Can you pinpoint the difference between an advertiser spending $100/day …
...compared to another spending $1000/day?
You guessed it - It's a difference in how fast they’re getting results!
The advertiser spending $1000/day has taken his Facebook ads and scaled them up massively.
He knows that by directly scaling his Facebook ads, his profits will grow exponentially.
Now lets back it up a bit for those who aren’t aware of what scaling truly means.
Simply put, scaling your Facebook ads means increasing ad spend on your campaigns while still maintaining a profitable return.
This can be a challenging task for certain businesses.
If you have an eCommerce website that sells products of low AOV and you want to scale your campaigns, be prepared to experience an increase in your acquisition costs.
Therefore it’s important to know your business numbers when scaling your ads. In this article I’ve detailed a method on how you can combat this increase in cpa- so make sure you read on!
While scaling is powerful, it can also backfire on you!
Some of you will resonate with what I’m talking about. Maybe you’ve tried scaling your ads. Infact, it was the first thing on your mind when you had a conversion come in.
This is a common occurrence we hear of. Clients come to us saying:
‘We allocated a campaign budget of $50/day and got 2 conversions already. Because the campaign was working so well, we decided to increase our budget to $200/day. And just like that, today morning the results tanked. Where did we do wrong?’
The truth is that increasing your ad spend without taking the right precautions can have a damaging effect on your returns. Doubling your budget before understanding the performance of your campaign is not the correct way to scale your Facebook ads.
Moreover, the Facebook ads platform changes on a daily basis. What worked in terms of scaling yesterday is not guaranteed to work tomorrow. This is what makes scaling Facebook ad campaigns all the more challenging.
Learning how to measure success and understanding the platform is your best bet to figure out what’s working, before making any large investments into your campaigns.
In this article, I’m going to talk about:
Before you execute any scaling strategies, make sure to follow the guidelines below to successfully prime your campaigns.
In every e-commerce business, you need to understand what a customer is worth to you before you decide how much you will spend to acquire them.
If a customer buys from you once, they may spend only $100. But how many times does your average customer purchase from you?
If they buy 5 times, their lifetime value is $500 and you may decide to spend more to acquire them.
Even if you do spend $100 to convert them and break even, you’ll be seeing a $400 return from them as a customer. Totally worth it in my experience!
Instability is what kills most campaigns.
I’ve seen this time and again when I audit ad accounts.
To achieve success with Facebook ads, you need to have certain elements ready to scale. Your audience is one of them.
Nailing who your target market is and where they hang out can make or break your Facebook campaigns.
If you're targeting everyone in your country, your ads are going to be completely irrelevant to most of them. And you’re going to waste your budget reaching people who aren’t interested in your product.
Therefore confine your audiences to whom you think would benefit the most from your products.
If you have any doubts about your targeting, ask yourself the following: ‘Is this audience really interested in what I have to offer? How will they make use of my product?’. If your answer is ‘no’, narrow down your audience or adjust your demographics to achieve better results.
Once you’ve defined who your targetable audiences are, you now need to test them. Having validated audiences prior to scaling will protect your ad spend and removes the guesswork of whether these audiences will perform efficiently or not.
The first step to scaling your advertising budget beyond $1000/day is to consider the size of the audience you’re targeting.
The more tightly defined your audience is, the faster you will exhaust them when scaling your ads. Scaling your ads to a narrower audience will also expose you to ad fatigue and increase your CPMs.
Facebook themselves have said they prefer audience sizes in the millions. The bigger the audience the better it is. That way their delivery system can find the best people to show your ads to.
Consider opening up your targeting or experimenting with broad targeting to allow the delivery system to find the best opportunities for you.
When scaling your budget with proven audiences, your creatives need to keep pace. Just as your audience’s fatigue, creative fatigue happens much sooner.
Creative fatigue is evident when you start to see high frequency, low link CTR’s and high CPC’s across your ads.
If and when performance drops, you need to start introducing new creatives so that as people move within your funnel they aren’t seeing the same images or videos over and over again.
I’ve outlined how we go about testing creatives in detail here.
A term you might have seen in your Facebook ads manager is ‘Learning Phase’. According to Facebook:
‘The learning phase is the period when the delivery system still has a lot to learn about an ad set. During the learning phase, the delivery system is exploring the best way to deliver your ad set - so performance is less stable and cost-per-action (CPA) is usually worse. The learning phase occurs when you create a new ad or ad set or make a significant edit to an existing one.’
When you launch your adset, Facebook starts learning and you’ll see this message under the adset level until it has delivered 50 optimization events.
Why 50 events?
Because Facebook has said they’ve seen performance stabilize usually after around 50 optimization events.
Before you scale, make sure you have 50 events triggering per week or wait for your campaign to exit the learning phase.
One of the worst situations you can put your business into, is having your sales funnel break as you scale your campaigns.
Just think about it - You’re spending $2000/day to drive traffic to your website and your add to cart is not firing correctly!
Not only will this impact your ROI negatively, it also sends negative signals to Facebook.
