When I first started using Facebook Ads I felt like I was throwing money into a campfire. No matter what I did and how much I spent I never got a single customer. For a long time I was convinced that the people that would “like” my post and cost me money were fake accounts created by Facebook to steal my money.

The truth is, if you don’t understand how Facebook Ads work, you will be throwing your money into a fire. There’s no simple way to say this… Facebook Ads are complicated and confusing and if you do them wrong Facebook will be the only company making any money.

In this article I’m going to attempt to decode this puzzle and give you a better understanding of how they work and how you can use them to make money for your business.

Setup Your Business Facebook Page

The first step to a successful Facebook Ad Campaign is to have a fully developed page for your business. Take the time to fill out the page completely, ad logos, profile pictures, cover pages, etc.

Invite Your Friends

This might seem like a silly step, but there are certain changes you can’t make to your page until you have followers. For example if you notice the Facebook page for this website is www.facebook.com/ownthecorporateladder. We created a Username “ownthecorporateladder” that makes it easier for us to link our page on our website and easier for our audience to find us. You cannot make that change until you have a minimum of 25 likes. So start inviting your friends to like your page. Also, the more likes and followers you have the more legitimate your business appears. People are much more likely to buy a product off of someone with 10,000 likes than with 100.

Setup an Ad Account

Go to the Facebook Business Manager and set up an ad account to link to your new business page.

The Basics of Facebook Ads

The first step to understanding Facebook Ads is understanding the terminology.

An Ad Campaign is the top layer of your ad strategy.

What are you trying to accomplish with your ad? If you’re trying to get sales on your e-commerce store then you want to create a conversion campaign.

The next step to creating a FB Ad is defining your Ad Set. You can have multiple ad sets within a campaign. The ad set is where you identify your target audience and set your budget.

There’s a couple different sections of this screen I want to bring to your attention. First the Conversion section…

This is where you tell Facebook how to track your conversions. In this example Facebook is using a Facebook Pixel (I’ll explain that later in this article) to keep track of how many purchases I get on my website. Facebook’s algorithms actually do a decent job keeping track of your results and adjusting who sees your ads in order to keep producing sales. The fact that they have the power to do that might be frightening to some of you, wait til we get into lookalike audiences, you’ll really be freaked out.

Next is the audience size. This is where Facebook uses the info you enter to give you an idea of how many conversions this ad will generate. The most important part of this section to consider is the dial at the top. Honestly I have no idea how Facebook determines whether your target audience is consider to specific, too broad or just right, but however they do it… it’s effective. So make sure when you specify your audience the dial is pointing straight up.

Next is where you define your audience.

This will take time and a lot of tweaking. You need to determine who your customer is. This is pretty powerful. You can filter by demographic, geography, gender, age, language, but more importantly by interest. What is your audience into? What interests do they have? This could be a difficult thing to figure out, but take the time and figure it out. Don’t forget about your competitors too, if you’re selling funny t-shirts, see if you can filter by people that are interested in another company selling funny t-shirts…

Another place for you to get more information about your audience is the Audience Insights Tool.

In the audience insights tool you can enter in different filters and see how it affects your target audience. You can also click on the Page Likes tab on the top and see what people in that target audience like. There’s a lot of information at your fingertips with this tool so take your time and play around with it. It can really give you an understanding on who your target audience is.

Once you figure out who your audience is you have to determine where to target them. That’s when you get to the Placements section.

In my experience I get rid of all of the “Automatic Placement” non-sense and I stick with the basics. I use the Facebook News Feed and the Facebook Right Column. That’s where I’ve had the vast majority of my success. Also, I wouldn’t recommend combining Facebook and Instagram Ads in one Ad Set. Duplicate your ad set and make one for Facebook and one for Instagram. I’m not entirely sure why it works better that way, but it does, trust me.

As far as your budget goes, do what you feel comfortable with. Please understand that a lot of this is going to be trial and error at the beginning. You are going to spend money so if your budget doesn’t allow for spending $100 per day, then don’t! You should be able to spend $10-$20 and know whether or not an ad is going to be successful. If you don’t have any sales at that point, shut it off and retool.

Now on to the actual Ad…

You can create an ad a few different ways. You can use a single image or video, a carousel or a collection. I typically keep it simple and use single images or videos. I have not had much luck with carousels, which is curious because any time I’m scrolling through my personal FB feed I always find myself flipping through carousel ads. Anyways, chose your Facebook page in the Identity section and then choose the format for your ad.

Once you choose your format, you’ll add the media to your ad.

