April 19 138

How to Create Profitable Facebook Ad (Guide) — $32 290 in One Month

Every marketer knows that there are multiple traffic sources to generate traffic to an affiliate offer or a website, and there is Facebook. Despite all the recent confusion, Facebook is still one of the most popular and visited social networks out there. It is powerful in terms of marketing. When it comes to purchasing power, you are unlikely to overestimate the potential of the Facebook audience. The formula is as follows: If you want to sell something, go to Facebook.

Yes, Facebook provides possibilities to get visible and to let people know about you and the promoted brand. The challenge is to use this opportunity correctly. In other words, it depends on you whether your ads will be profitable or you will just waste money.

Definitely, you have read comments claiming that Facebook ads are inefficient.  Ok, someone launched an ad campaign, didn’t get the desired results, and cast the blame on Facebook ads. But many successful campaigns in various niches prove that in most cases the failure is the result of not understanding how to advertise on the platform.

Today we will break down step-by-step how to make your Facebook ads profitable and your campaigns efficient. We will not discuss how to start a Facebook ad campaign but focus on the key aspects that make your campaign profitable.


Factors that Determine Ad Performance

When it comes to the profitability of Facebook ads, you need to estimate:

  • ROAS (Return on Ad Spend) helps to manage your budget effectively.

  • ROI (Return on Investment). ROI helps to estimate the success of your marketing campaign. Unlike ROAS, ROI deals with the net profit instead of revenue.

  • CAC (Customer Acquisition Cost). This parameter shows the average cost of acquiring a new customer. 

These three factors are based on the overall performance of your ads.

In its turn, the performance of an ad is determined by three elements:

  • Creative. An image, a carousel of images, a video. Colors and space matter. Use contrasting colors to highlight specific elements. Psychologists note that overcrowding images with details make people scroll the ad faster. Specific colors or their combinations can be annoying. For example, the red color helps to attract attention but excessive use of red can get on nerves. That is why you need to get ready with several variants of creatives and test them.  
  • Headline. The attention span of social media users is very short. Thus, you need to make people interested in your ad at once — no one will read your beautifully-written headline. It should be clear. If you offer a discount, mention it. If you advertise a limited-time offer, announce it.    
  • Description. Here you need to announce the value of your product to potential customers. Why is it special? Mention what problems your product helps to solve, be it a weight loss, fashionable outfit, language courses, or anything else.

Note that your headline and description will be in standard Facebook ad colors, blue and black, — the same as for all other ads. This means the image is the part of an ad that should stand out.


Tips & Tricks for Making Ads Profitable  

The social media giant provides detailed recommendations, technical requirements, and recent updates for ads on Facebook and Instagram via Facebook Ads Guide.

Standards are the same for everyone; however, some marketing campaigns are profitable while others deliver poor results or even end up with losses. Running ads requires solid preparation: you need to visualize your target audience (Who are people that might be interested in your service/offer/product? Where do they live? How old are they? What are they interested in?) and create your ads.

In fact, tiny details usually determine the success of advertising campaigns. Let’s dig in and reveal the elements that should take your campaigns to an entirely new level.


 Make Your Ads Stand Out and Grab Attention

In other words, your ads shouldn’t look like direct ads. Facebook newsfeed is full of ads, which are scrolled unnoticed in most cases. SurveyMonkey claims that more often than not users are unsatisfied with ads claiming them overwhelming, irrelevant, and repetitive:

All businesses want to grab users’ attention but not all succeed in this quest. Let’s study several examples of Facebook ads.

Marketing gurus use Facebook ads and marketing funnels and provide the best classic examples of how the ad should look and work. Note bright green color (green is usually associated with trust), Neil Patel’s photo (people trust more to a coach when they see a picture), the lead magnet (a free bonus), and the call to action (Learn more).  

Quite often, while working with dating or gaming offers, marketers use the app install objective for Facebook Ads and strive to make ads effective to generate as much traffic as they can:

You can read more about the specifics of ads for dating niche in How to Make Money on Dating Affiliate Offers.