Remember Facebook’s core mission is to provide value for its users. Facebook is trusting you to take care of its’ users and provide them with a good experience. If your website is doing the opposite, those users are going to blame Facebook and not return to the platform. This will cause Facebook to lose a lot of revenue which it doesn't want to.
As you scale, make sure you’re continuously testing your sales funnel for any broken links. If you’re working with a developer to improve your website backend, it makes sense to also check whether your pixel events are firing correctly or not.
If there was one advice I could give to all ecommerce owners, it would be this - Increase your AOV!
Increasing your AOV is a quicker way to increase your cash flow without much effort.
Many of you will argue the same effect can be achieved by focusing on increasing your traffic. However acquiring more traffic has a cost attached to it, whereas increasing your AOV could be as simple as installing a plugin for your shopping cart.
Once you’ve significantly improved your AOV, now would be the best time to scale. You’ve got people checking out with a high dollar cart value; scaling your ad spend would be like introducing more fuel to the fire.
You may be aware that Facebook decided to shift management of budgets to the campaign level starting September 2019.
Ever since Facebook advertising started, budgets were always managed at the adset level. In each adset, you could create multiple ads and Facebook would allocate adspend among these ads intelligently.
Now Facebook is using machine learning to help advertisers allocate spend among different audiences and ads and not just ads alone.
With CBO, Facebook hopes to help advertisers allocate their spend more efficiently and get better results from the platform.
So far, CBO has worked really well in scaling our client campaigns. By allowing Facebook to allocate spend to where it sees the most conversions, we are able to focus on perfecting our marketing strategy and improving our clients sales funnels.
Now that you’re scaling audiences and making several dozen new campaigns, adsets and ads, it will get overwhelming fast. The next step to help you manage all of this is using automated rules.
Facebook has a native automated rules tool to help you mitigate the risk of wasting all of your money.
Here you can create rules to turn off unprofitable adsets and ads during the day and turn them back on when performance improves.
To help you successfully transition from a $100 daily ad spend to $1000/ day, here are my best tips for effectively scaling Facebook ads.
I’m going to show you 4 proven strategies that you can put into action today.
This method of scaling is slow and steady. It’s not the fastest way to scale but it's less stress and risk.
If you are new to Facebook ads, I would recommend you start here.
Using this method, scale your campaigns by 15% - 20% every three days. Try to increase your budgets no later than mid morning ad account time. This is to ensure the algorithm paces your budget during the day. If you end up increasing budgets later in the evening, it messes with the pacing and Facebook could dump all your budget too quickly leading to poor results.
You obviously want to be monitoring performance as you scale. Keep an eye on your cost per results at the ad level. If an ad is not meeting your KPI, turn it off and start again the next day.
Allow about 2-3 days for the results to settle in before you scale again. If the results are not in line with your KPIs, then scale your budget back down incrementally until you get the results you’re looking for.
This method of scaling is usually quick. It can double, triple or quadruple the budget you spend in a day.
I would recommend this method for advanced advertisers.
If you are running a sale period with a deadline eg: christmas sales then horizontal scaling will be what you want to implement. This is also a method to use if you’re looking to scale up your revenues quickly.
Using this method, simply duplicate your top performing adsets within the same campaign or create another campaign. Most of the time it's just a straight duplicate - you’re not changing any variables within your adset.
If you do duplicate within the same campaign, make sure you increase the budget if you’re using CBO. Make these changes early in the morning so that you give the campaign time to settle in during the day.
Keep an eye on your cost per result. Usually horizontal scaling works best when you have a tolerance for your CPA and have validated your soft metrics like CTR and CPC.
Another great way of using horizontal scaling is by testing out different variables.
Let say you’ve got an adset targeting the whole of the USA performing really well over the past couple of days and you’re now looking to squeeze more revenue from it.
Through breakdowns, you notice most of your purchases are coming from 35 - 44 year olds. In this case you might choose to duplicate this winning adset and have it target only that age group.
This can definitely work but make sure you’re hitting those 50 optimization events Facebook needs per week for the algorithm to optimise.
Other ways to quickly scale include splitting adsets between states, gender, countries, placements and using different bids.
This is an advanced, high risk approach to scaling that uses manual bidding and when used properly can help you scale rapidly.
Make sure you’re aware of your target CPA and are working with your best performing audiences.
To use this strategy, create a CBO campaign and select ‘bid cap’ under the budget section.
Set your first adset bid to your average CPA. Duplicate this adset within the same campaign and now double your bid cap. Repeat this exercise until you have 5 adsets and the last adset is 5 x the original bid cap. Make sure you have automated rules in place to manage your spend.
There’s always a fair amount of risk when scaling your campaigns. If you have profitable campaigns you’d like to invest more money in, it’s important to use the right mix of strategies and tactics.
The potential to increase your daily spend without seeing a positive ROI from it can be scary if you’ve never scaled campaigns before. However the potential upside - more revenue, more customers, faster inventory turnover - is often worth taking.
The best way to mitigate the risk is choosing a formula that works for you and continuously testing.