Many beginners who approach Facebook ads feel discouraged or say it doesn’t work, In this article, I will share with you my experience using Facebook ads for my business

I’ll go over the fundamentals of Facebook ads theory and mechanics with premium formulas because without the proper understanding of how the Facebook machine thinks, you will never truly be able to figure out how to troubleshoot your ads during times of difficulties, which is why I decided to create this ultimate guide to Facebook ads to educate you on how machine learning works.

Theory and Mechanics

Why Facebook’s CBO is the most powerful method to run ads, the way Facebook determines your total ad score, which ultimately decides how you win auctions, and where your advertisements are placed.

By the end of this article, you should have a solid understanding of how Facebook works

Why Choosing Facebook Ads for your business?

We have tested a variety of ad platforms such as Google ads, Snapchat, TikTok, and Instagram, although we have seen success with these platforms,

Facebook is still the best option to start and growing your dropshipping store.

What are the benefits to use Facebook Ads?

Simply Facebook Ads due to the updated algorithm has the ability to:

  • Fast scaling your targeted audience
  • Huge potential reach
  • Amazing Targeting options
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Facebook has more potential reach, considering that has more than 2.5 Billions active users and it is the 3rd most visited site after Google and YouTube,

with Facebook, we need to take into consideration that not only allows you to reach people with your ads but how many people you can effectively target,

having a huge potential reach with a poor targeting power simply will leave you with mediocre results,

unless you’re selling something that every single person on Facebook is willing to purchase.

A variety of targeting options

Specific audience based on age, gender, interest, location

Target audiences assembled by machine learning

Once you have found a profitable audience, you can tell Facebook to find a similar audience to show your ads,

resulting in a better-targeted audience to use for a lookalike.

Scalability

Thanks to the huge potential reach together with the targeting you will be able to quickly scale your ads faster.

The machine learning algorithm will start to generate audiences in such a way that otherwise with the regular targeting you couldn’t, also,

if you originally only targeting people in a particular country,

you can expand to other countries to find similar types of people to sell your goods to.

Facebook Machine Algorithm

Data is the foundation of any machine learning algorithm,

machine learning is the process to find patterns in data to make connections,

Facebook machine learning

there are few ways to collect data to be used for the algorithm,

first, they take into considerations all the available data you provide them on Facebook, as well as on Instagram and WhatsApp, this includes data like:

  • Age
  • Sex
  • Location
  • Likes
  • Shares
  • Interests
  • Groups
  • Who you interact with

Another way they collect data is by analyzing your interest and browsing activity for some websites,

if you are wondering how this is possible, it is to something called a Facebook pixel, what is the Facebook pixel?

essentially the Facebook pixel is a piece of code that allows the website to keep track of its visitors and later advertise them on the Facebook platform, so whenever you visit a website with the Facebook pixel installed,

it will record the activity in the back-end, these two means give Facebook all need to know to accurately profile you as a person, and based on this data they create ways for advertisers to target you on Facebook.

How the algorithm learn and optimize?

The Facebook algorithm has different ways to optimize, let’s take as an example people who have engaged with a pet post,

for those users who engaged with the content of the post Facebook will group these users into one or more following interests, for example:

  • Pet owners
  • Pet lovers
  • Daschund lovers
  • Daschund

Now, let’s assume that as an advertiser you are interested in selling a dog bed that is specifically made for Daschund the target interest listed above would be a good place to start collecting data,

even if you would not make a sale, at least your Facebook pixel has collected some data,

and the next time you will target a similar audience Facebook Pixel will be already warm enough to get you sales.

Whenever you target any particular audience, Facebook will make every effort to pick smaller groups within the audience to target,

it will essentially take a small sample in hope of finding common data points and expand this audience based on those data points, let’s take as an example our daschund dog bed, you launch your ad campaign targeting a group of people that have an interest in daschund dogs with an audience of 20 million people,

Facebook then takes a subgroup of those people within that group, diversifying them based on factors like:

  • Sex
  • Age
  • Location

For example

Even though your audience size maybe 20 million people, your ad will be shown to a small group of people on the first day,

let’s say in our case 2000 people, once the subgroup of 2000 people has been served the advertisement,

the algorithm will determine which of those people reacted positively to your ad.

Now, le’s say that out of 2000 people 1000 of them reacted positively to your ad,

what Facebook will do is take 1000 positive responders and try to find an even larger subgroup of people within your original group of people,

perhaps this time it may expand the audience to 30.000 that may be interested in daschund,

but primarily targeting people who are 20-30 years old and own a dog.

Facebook pixel & lookalike audience

There seems to be a lot of confusion among beginners about the Facebook pixel,

What is the Facebook pixel?

The Facebook pixel is a piece of code placed on your website which allows you to send data back to Facebook servers when someone takes an action on your website,

what do I mean by that? simply Facebook will track everyone on your website that take the following actions:

  • Visit your website
  • Add to cart
  • Purchase a product

Every time someone takes these actions,

your website will send these data back to Facebook servers with identifying information about the person who performed that action.

The Facebook servers then accept this data, who logged into their system, associating that user with a particular action they performed.

What you can do also is take people who performed certain actions on your website and turn them into a targetable audience.