The same approach is used by marketers for app install advertising in the gaming niche:

The travel agent Hipmunk has a cartoon character in its logo:

The company used the same recognizable character for its Facebook ads. And they were right because the Hipmunk really grabs attention:

Probably you have noticed the image first, then, you have read the text around.

Another example that was split tested for images:

As you see, the difference is huge. AdEspresso stepped aside from the common pattern and offered an unexpected image for the ad. The flashy image performed much better than the plain one.

Almost all marketing experts recommend using high-quality pretty images in an attractive palette. But if everyone uses pretty images, all ads seem plain. Sometimes you need to move in the opposite direction to get noticed. When sleeky ads are trending, try ugly, ridiculous (see the DesignPickle ad creatives below), and funny images. Study your competitors and do the opposite.

You invest in paid ads, so invest a bit more in the design of your ads. If you are knowledgeable enough, you can try to create several variants of images for your campaign; otherwise, pay a professional designer to create images that will convert. This investment will be paid off by higher conversion rates.

Neil Patel once noted that many businesses make the same mistake: they use conventional images for their ads while paying an extra for clicks or impressions. Instead, they could invest in unique images that would deliver better overall results.


Image Size

Now you wonder what images are considered the best. Actually, every industry has its own peculiarities, but there are general recommendations about size, color, and statement (value).

You can prepare a fantastic image but it will not fit the dimensions of the ad picture. You don’t want to end up with a squeezed or cut-off image. Make sure that the images selected for an ad campaign match the existing requirements. Meta Business Help Center recommends the following image size for different placements:


Colors

As we have mentioned above, color is a powerful instrument. The smart approach to a color choice might help you run a winning campaign. Plain images are boring even when they are in a single color. To let your images stand out, use contrast to make images bright and memorable. The more unexpected your color scheme is, the higher chance that users will notice your ads. You may use a standard color wheel as a reference:

Contrasting colors are opposite to each other. Take into account that Facebook has blue and white in its color palette, so you can choose contrasting colors like yellow or orange to make your ads visible. However, avoid using colors deployed by your competitors, users can mix up ads and click on your competitor’s ad instead of yours.


Statement

Your image should contain an offer or a proposition that users cannot resist. Your image is intended to draw attention, but you can further increase the ad performance with a brief message. Add your special offer or bonus details to the image like in the examples below:    

A simple announcement will catch the eye before users will pay attention to the headline or description.

Facebook states in its ad policy that the text cannot occupy more than 20 percent of an image. Make sure that your proposition is compliant with this rule. Otherwise, you can end up with ads rejected.


Ingenuity

Be authentic and unique in representing your brand.

Barkbox has a perfect example of an authentic ad:      

The addition of some funny elements to your ad makes it original and interesting. This way you can attract more attention to your brand, as well as get comments and shares. Unexpected details make users stop scrolling — this is exactly what you need.


Make Your Ads Cost-Efficient via Targeting  

Once you have created a masterpiece, you do not want to waste money on just showing it off. You need clicks, installs, downloads, subscriptions, or sales.  

Here it comes, the infamous Facebook Ads targeting. As with any paid advertising campaign, precise targeting cannot be overrated. The success of any ad campaign can be measured by a positive click-through rate.

So, the task is to show ads to the right audience. Ads are profitable when you get clicks and conversions. That said, you don’t want to advertise retirement insurance plans to teenagers interested in fitness plans and fashion. Actually, Facebook offers excellent targeting tools to make your ad campaign profitable.

First of all, you need to divide the audience into warm and cold. The warm audience is familiar with you and your brand. The cold audience knows nothing about the brand, products, and services you offer. Let’s see how to target the right audience.


Custom Audience

This method is efficient for a warm audience and requires some preparation.

First of all, you will need a Facebook pixel installed on your website. You’d better install it right after you finish reading this article (Why? Below you will find a case study from Andrew Hubbard, a Facebook ad guru, who proved by way of example the significance of a Facebook pixel).

Ok, you install a Facebook pixel (a tracking tool) on your website. Now, when people open pages of your site, they are automatically added to your Facebook custom audience.

