Here’s the framework that I sent him for understanding his account 👇
TLDR: Leverage account consolidation, Advantage+ shopping campaigns, creative testing and custom landing pages to boost account performance.
In this post, we’ll cover:
- The 4 Meta (Facebook) ads account pillars
- Campaign setup 🤖
- Audiences 🌎
- Creatives 🎥
- Landing pages 🛬
- Tips for boosting performance
- General best practices ✏️
- What’s happening to CPM’s, CVR, CPA? 📈
- Retargeting Spend🚫
- Key takeaways
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The 4 Meta (Facebook) ads account pillars
The 4 account pillars that drive Meta performance includes:
- Campaign setup
- Audiences
- Creatives
- Landing pages
The majority of the account issues that I see are normally driven by:
- Incorrect settings in the campaign setup phase
- A decline in performance from audiences, creatives and/or landing pages
Let’s break these down a bit further.
Campaign setup🤖
Meta campaigns are setup on 3 primary settings:
- Campaign objective
- Campaign type
- Bid strategy
Campaign objectives
The only campaign objective that DTC / E-commerce brands should be using on Meta is “Sales”.
This will focus the Meta algorithm on finding customers who are likely to purchase:
Campaign types
The preferred campaign type depends on how much control you want to have over the targeting, placements and bid strategy:
- Advantage+ shopping campaigns (ASC) are the preferred setup for most accounts where Meta automatically opts into the targeting, placements and bid strategy.
- There is less control with an ASC campaign, but the main benefit is that it frees up time to focus on higher leverage initiatives like creative and landing page testing.
- Manual sales campaigns are the preferred setup if you want more control over the targeting, placements and bid strategy.
- The main benefit here is that you can get super targeted on the audiences that you are trying to reach, the placements where your ads show up and how you want to bid for them.
- The con of the manual setup is that the time it takes to finely tune all of the settings to yield strong performance.
Bid strategies
Advantage+ shopping campaigns (ASC) automatically opts into the highest volume bid strategy.
Manual campaigns provide the ability to change bid strategies based on your goals and they are bucketed into 3 categories: spend-based, goal-based and manual.
My recommendation for earlier stage brands is to start with Advantage+ shopping campaign and highest volume bidding to build a base of acquisition. This simplifies account management and frees up time to focus on higher leverage activities like creatives and landing pages.
Brands can then augment the ASC campaign with manual campaigns to push into specific audiences that they think are high value (like lookalikes). I’ve seen the bid strategies under spend-based and goal-based categories work best for manual campaigns.
Audiences 🌎
The primary goal for managing healthy audiences is to find targeting that yields both:
- Low cost-per-thousand impressions (CPM’s)
- High conversion rates (CVR)
The combination of the two provides the best to chance to reach the highest amount of new customers that are relevant to the business.
Audiences fall within a spectrum of narrow to broad targeting and there are CPM/CVR implications for each.
Narrow audiences
Narrow audiences are highly targeted and typically have higher conversion rates.
An example of a narrow audience could be a 1-5% lookalike audience on a customer list from last quarter.
The downside of narrow audiences are the CPM’s.
Meta’s ability to match customer lists to high intent prospects has declined since Apple’s iOS 14 launch and that has put upwards pressure on CPM’s for custom audience targeting options like lookalikes.
This makes narrow audiences harder to scale when budgets are increased.
Meta Shops aims to combat this. There are also third-party tools like BlackCrow AI and Proxima who leverage first and zero party data (instead of third party) to build targeted audiences at scale.
Broad audiences
Broad audiences are on the other end of the spectrum. They typically have the lowest CPM’s and target a wide (broad) audience.
The conversion rates are typically lower on a broad audience, but they are becoming more efficient at finding high intent audiences at scale as Meta’s machine learning models improve.
Meta’s new Advantage+ shopping campaigns are worth testing as a broad audience solution.
The downside of broad audiences is that they are difficult to train if an ad account is newer or if there are a limited purchases coming through the conversion pixel.
Creatives 🎥
Strong creatives on Meta are king.
Improving creative is probably the highest leverage thing that a marketer can do to improve account performance.
I’ve seen numerous accounts where increased creative testing led to increase in click-through-rates (CTR’s). The increase in CTR’s then led to a drop in costs-per-click (CPC’s) and cost-per-acquisition (CPA’s).
It’s a self-reinforcing cycle that makes sense:
- Low ad testing frequency results in ads that are left on for too long. This then leads to ad fatigue across the platforms, which results in drops in CTR and increases in CPA’s.
- High ad testing frequency mitigates the ad fatigue problem and increases the odds of finding a winning creative that boosts CTR and drops CPA’s.
Every platform and account is different and finding the right testing cadence takes time.
