great fit for online stores as they automatically promote your products to people who have engaged with your website or app. To use dynamic ads, you need to upload your product catalogue to Facebook and install the Facebook pixel on your website and the SDK in your app. Once that is set up, Facebook will automatically show the most relevant items for your product catalogue.

For more information, see Facebook's guide to create dynamic ads.

3. Facebook page and posts engagement

There are specific ad formats to drive engagement on your Facebook page and posts:

  • Post engagement
  • Page likes ads
  • Event response ads
  • Offer ads

Post engagement

Posts on your Facebook page can be boosted to deliver more engagement to your page, such as likes and shares, or to drive people to your website. When you create a post on your Facebook page, choose boost post to determine your audience, budget and duration for your promotion. Facebook provides insights on your posts, such as how many likes and shares the post received, which is a useful tool to determining the type of content that your audience enjoys.

Page likes ads

Page likes ads are used to promote your business page, rather than just a single post, with the aim of driving users to like your page. The page likes ad is created directly from your Facebook page. Click the promote button on the bottom left-hand side of the business page and choose your desired audience, budget and duration.

Event response ads

Event response ads are used to promote your events and to drive people to respond. Create your event directly from your business page. Thereafter you can promote the event by boosting it directly from your page.

Offer ads

Offers ads are discounts that you share with people on Facebook. This is a great tool for online stores that want to boost sales by offering a certain discount or promotion. Users who claim your offer receive a discount code and are sent to your online store to shop. The discount code is used at check out to redeem the value. Offer ads include automatic reminders so that people who have claimed your offer will be notified when the promotion is about to expire.

Create and promote post

How-To Resources

Facebook has several great resources with tips and best practices to help you choose the right ad creatives and to write effective ad copy:

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6. Deciding budget and how, when and where to show your ad

Once you have determined the objective of your campaign and set the audience and ad format, you need to decide how much you want to spend, when you want your ads to appear, how you want Facebook to optimize your campaign and finally where you want your ads to appear. To put these choices into context, we will first briefly explain how Facebook’s ad auction marketplace works. Thereafter, we will go through your options for setting a budget, schedule, placement and optimization strategy.

Facebook’s ad auction marketplace

Facebook’s ad delivery is based on an auction model where an auction is held for every opportunity to show a user an ad. The winner, or in this case the ad that is shown, is the ad that creates the most value for both the users and the business advertising, it is not the highest bidder as in traditional auctions.

When determining which ad to show, Facebook aims to balance creating value for the advertisers with providing a positive and relevant experience for the users of Facebook. Facebook takes into account three factors in an auction:

  • Bid: the bid depends on which bid strategy you choose when setting up your campaign. There are two bid strategies, lowest cost and target cost, that we describe in the ad optimization strategy section below.
  • Estimated action rates: this is Facebook’s estimate of how likely a user is to take the action that you want them to take, and for which your ads are being optimized.
  • Ad quality and relevance: this is Facebook’s estimate of how interested they think a user will be in seeing your ad. There is a specific relevance score for each ad that you can view in the ad manager.

When the auction takes place, Facebook combines the three factors above to form a total score that determines whose ad will be shown. To get the most out of your advertising you should aim to have relevant ads targeted at the right audience, which will make all three factors as high as possible.

Budget

You can choose either a daily budget or a lifetime budget. The daily budget is an average, which means that Facebook will try to deliver the amount of results to reach your daily budget each day, but there will be variations in exact daily spend due to the ad auction dynamics. Facebook can spend up to 25% over your daily budget on a certain day, but the spend will be evened out to your set daily budget average over a calendar week (Sunday to Saturday).

The alternative to setting a daily budget is to set a lifetime budget, where you define how much you want to spend over the entire lifetime of your campaign. Facebook aims to spend the budget evenly over the lifetime, but similar to the daily budget option there will be variations.

Budget and schedule

Schedule

The schedule option is about deciding when you want your ads to be shown. You can either set a start and end date and time or run the ads continuously starting right away. Under the advanced options, you can also choose to schedule your ads for specific hours and days of the week. Note that Facebook will review your ad before publishing it, a process that takes up to 24 hours.

Placement

Placements are the different places that Facebook can show your ads. You can choose between automatic placements and edit placements. Automatic placements places ads across Facebook’s apps and services and is the recommended option by Facebook as it gives them the most flexibility to optimize your campaign. The available placements are: Facebook, Instagram, Audience network and Messenger. Edit placements allows you to manually choose the placements that you prefer.

Placements

Ad optimization strategy

In addition to the budget, scheduling and placement options described above, you can choose how you want to optimize your campaign. There are four main choices to consider:

  • Optimization for ad delivery
  • Bid strategy
  • When you get charged
  • Delivery type

Ad optimization strategy

Optimization for ad delivery Optimization for ad delivery allows you to choose what you want to achieve, and based on that Facebook will deliver your ads. Facebook will show your ads to people that are most likely to take the action that you want. You have four options to choose from:

  • Link clicks: Facebook will deliver your ad to people that are likely to click the link in your ad.
  • Landing page views: Facebook will deliver your ad to people that are likely to click the link in your ad and to load your landing page. This option requires the Facebook pixel that tracks landing page views.
  • Impressions: Facebook will deliver your ad as many times as possible.
  • Daily Unique Reach: Facebook will deliver your ad to people up to once per day.

Make sure you align your optimization choice with the overall target of your advertising.

Bid strategy

There are two bid strategies to choose from, the lowest cost and the target cost bid strategy. The lowest cost bid strategy is the default and most common bid strategy and implies that Facebook will bid in the auction with the aim of getting you the lowest cost for the event that you are optimizing for. You can also set a bid cap if you want to make sure that Facebook does not bid higher than a certain amount.

The target cost bid strategy is only available for campaigns with the following objectives: lead generation, app installs, conversions or catalog sales (for all other objectives, the lowest cost bid strategy is used). With this strategy, Facebook will bid with the aim of reaching an average cost per event as close as possible to the target cost you have defined.

When you get charged

This option allows you to choose if you want to pay for ad impressions, i.e. every time your ad is shown, or if you want to pay every time someone clicks your link (CPC). The CPC option is only available for some of the campaign objectives. If you choose, for example, the brand awareness objective, Facebook will charge you for impressions, whereas if you choose the traffic objective, you can choose to get charged for impressions or link clicks.

Delivery type

You can choose between standard and accelerated delivery. Standard delivery means that Facebook paces the spending of your budget so that it is more even over time and not spent too quickly. This is the most common delivery method and recommended by Facebook for most advertisers.

Accelerated delivery means that Facebook tries to spend your budget as quickly as possible. This option requires that you set a bid cap. If you have a promotion or similar that is time sensitive, this option could make sense.

How-To Resources

When it comes to setting a budget and choosing your ad optimization strategy, we recommend Facebook’s overall guide on how to structure your Facebook ads campaigns.

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7. Final note

Facebook is a great advertising channel for e-commerce stores. Your audience is there and Facebook provides great tools for you to find them. Remember that the key to succeeding with Facebook advertising is to show the right message to the right people. The best way to find the right people and the right message is to start with a carefully considered strategy and to continuously test and optimize from there. Don’t be overwhelmed by all the settings and choices available, instead use the flexibility and granularity of Facebook’s offering to your advantage.

Good luck!

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Helena Ahlström

CEO, Evermark


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