You can create a dedicated ad set for your custom audience with the lead magnet. People are likely to react to ads and perform the required action when they have heard about the product or brand.

The only downside is that your custom audience is limited by the volume of the website traffic. If you have heavy traffic and many visitors, targeting a custom audience is the most effective and cheap way to get conversions.

So, open Ads Manager and click on: Tools -> Audiences -> Create a Custom Audience.

You will see a pop-up window:

Select "website traffic". When you agree to the terms, you will see a new window with a code. This is the Facebook pixel. Next, you install the pixel on your website, the same way you install Google Analytics.

Optionally, you can create a custom audience based on your email list:

Platforms with low traffic shouldn’t refuse custom audiences but need to create additional cold audiences.


Lookalike Audience

Obviously, you run a Facebook ad campaign not only to remind your readers and existing customers about the brand or inform them about a new offer or discount. You look for new customers.

One of the most powerful features of Facebook Ads is the possibility to create a new custom audience that will reflect all major characteristics of your existing custom audience — a lookalike audience.

Facebook will analyze your custom audience: major demographic characteristics, additional interests, what pages they like, what they post and comment on. Next, Facebook will look for users with similar characteristics. This lookalike audience can be dozens of times larger than your original custom audience.

Actually, the process is very simple: Select Audiences, then instead of Create a Custom Audience click on Create a Lookalike Audience. As a source for your Lookalike audience, choose your custom audience:

Voila! Now you have the audience to target. Note that this audience is cold — people are unfamiliar with your brand and product, so the marketing strategy, including ad sets and the lead magnet, might be different because you need to introduce this cold audience to the promoted brand and service/product.


Standard Targeting Based on Interests and Demographics

The first two targeting variants are meant for businesses and platforms with existing customers, email subscribers, and visitors. When you promote an affiliate offer having no existing audience, you have to go with standard targeting options — interests and behavior.

The better idea you have about your potential customers (target audience), the easier it will be to narrow down the huge base of Facebook users. You don’t want to waste money and show ads to the wrong audience, so you need to specify GEO and some demographic features, such as gender, age, language, and so on.  

For example, if you promote beard-care products for men, you want to target mainly male audiences. But you can also target women aged 25-55 — in many cases women would purchase your products for gifts, particularly before major holidays like Christmas.

Then, you have to narrow down your target audience by interests:

Facebook offers an extensive list of interests that you can choose from. Besides, you can search for a specific topic. The selection by interests is based on pages people visited or interacted with. The good thing is that Facebook will display the size of the audience based on selected features.  

You can go further and let your competitors work for you via the dropdown menu Connections and Advanced Combinations:

Entering the pages of your competitors, you target people who liked competitors’ pages.  Do not skip this option, because showing ads to a very broad audience will result in low conversion rates.


Facebook Ad Spend

Setting up budget limits is a tricky task. On the one hand, you don’t want to spend the extra money and expect to secure profits from every cent invested. On the other hand, you are worried that budget restrictions might close some business opportunities and ads won’t be delivered to the right audience or you will stop your campaign too early.

For that, continually monitor your ROI. When you move in the right direction (in other words, you convert Facebook users into customers or subscribers), your return on investment will be positive. Additional testing and campaign optimization should result in higher ROI.  

When you set up your target audiences, Facebook offers several bidding options for your ads, including:

  • CPC (Cost Per Click)
  • CPM (Cost Per Mille, or Cost per 1 000 impressions)
  • Optimized CPM

Most marketers prefer dealing with CPC.  In any case, you can set the maximum bid:  

Additionally, you can optimize your ad campaign for a specific action:

If you are not experienced with Facebook ads, begin with a smaller budget. Do not spend huge amounts daily before you test your ads and targeting options. You can increase your bids and scale up the campaign later.  

In the beginning, you can set your daily budget as small as $5-$10. Do not get disappointed with the first results and continue split-testing. Step by step you will determine ads or ad sets that perform best of all and deliver the results.  

Testing and Optimizing

Testing again. Optimizing again. There is no mistake — you need to test thoroughly to get the best results.

