How to Make Money with Facebook Ads (Best Methods)

Facebook ads remain one of the most effective forms of digital marketing.

But that does not mean you can just whip together a campaign and expect to see results.

At Reliablesoft, we have managed Facebook Ads accounts for clients in a variety of different industries, helping them generate sizable returns on their investment.

In this guide, I’ll show you some of the best practices you should follow to make money with Facebook Ads.

Best Ways to Make Money with Facebook Ads

1. Track the right on-site metrics
2. Use custom and lookalike audiences
3. Setup your Facebook sales funnel
4. Use Video Ads in your campaigns
5. Use Cost Cap to control your costs
6. Split your campaigns into countries/regions
7. Optimize your Landing Pages
8. Monitor the right advertising metrics
9. Use a Facebook Catalog for Products

1. Track the right on-site metrics

The first step to making money with Facebook Ads is to ensure you are tracking the right metrics. Simply put, if you don’t know what is happening on your site, it’s hard to make improvements as needed.

Here are the important on-site metrics you should be tracking:

Purchases - This metric measures the total number of purchases that are the direct result of your Facebook Ad campaigns. It is a rather clear indicator of how effective your advertising efforts are.

Add to carts - This metric measures the number of people who added a product to their shopping cart after visiting your site via a Facebook Ad. You’ll want to compare your total add-to-carts with your total purchases. This will tell you your abandoned cart rate. A high abandoned cart rate is a sign that you may need to make changes to your customer experience.

Checkouts initiated - This metric measures the number of people who initiated a checkout on your store but did not complete it. Like add-to-carts, you want to compare your checkouts to your total purchases. This will give you an abandoned checkout rate.

Form submissions - This metric shows how many people completed a form like an email opt-in. It is important to track during ad campaigns as not every visitor is going to convert on their first visit.

Collecting someone’s email gives you the ability to market to them directly, helping to bring them back to your store.

2. Use custom and lookalike audiences

One of the best features of the Facebook advertising platform is the ability to create highly targeted audience segments.

You can filter your targeting by a wide range of criteria, increasing the chances your ads get in front of your target market i.e. people who are actually interested in your business.

Two audience targeting options that can go a long way in making money with Facebook Ads are custom audiences and lookalike audiences.

Custom audiences

Facebook custom audiences allow you to create defined lists of people to target with your campaigns. Here are some of the different types of custom audiences you can make:

Website visitors - You can create all kinds of audiences for the people who visit your website. This could be every website visitor, people who visited a specific product page, people who visited a category page, people who visited the cart page, and more.

You are able to choose the timeframe when defining the audience so you can specifically target recent visitors, or run a re-engagement campaign for people who haven’t visited in a while.

Customer list - You can upload a list of previous customers to create a unique audience for Facebook advertising.

Facebook will use the emails you provide to link the customers to their Facebook and Instagram accounts. You can then run campaigns to retarget these people.

App visitors - Similar to website visitors, you can create custom audiences for people who have visited your mobile app.

Engagement - This type of custom audience allows you to target people who have engaged with your business pages on Facebook or Instagram

Lookalike audiences

Facebook lookalike audiences allow you to reach new prospects by targeting people who share characteristics with your current audience.

This is an extremely powerful feature of Facebook Ads that can contribute a lot to running profitable Facebook campaigns.

You create lookalike audiences using source audiences. Source audiences are created with the same data sources used for custom audiences:

• Website visitors
• App visitors
• Facebook and Instagram engagement list
• Customer information list
• Offline engagement list (in-person interactions, phone calls, etc.)

You can use multiple lookalike audiences at a time during a campaign while also using other targeting parameters like age or interests.

3. Setup your Facebook sales funnel

It’s important to understand that one-off advertisements are not going to lead to good results. If you want to have success with your Facebook Ads, you need to treat them like any other marketing channel.

This means you need to create a funnel. Marketing funnels are based on the idea that customers tend to go through different stages before they are ready to buy.

Funnels segment customers into different groups based on their current interest level. They then send messaging that is relevant to their current funnel stage.

As the customer engages with the business more and more, they gradually move through the funnel until they are ready to make a purchase.

A traditional marketing funnel has some variation of the following stages:

• Awareness
• Discovery
• Consideration
• Conversion

The best practice for Facebook Ad campaigns is to use a condensed version of this funnel. This is because the success of your campaigns depends heavily on the amount of money that you spend, and the resulting revenue that investment generates.

Increasing awareness is great, but it is hard to measure and does not lead directly to sales. Instead, your campaigns should be optimized for easily measurable actions like sales.