Custom audience

Custom audiences are the audience that you can create on the Facebook ad platform, which is specified based on interactions that were shared through the Facebook pixel, as well as people who have interacted with your page, or your Facebook ad, for example 

  • Likes
  • Shares
  • Emoji

So you could create audiences of people that have visited your website in the past 180 days,

at this point you can do two things:

  • First, Target custom audience and serve ads to the people who are already aware of your brand
  • Second, creating a lookalike audience by using your custom audience

What are lookalike audiences?

Lookalike audiences are essentially audiences similar to a specified custom audience

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For example

Let’s say you had a custom audience of people who purchased a product from your store,

if you create a lookalike audience based on a custom audience, Facebook will take your custom audience and find other people that may be purchasers as well, based on any data like interests, demographics, age, and gender.

Similarity

When you create a lookalike audience you can specify how similar of an audience you want to have, ranging from 1% to 10% similarity.

1% similarity will give you people that are more similar to your original audience than people that are 10% similar.

The more similar audiences such as 1% can help you refine in your ideal customer,

while 10% will find people still likely to purchase but, aren’t as similar.

Facebook Ads Structure

Facebook ad campaigns are structured into three different component

  • Campaign
  • Ad sets
  • Ads
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Each campaign must contain one or more ad sets, each ad sets must also contain one or more ads, this is how every campaign is structured

The primary purpose of a campaign is to provide to the algorithm the objective it will be optimizing for.

In total there are 11 objectives:

  • Brand awareness
  • Reach
  • Traffic
  • Engagement
  • App Installs
  • Video Views
  • Lead Generation
  • Messages
  • Conversions
  • Catalog Sales
  • Store Traffic

As an example, if you would choose video views objective you are primarily going to show your ad to people who are most likely to watch your video,

while choosing the conversion objective will show your ad to people who are most likely to convert after seeing the advertisement.

Now as a dropshipper you are going to almost use exclusively use the Conversion Objective, the other objects are generally unreliable to generate cost-effective sales, they are usually used for different business models, which we are not going to cover in this article.

The Adset level

The adset level is where you will primarily be defining what audience you want your advertisement to be shown to.

To define the audience you must specify the following settings:

  • Targeting
  • Delivery Schedule
  • Bidding
  • Placement

Targeting

Targeting allows you to specify various details about who you want to serve your ad to, you can choose to specify factors like age, gender, location.

You can also specify what types of actions you want the algorithm to optimize for, currently, Facebook has the following actions available.

Purchase

Lead Generation

Complete registration

Add to cart

Custom

Customize product

Donate

Find location

Schedule

For example

Specifying that you want to optimize the add to cart action would serve your ad to people who are most likely to add to the cart, likeness specifying that you want to optimize for purchase would serve your ad to people that are most likely to purchase when it comes to picking an action, I recommend choosing the optimization (purchase) that is most likely to bring conversions.

We found that optimize for other actions does not give the best results

For instance

Selecting people who view content will only bring people to view your page, but don’t do anything else, in case you want to learn more about the action types, you can read more here

Schedule

Scheduling allows you to specify when the algorithm should begin to display your advertisements on Facebook.

You can specify the particular day of the week as well as the hour of the day for it to begin running.

Based on the time of the day you pick out, Facebook will also calculate something called pacing.

Pacing refers to the rate at which your budget is spent over the day. What is important to know is that pacing is one way the algorithm determines who to show your ad to, which will affect the performance, just to keep it simple, think it like this.

If you rush the pacing for example to start the ad at noon Facebook will have to start serving the advertisement to people who are not likely to convert to meet the daily budget at the end of the day, this will always result in lower performance, with a higher cost per/action for the adset you are optimizing for, so I would recommend scheduling your ad at midnight to give the algorithm enough time to spend your budget throughout the day and serve your ad to people that are more likely to take actions you are optimizing for.

Bidding

Bidding refers to how much you want to spend in the ad auction

What is the ad auction?

The ad auction is simply a mechanism that Facebook uses to determine which advertisers competing for one audience gets to show their ad.

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You can choose to specify your bids, which is known as manual bidding, or let Facebook handle things that are known as automatic bidding.

Placements

Refers to the various areas within Facebook’s available platform that your advertisement can be displayed on.

For example

Facebook news feed, Instagram stories.

When it comes to selecting a placement you can choose a specific placement or automatic placement

The automatic placement allows the Facebook algorithm to choose the placement that it thinks will perform best given your particular advertisement.

We find that allowing Facebook to pick outplacement works the best, especially with the ongoing improvements in the machine learning algorithm, it has become so advanced that not only knows the best type of placement given your ad and audience, but it also knows that some placements are better than others at a particular time throughout the day.

Doing so will adjust the budget for each placement throughout the day to get you the best result possible.

The Ad

This is where you will provide Facebook with the content you wish to promote

There are different types of content you can choose from, such as:

Carousel ad

Images

Videos

Collections

Each content will function with the same method by sending people to your website via URL this can be with your link placed in the text content of your ad or a shop now button if you choose to include one.

If you want to learn more about dropshipping and my validation methods to discover winning products make sure to subscribe to stay updated.

To sum up

At this point, you should have a fundamental understanding of the Facebook structure, how the algorithm works and its mechanics, I know this is a ton of information, and if there is something you may not remember I strongly recommend you read again this article or if you have any questions, leave them down in the comment section.