When your ads are shown to the wrong audience, your cost per acquisition is high, and it is good if you will break even. Your goal is getting profit, and testing helps you decrease the cost of every customer — your precious ad budget won’t be spent on people who are not interested in the advertised products.

One split test can help improve conversion rates by 50%. Test ad images and make adjustments; test different text locations and improve your ads further. Every time you run A/B testing for specific elements of ads, you increase conversion rates, making ads more profitable.

Warning: Do not over-test the performance of your ads. Testing multiple ad variations may lead to extra costs. For that, after every split test, stop poorly performing ads and adjust your budget.

As experience shows, the image has the largest impact.  

Run tests with a limited budget. Once you have optimized your ads and redistributed the budget, you can scale up your campaign.

How many split tests do you usually run:
0 votes

Examples of Successful Facebook Ads  

We have selected several examples of Facebook Ads that have proved to work well.

Guardian Weekly

Vibrant images with Guardian’s signature bold scripts seasoned with a clear call to action — Subscribe. The carousel ads helped to create the line of selling points: "Get a progressive perspective", "Discover unheard voices", etc. Note the contrasting yellow-black color scheme that catches the eye.  

WestJet

WestJet ran a Facebook ad campaign to promote discounts. The bright catchy image is location-specific. The clear offer description speaks for itself: Low fares to Calgary. And then direct to the business: Book Now.

The result: the short-spoken and efficient ad.    

Design Pickle

The guys at Design Pickle are undisputed experts in design. Their ads are always masterpieces: stylish, eye-catching, peppered with humor, and…efficient.  

And more:

And this risky ad (you like it or you hate it but you won't skip it):

You can find more ideas for creatives in the dedicated article The Best Creatives for Facebook Ads.


Case Study: Generating $36 449 from a $4 159 Facebook Ad Spend

Andrew Hubbard, a well-known expert on Facebook and Instagram advertising, has shared an interesting case study based on his work with Navid Moazzez. At that time Navid had just launched his new course, Virtual Summit Mastery (VSM). But until he cooperated with Andrew, he had never used paid ads to promote his courses.

Jumping ahead, the result was quite impressive: a very modest budget of $4 159 brought $36 449 in revenue. The return on investment (ROI) was 876%! Now let’s go through the process and strategy that led to such a success:

  • Ads placements;
  • Different traffic sources’ performance;
  • Factors that influenced the campaign.

Besides profit, the Facebook ad campaign also resulted in:

  • 769 new email subscribers;
  • 128 new Facebook page likes.  

Andrew noted that they began running Facebook ads around a week before the course was launched for sale. They intended to get new email subscribers to be added to the sales funnel. In any case, building an email list is an awesome investment for the future: even if new subscribers do not buy the course at once, they may become customers later.

Andrew began the campaign by targeting warm traffic because he believes that it is the cheapest source of leads and sales. By warm traffic, he means people who are somehow familiar with the person or the advertised brand. He noted that there are 4 types of warm traffic for Facebook ads:

  • Facebook fans
  • Website visitors (you need to install Facebook pixel)
  • Customer list (to upload to Facebook, usually the email list)
  • Facebook users who viewed your videos on Facebook

Andrew also noted that they added the Facebook pixel to the website only a month before running the ad campaign. With the pixel in place earlier he would have a larger audience to target.

Andrew used Facebook Ads to send warm traffic directly to a lead magnet. It is easier for the audience that knows about you and your brand to opt-in to the email list.

You can see one of the ads used within the campaign below:

Note that the ad copy answers the most common question about Virtual Summits.

Once people have clicked on the ad, they were redirected to the landing page:

The similarities between the ad copy and the landing page are not occasional:

  • The picture of the e-book in the ad and the landing page is the same.
  • Navid’s photo is used on both the ad and landing page.
  • The orange background in the ad is the same color as the color of the text and logo on the landing page.  

Andrew explains that “the relationship between the ad and the landing page is known as ‘ad scent’, and it’s a crucial part of achieving high conversion rates… You greatly increase the chance of them converting to an email subscriber or customer. High conversion rates help boost your Facebook ad relevance score as well.”