Here’s where you actually create your ad. In the Website URL box you need to put the link that goes directly to your sales page. Whether that’s your Shopify store or ClickFunnel or Blog or whatever. In the text section is where you’ll put the text that shows up on the news feed. As you can see in the image above I entered text in each of the boxes so that you can see where that text shows up on the actual ad. Take the time necessary to make sure all of your text looks nice. Don’t be afraid of putting a longer post in the Text section, long posts on Facebook are really effective for some reason.

Confirm – Publish

Once you have that all filled out you click confirm or publish and your post will be submitted for review by Facebook. Be prepared for a wait. Facebook ads can be reviewed as quickly as 30-60 minutes or take as long as 24 hours. So be patient.

Facebook Pixels

Before you jump into Facebook Ads once thing you need to do is read about and understand how Facebook Pixels work. Have you ever been browsing a website and then the next day find an ad for that website in your Facebook News Feed? Creepy right? It’s actually not as creepy as you’d think. That website you were surfing uses a Facebook Pixel. A FB Pixel is a line of code that’s installed on a website to tell Facebook you were there. (okay I guess it is pretty creepy) Once Facebook knows that, a company can use that data to show you ads and re-target you. That’s also how Facebook knows when your customer makes a purchase. You need to set up a Facebook Pixel and install it on your website. Facebook Ads are almost not even worth bothering if you don’t use a Facebook Pixel, it’s that important.

So here’s how…

First you’ll want to be in the Facebook Business Manager again and click on Pixels.

Once you’re at the Pixels screen click New Data Source on the left side and this window will appear.

Name your pixel and enter the URL for the website or ClickFunnel you’re trying to track.

On the next screen you can either install your Pixel manually (don’t worry it gives you instructions) or if you’re using one of the Facebook partners like Shopify you can click that and it’ll walk you through connecting your pixel step by step.

Once your pixel is connected you will be able to use it to create an audience in your campaign. By targeting people that have already been to your website you’re only marketing to a warm audience. These people are more likely to complete a transaction and spend money on your website.

Lookalike Audiences

Okay now for the creepy part…

This is the final piece to the puzzle and probably the most powerful and lucrative. Unfortunately until you start getting sales, it’s not really effective.

Facebook can use the data that is provided by the 200+ million users to create what’s called a Lookalike Audience.

So let’s say you have had some success on your site and you have a customer list of over 100 people. Since they purchased something on your website you have their email addresses and names. You can upload that information into Facebook Business Manager and create a custom audience.

How’s it work you might ask? Well Facebook has data points on each and every one of us. Facebook will take your list of customers and figure out what they all have in common. Then they will compare those data points with the rest of the users on Facebook and then spit out an audience of 2.2 million people (or more) that are just like your customers and thus likely to also be willing to spend money in your store.

I know it’s disturbing but we’re entrepreneurs here so look at the bright side, Facebook just compiled a list of almost guaranteed customers for you to market to. Once you have a Lookalike Audience, that’s when you’ll start seeing the sales come in.

So here’s how to create your Lookalike Audience…

First go back to the Facebook Business Manager menu and click on Audiences.

Then click on Create Audience and click Lookalike Audience, this menu will appear.

The first step you’ll want to put your cursor over where it says “Create New Source” and choose Custom Audience. Once you do, this menu will appear:

For this example you should use customer list. You can also create a lookalike audience based on the results of your Facebook pixel, however in my experience you’re better off creating an audience based on actual paying customers, not just people that visiting your website.

Choose Use a file that doesn’t include LTV because at this stage of the game you probably don’t have a “Lifetime Value” metric in your database.

Next follow the directions to upload a CSV file with your customers information. Once you click next Facebook will compile the data and supply you with the lookalike audience. I want to take you back to the initial screen and show you a couple other items you need to be aware of…

Section 2 you need to identify where your target market is. If you’re selling and shipping products only in the United States make sure you enter that information there. Section 3 asks how large your audience should be. You may think bigger is better, but you’d be wrong. If you’re marketing in the entire United States (220 million FB users) you only want to target 1-2% which would be 2.2-4.4 million people. By keeping your target smaller you’re only going to be marketing the people that had the most data points in common with your customer list.

Conclusion

Alright ladies and gentlemen, that was a long post, but I really hope that you learned something from it. There’s money out there to make if you know how to get your product or service in front of your customer. With 220 million users on Facebook in the United States alone, Facebook Ads can be a huge part of a successful marketing strategy.

If you have comments or questions please leave them below and I’ll try to help you as much as I can!