For example, TikTok ads need a higher volume of creative than Meta and high spend accounts need more creative launches than low spend accounts.
The key is to find the right balance for the specific platform and spend levels to get the benefits of increased CTR’s without flooding the account with too many creatives.
Typically, I see that brands aren’t ad testing enough, but it’s worth mentioning that if a high number of ads are getting minimal spend, then it may be time to pause some of them out to give the other ads a chance to gain learnings.
Here are some guidelines that I like to follow when testing creatives:
- Test a mix of static, gif and video imagery
- Upload creatives in all of the available ad spec formats to maximize placement exposure
- Test different hooks
- Mix up the creative angles
- Offers, unboxing, UGC, branded assets, founders story, pre vs post. etc.
- Leverage quick frame rates (2-3 seconds)
- Mr. Beast’s videos do this well
An increased testing cadence across a mix of creative types can be the unlock an account needs to jump start performance.
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Landing pages 🛬
The next high leverage activity to focus on are custom landing pages.
I usually see brands set up paid landing pages that direct traffic to their homepage or shop pages.
These are okay in the early days when resources are tight, but landing page testing is the crtitical step next step for hedging against rising platform costs and scaling efficiently.
The primary benefit of custom landing pages is that they provide an opportunity to educate cold traffic on how your product can benefit them better than your evergreen pages can.
The DTC legend Nik Sharma highlights in his landing page cookbook that every landing page should answer these 5 questions:
We actually tested a page that Nik’s team at Hoox put together for us and we saw a +20% improvement in conversion rate (CVR).
That page breakdown deserves its own dedicated post, but you can see the control page here and the Hoox version here.
I highlighted in a recent Twitter thread that there are some pages that are more high value for testing than others:
Some of those page types includes:
- Custom landing pages (Poo Pouri example)
- Also, called Trojan Horse pages
- This looks like a homepage to cold traffic, but its built for direct response results.
- Listicles (Perfy example)
- 5 reasons why type pages
- Advertorials (Solawave example)
- Third party page that combines the editorial format with an ad
- Quiz funnels (Jones Road example)
- Listicle that leads into a quiz funnel
- Social proof pages (Solawave example)
- Uses customer results to highlight the product benefits
Custom landing pages work and they pay for themselves in perpetuity once you find a winner.
Here are the tips for boosting campaign performance 👇
Tips for boosting performance
As a recap, the 4 Meta (Facebook) ads account pillars include:
- Campaign setup
- Audiences
- Creatives
- Landing pages
The next step is to figure out which levers to pull under each pillar to improve account performance.
Let’s first dig into general best practices for improving performance and then we will dig into a few examples for how to address changes in the actual key metrics.
General best practices ✏️
The best practices to follow when optimizing Meta includes:
- Consolidated account structure
- The use of automated bidding and placement solutions (ASC+)
- Frequent creative and landing page testing
Consolidated account structure
One of the biggest issues that I see with accounts is that they over segment their ad sets across too many audiences and ads.
This campaign structure worked when Meta ads was in its hayday, but in the post-iOS 14 world there are fewer purchase signals for the Meta algorithm to optimize off of.
The counter to fewer conversion signals lies in account consolidation.
The top accounts only run a handful of ad sets around key audiences to maximize the algorithms learnings for each. This helps Meta find more target customers within the CPA goals as more purchase data clusters around the top perfomers.
Below is an example of an un-optimized account structure. In this example, 26% of the total spend is going to high CPA ad sets that only drive 11% of the purchases:
Optimized accounts run fewer audiences to focus the spend only on the top performing ad sets. This serves a dual purpose of:
- Cutting wasted spend on low performers
- Clustering purchases around the top performers
An example structure for an optimized account may look like this where the consolidation leads to a 26% drop in CPA:
This is an oversimplified example, but I have seen accounts with this level of CPA improvement following account consolidation.
Automated bidding and placement solutions
Meta’s largest counter to the loss of conversion signals post-iOS 14 came with the launch of Advantage + shopping campaigns (ASC).
The key benefits of ASC includes:
- Fewer inputs required during campaign creation
- Simplified audience options
- Streamlined creative management process
ASC campaigns combine all of the best parts of Meta within a single campaign.
It forces consolidation, which gives the engine more conversion data on fewer ad sets.
It reduces unneccesary tuning with the auto opt-in to broad audiences and highest volume bidding strategies.
And, it leaves marketers with more time to focus on higher leverage iniatives like creative testing and building custom landing pages.
Frequent creative and landing page testing
I already highlighted the benefits of creative and landing page testing in the key pillars section above, but the TLDR is:
- Frequent creative testing reduces ad fatigue, improves CTR’s and cuts CPA’s
- Custom landing pages educate your customer down funnel and (if done well) improve CVR’s and cuts CPA’s
Both of which are critical to scaling accounts efficiently and the majority of marketers time should be spent here.