As such, we like to use Facebook sales funnels with the following three stages:

Acquisition

At this stage you find new audiences to use for your ad campaigns. The goal is to warm up the prospects before sending them through the rest of your funnel. You can start with custom audiences and lookalike audiences.

With more experience, your acquisition campaigns will become more effective at moving quality prospects through your funnel.

Retargeting

At this stage, you target people who have gone through the acquisition stage but have yet to result in a sale. You can advertise to people who:

• Saw your ad but took no action
• Engaged with your Facebook business page
• Clicked-through an ad to your ad website
• Viewed your Facebook shop Catalog

The goal is to generate sales at a lower cost than the previous stage. Because the prospects are warmed up, they should convert at a higher level.

Retention

With the retention stage, you promote your ads to your existing customers. You can use your customer data to promote highly targeted cross-sell and upsell products.

Different ad types like dynamic product ads can help automate this process.

In a way, this stage creates a feedback loop to the first stage of the funnel. Analysis and traits from your existing customers can be used to create custom and lookalike audiences to target individuals at the start of the acquisition stage.

4. Use Video Ads in your campaigns

Videos are highly engaging and a great way to improve the effectiveness of your Facebook campaigns.

A poll from Databox shows that nearly 70% of marketers note that video ads perform better than image or all text ads.

When it comes to Facebook video ads, shorter ads perform better. Research shows that videos over 15 seconds have a higher abandon rate. This is why Facebook recommends that you keep the videos under 15 seconds.

The ideal video length is around 10 seconds. This amount of time has shown to yield the best results.

It’s important to engage users early in the video. People who make it through the first three seconds are more likely to watch up to ten seconds.

Along with native video ads, videos can be used with a variety of different ad types including:

• Slideshow
• Stories
• Carousel
• Collection
• Messenger
• Instant Experiences
• Premium video

Here are some best practices you can follow to improve the performance of your video ads:

Prioritize mobile devices - People are more likely to watch videos on mobile devices. Look to use vertical videos as they are better suited to mobile devices and get more engagement.

Focus on visuals over sound - Most videos are viewed without sound. You should structure your ads so that they make sense and convey their message without audio.

Use shorter videos - We already touched on this but it can’t be overstated. Use 10-second videos that capture attention immediately.

Optimize your thumbnail images - Facebook gives you the option to custom your video thumbnail. You should use an image that will capture your audience’s interest and encourage them to watch the video.

5. Use Cost Cap to control your costs

Optimizing your ad spend is a critical part of generating a positive return on your Facebook advertising campaigns.

Choosing the right bid strategy can help you do this. One effective bid strategy worth considering is “cost cap”.

With cost cap, you provide Facebook an average amount for the cost of the event you are trying to optimize for. This could be an add-to-cart, a sale, or any other measurable action.

Facebook tries to maximize the number of these actions without going over the average cost that you set.

They dynamically adjust bidding as high as needed to get the best results while keeping within your total budget.

It is a solid option for businesses looking to maximize their results while staying under a certain cost per action (CPA).

An example would be an eCommerce business that wants to acquire as many new customers as possible without spending over $50 to acquire each customer. In this case, the optimization event would be a purchase and the average cost per optimization would be $50.

During the learning phase, your costs may be over the cap as their algorithm figures out the best way to optimize your bids.

Facebook recommends you to use their full ad budget as it allows them to better learn and optimize based on your goals.

6. Split your campaigns into countries/regions

With Facebook advertising, you can segment your ad campaigns based on a variety of different geographic criteria.

You can search for specific global regions, countries, states, counties, cities, and zip codes that you want to target. You can also set a filter for the sizes of the cities to include.

It is recommended to avoid grouping multiple countries or regions into the same campaign. Splitting your campaigns into different geographic regions can lead to better performance.

The best ads and copy for one area may not be the best for another. By segmenting your campaigns you can use more targeted ad creatives. You can even add the name of the region or city to the ad to better resonate with your audience.

With geographic segments, you have more control over your budgeting and cost control.

If one area performs better than another, you can increase your spending for that area.

If an area underperforms, you’ll have the ability to scale back your ad spend, or exclude that area entirely.

You can quickly find this data by looking at your campaigns in Facebook Ad Manager and going to Breakdown > Country.

7. Optimize your Landing Pages

If you want to convert your visitors into sales, you need an effective landing page design. Without an attractive landing page, visitors will simply bounce after arriving on your site.

Because the majority of Facebook traffic comes through smartphones, it is essential to optimize your landing pages for mobile devices.

Responsive web design can help adapt your web pages for mobile devices but it doesn’t add those small little touches that create a great user experience.