Some of the results with warm traffic were as follows:

As warm traffic is limited in numbers and easy to get exhausted, Andrew has developed a strategy to work with cold traffic.

Interest targeting and lookalike audiences are examples of targeting cold traffic on Facebook. As Andrew noted, it is difficult to ask cold audiences to opt-in or purchase something. That is why before asking to opt in, he used the following tactic:

  • Pre-qualify the audience interested in the topic. Only a small percentage of people seeing ads will click the ad to read the blog post. Thus, they confirm their interest in the topic.
  • Build trust. Here you need to provide some valuable information up-front before asking for an email or anything else.

Building trust is important. You can deliver high-quality content, answering some questions people might have. For this, Andrew targeted them with ads redirecting them to the website without opt-in required.  When the audience got familiar with blog posts, he retargeted it with ads containing the lead magnet.

The choice of the blog post for the promotion was based on two aspects:

  • The blog post should be already popular among readers and has the potential to appeal to a wider audience interested in Virtual Summits.
  • The article should be relevant to the free e-book offered within the marketing campaign.

With these criteria in mind, Andrew chose the blog post with a case study that was related to the e-book and was already very popular because it contained a case study.

So, when people clicked the ad they would either see the lead magnet (free e-book) and download it, providing their email addresses (positive scenario) or they would leave without getting the e-book and joining the email list.

Now, remember about the importance of the Facebook pixel: all people who clicked the ad and read the article on the website were ‘pixelled’ by Facebook.

Next, Andrew retargeted people who didn’t download the ebook (the lead magnet) the first time. If people didn’t provide their emails at once it doesn’t mean they are not interested. When retargeted people clicked the ads, they were directed to the landing page with a free e-book download option.

Andrew confessed that he didn’t expect many people to download the lead magnet at once. But he noticed that the conversion rate from the traffic sent directly to the blog post was good. The cost of $2.50 is for cold traffic sent to the blog post, without retargeting:

The preliminary stage has been completed. Now it was the time to open the cart. Hence, Andrew changed the focus: instead of getting new email subscribers, he wanted people from the email list and website visitors to buy the product. He decided to emphasize the urgency of the offer to make people act fast.

For that, he used several ad sets drawing attention to discounts and bonuses expiring, live webinars&workshops, price rises, and the cart closing.  Below you see one of the ads used for the campaign:

As you can see, he mentioned that less than 24 hours were remaining directly in the headline. Andrew noted that he intended to create a reason to click the ad right now and realize that the offer wouldn’t be available later.

As a result, he received an increase in sales every time a bonus was about to expire or before the cart closed. The ROI was impressive.

For this stage of the campaign, the total ad spend was $160.96.

"On the right you have the number of sales for each VSM package that was purchased after someone clicked an ad in this campaign. Then you have the sales value of each of those packages, which totalled over $10 000."

Andrew was satisfied with the results but could still see opportunities for improvement for the next launch.

First of all, he would try building warm audiences in advance (if the Facebook pixel would be installed on Navid’s website earlier, they would have a larger warm audience, to begin with). And the warm audience is the cheapest source of new leads.

Second, he would prefer to have more time for testing and optimizing the campaigns. They launched the Facebook ad campaign a little over a week before the cart opened. So, the time for A/B testing of the campaign was limited. Andrew says that testing is "particularly important for cold traffic" because finding the right message and the right audience takes time.

He shared a graph (below) illustrating one of the campaigns for cold traffic. In the beginning, the costs of new email subscriptions were $10.42; however, after a week of testing, Andrew succeeded to reduce it to $3.76. And he believes that with an extra week he would make the lead cost even lower.  

Overall it was a successful campaign: with only $4 159 in Facebook ad spend, they received $36 449 in revenue.    


Conclusion

As you see, creating profitable Facebook ads is not as complicated as you might have thought. Andrew Hubbard has proved in his case study that the right strategy, right ads, and proper testing lead to success and result in high ROI.

How do you like the article?