Summary of best practices
A simple, consolidated account structure with automation (ASC) and frequent creative and landing page testing will drive the bulk of performance gains needed to scale efficiently.
Now, let’s dig into a few examples where we see performance metric changes and how to address them.
What’s happening to CPM’s, CVR, CPA? 📈
The key metrics to check when digging into Meta account performance can be bucketed into 2 categories: Input metrics and output metrics
Input metrics
- Spend
- Cost-per-thousand impressions (CPM’s)
- Click-through-rates (CTR)
- Conversion rates (CVR)
Output metrics
- Purchases
- Cost-per-acquisition or cost-per-result (CPA)
The input metrics drive the output metrics and the majority of optimization time should be focused on the inputs.
Spend
Spend changes are a function of the daily budget target, bid strategy and audience targeting.
Sometimes a simple budget change can boost spend, but if daily budgets are not being reached, then it usually a function of too restrictive:
- Bid strategies (cost-per-result, ROAS, bid cap)
- Audience targeting on custom audiences (like lookalikes)
ASC takes care of both of these with the high volume bid strategy and broad audiences.
Manual campaigns need more fine tuning.
Decreasing the cost-per-result/ROAS targets or opening up the bid cap will tell Meta that you are willing to enter more auctions at lower efficiencies. This will help increase spend, but it may sacrifice CPA efficiency.
Custom audiences can be opened up by increasing the seed list size that you are going after. This can be accomplished manually with a larger seed list upload or through automated tools like BlackCrow AI or Proxima.
Cost-per-thousand impressions (CPM’s)
CPM changes can be a factor of seasonality, competitors, and/or overspending on too small of audiences.
Most DTC businesses have some form of seasonality. I usually see CPM’s spike across accounts during key sale moments (like Black Friday) when everyone is ramping up budgets to maximize the moment.
Tools like Varos can help benchmark performance against seasonality and competitors to see if the CPM fluctuations are market driven or if they are driven by something going on in the ad account.
Opening up audience targeting through consolidation, broad audiences or through larger seed list sizes will help keep CPM’s at bay while you scale.
Click-through-rates (CTR’s)
Andrew Chen has a great blog post titled The Law of Shitty Clickthroughs where he highlights that all ad channels CTR’s degrade over time.
He argues that the decline in CTR’s are driven by fading novelty, increased competition, and increased scale that leads to less qualified visitors.
Frequent creative testing is the best hedge against The Law of Shitty Clickthroughs.
Increased creative testing helps reduce the ad fatigue and ad blindness impact that results from stale creatives. This helps brands retain some of the novelty effect on platforms where competition continues to grow.
I usually see a strong correleation between increased CTR and decreased CPA.
Managing healthy CTR’s are critical for running Meta at scale.
Conversion rate (CVR’s)
Improving conversion rates is the one optimization that can be done outside of the walled gardens of Meta to improve account performance.
Testing custom landing pages on paid traffic is the highest leverage activity one can take for improving platform CVR’s.
Recap of key performance metrics
Focus on the input metrics (Spend, CPMs, CTRs, CVR) to help drive the output metrics (purchases, CPA).
- Spend: increase/decrease daily budgets, increase/reduce bid contrainsts, open up audience targeting
- CPM’s: open up audience targeting
- CTR’s: frequently test ad creatives
- CVR: test custom landing pages
Retargeting Spend 🚫
One final comment on retargeting spend.
I often see accounts over spend on retargeting audiences that are less incremental than their prospecting audiences.
This is usually driven by marketers unknowingly increasing spend based on the in-platform metrics (what they see in Meta) where retargeting always looks better than prospecting ad sets.
The problem is that retargeting does not drive net new business.
Retargeting is a helpful closer of sales that accounts should be leveraging, but they need to be keep in check as a healthy percentage of spend with most of the media costs going to prospecting iniatiatives.
Northbeam has a helpful metric for checking how incremental campaigns are at driving net new visitors called “% new visitors”. Google Analytics can also be used for new vs repeat ratios if proper UTM tracking is set up.
The key here is to constantly check the Meta in-platform numbers with third party data sources (MTA tool, post-purchase survey, Google Analytics, Amplitude, etc.) to make sure that the campaigns are delivering net new customers to the business and not just inflating vanity metrics.
Key takeaways:
- Consolidate the account structure
- Leverage automated targeting strategies (Advantage+ shopping campaigns)
- Test new creatives often in all of the available ad formats
- Build custom landing pages for paid traffic
- Pull back on retargeting spend that is not incremental and use that budget for prospecting audiences with lower CPM’s
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