Here are some steps you can take to improve your landing pages on mobile:

Focus on speed - You want to ensure that your mobile pages load quickly. If not, visitors will leave without taking action. Reduce the page size, compress images, and consider using a progressive web application (PWA).

These use APIs to create a native app-like experience for your mobile site. They load faster and provide a more responsive user experience.

Create unique mobile landing pages - An efficient way to optimize your landing pages for mobile is to create landing pages designed solely for mobile devices. This will save you from having to adjust the elements of a typical web page.

You can create a segmented campaign to only target mobile traffic, using the mobile-specific page as the landing page.

Optimize forms - Bulky email sign-up forms should be condensed so that they can fit on the mobile screens without taking up too much space.

Right shorter copy - Users have less screen space on mobile devices. You should shorten your copy so that they can read entire sections without having to scroll

Limit images - Images take up a lot of space so it is recommended to limit them on mobile landing pages.

Condense the navigation menu - Mobile screens don’t have space for a mega menu. Stick to the collapsed “hamburger” menu that guides users through the different levels step-by-step.

8. Monitor the right metrics

We’ve discussed tracking your website metrics, but it’s also important to monitor your advertising metrics.

In a certain sense, advertising can be viewed as simply a numbers game. You set target metrics that you calculate will lead to positive results. If you hit those numbers, then you are successful.

Let’s examine the important advertising metrics you should carefully monitor:

Click-through rate - This metric measures what percentage of people who see your ad click on it to arrive on your landing page. It provides a good overview of how interesting and engaging your ads are. It also helps inform you whether you are targeting the right audience.

If a small percentage of people click on your ad it could be boring. Or, you could be targeting an irrelevant audience.

Link clicks - This metric measures the total number of people that click on your ads.

Amount spent - This metric measures the total amount you have spent on a campaign. Assuming you are operating on a budget, it’s important to track your ad spend vs your clicks, purchases, and revenue.

Impressions - This metric measures the total number of times someone views your ads. It shows how effective you are in getting in front of your audience and is influenced by bid, budget, and targeting.

Reach - This metric shows the number of people who saw your ads at least once. It differs from impressions in that it does not count multiple views per person.

CPC (cost per link click) - measures the average amount you pay for each click.

Cost per add to cart - This metric shows the average amount you spend in ads to have a user add an item to their cart.

Cost per result - This metric shows the average cost it takes for you to achieve a campaign objective. It is a good indicator of how efficiently your campaigns can drive results.

Purchases conversion value - This metric measures the total value of purchases made as a result of your ad campaigns.

Cost per purchase - This metric shows the average amount you pay in ads to generate a purchase.

9. Use a Facebook Catalog for Products

Facebook Catalog is an integral part of running successful ad campaigns for eCommerce businesses.

It allows you to upload and hold all the information about your products so that you can more easily advertise those items on Facebook and Instagram.

Some of the different ad types you can create using your catalog include:

Carousel Ads

These display up to 10 images or videos. Each has ad copy under the image or video. There is also a copy above the carousel. Users can swipe or click through to see the different visuals.

They are an effective ad choice when you want to show off different products or multiple angles of the same item.

Collection Ads

These ads only appear on mobile devices. They contain some copy, a featured image, a row of four product images (three on Instagram).

When a customer taps the ad, they can see the product images in more detail, along with the price. The ads are highly engaging and tend to perform very well as they were specifically designed to optimize the mobile experience.

Dynamic Ads

These ads allow you to automatically display products to users based on previous engagement with your business. They work similarly to dynamic ads on other platforms like Google.

When a customer visits your store, the Facebook pixel will track all their actions. You can then set up a dynamic ad campaign to automatically show them ads related to the actions they took on your site.

For example, if they viewed Products A, B, and C, a dynamic ad will trigger that looks like a carousel ad, showing them an image and text for each of those products.

Collaborative Ads

These ads allow brands and retailers to work together to run dynamic ad campaigns. Retailers create a segment of their product catalog that contains a brand’s products.

The brand can then run dynamic campaigns for their products that are listed in the retailer’s catalog. Like regular dynamic campaigns, they are used to target visitors who have engaged with the retailer’s business.

The catalog also gives you the ability to create a Facebook Shop. This is a digital storefront that is present on your business’s Facebook and Instagram pages.

Customers can browse your catalog directly from your pages and even check out if they find something that they like.

With Facebook Commerce Manager, you can customize the layout of your shop. You can arrange your listings as you see fit and create collections of items.

Your Facebook catalog can also be used to list items on the Facebook Marketplace, a rapidly growing peer-to-peer marketplace similar to Craigslist.