How To Make A 12x Return On Your Ad Spend With Facebook Dynamic Retargeting

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A while back, I published an article entitled “A Facebook Advertising Strategy For Ecommerce Stores That Really Works”.

And in that post, I outlined my strategy for making Facebook advertising profitable by sending targeted customers to a content based landing page and collecting emails from my potential customers.

How To Make A 12x Return On Your Ad Spend With Facebook Dynamic Retargeting

I then developed a multi-step email autoresponder sequence that warmed customers up so that when they were finally ready to make a purchase, they would buy from our online store.

Now this Facebook advertising strategy works extremely well and I highly recommend that you all give it a try with your own online stores. But there was one crucial component missing from that post that I’m going to talk about today.

In addition to marketing to potential customers via email, you also need to bring existing shoppers back to your website through a method known as retargeting.

A Brief Primer On Retargeting

Facebook Custom Audiences

For all of you who are unfamiliar with the term “retargeting”, here’s a quick definition.

Whenever someone visits your website, you can have Facebook (and Google) give you a special piece of javascript code called a “retargeting pixel” that allows you to track visitors who have visited your site.

And if the person visiting your site happens to have a Facebook account and is logged into either the Facebook app, messenger or Instagram, they are tracked in Facebook’s database. As Facebook collects more and more data about the visitors to your site, you have the option of running advertisements specifically targeting these people.

These ads are called retargeting ads because you are bringing previous visitors BACK to your website.

And this practice is extremely powerful because the returning customer is targeted, knows about your shop already and is an order of magnitude more likely to buy.

My First Foray Into Facebook Retargeting

When I first started running Facebook retargeting ads, I did so in a very manual fashion which I’ll describe below. (Note: At the time, this was the best way to do it)

For example, I created separate “custom audiences” in Facebook according to what type of product a customer looked at on our site.

Note: Creating a Facebook “custom audience” is simply a way to group and to segment the different people that visit your website.

Custom Audiences

In the example above, I have 4 separate custom audiences. One audience consists of people who looked at pillowcase products on our site. Another audience shopped for handkerchiefs. Another group was for people who looked at our napkins. You get the idea…

And for each of these groups, I showed them a completely different Facebook advertisement.

For example, people that shopped for pillowcases were shown this ad.

Pillowcase ad

People that shopped for personalized handkerchiefs were shown this ad.

Handkerchief Ad

And people that shopped for our napkins were shown this ad.

Napkin Ad

Basically, I had it set up so that anyone who visited my online store was only shown an ad for products that he or she was interested in.

Pretty cool eh? But as it turns out, there were some major problems with running retargeting ads this way.

The Problem With Regular Retargeting

First off, don’t get me wrong. Running retargeting ads in the manner described above works extremely well and the conversion rate is off the charts. But there is one major disadvantage.

Because people who see Facebook ads tend to get tired of seeing the same ad over and over, you have to constantly rotate your ad creatives in and out in order to keep things fresh.

You simply can’t run with the same retargeting ad over and over again otherwise 2 things will happen.

  • People will get tired of your ad and stop clicking
  • Facebook will notice the reduced activity and will stop showing your ads at all or at a severely reduced frequency

This phenomenon is known as ad burnout and it’s a pain in the butt for shop owners like myself who don’t have the time or resources to constantly create new ads on a regular basis.

Facebook Dynamic Retargeting Ads

Facebook Dynamic Ad Retargeting

But what if there was a way to create ads on the fly that showed customers exactly which products they looked at on your site? What if there was a way to tell Facebook about all of the products in your online store and only show potential visitors ads that have the highest chance of converting?

You can do exactly that with Facebook Dynamic Ad Retargeting. Dynamic ad retargeting is the act of showing and creating highly relevant ads on the fly with your existing product database.

This is by far the most powerful type of ad that I’ve used in my online store thus far and it converts like crazy.

It gets all of the benefits of regular retargeting without the maintenance. Here’s a sampling of my results

  • My overall conversion rate for Facebook Dynamic Ad Retargeting is approximately 16%
  • My return on investment (ROI) is over 12X
  • It costs me a measely $3.63 per conversion

How To Implement Facebook Dynamic Ad Retargeting

Here are the exact steps on how to start running Facebook Dynamic Ad Retargeting for your own online shop

Sign up for a Facebook business account

The first thing you need to do is create a Facebook business account at http://business.facebook.com. For some strange reason, they won’t let you run these ads with a regular account and this fact is not intuitive during the setup phase.

Upload Your Products To Facebook

This step requires a little bit of technical know how but you need to send a feed of all of your products to Facebook. But what’s nice here is that Facebook’s product feed format is nearly identical to that of Google Shopping.

So if you are on Shopify or BigCommerce, then this is done for you. Also, Open Cart has a Google shopping feed built in as well.

Simply go to your Facebook business page and tell Facebook where to find your feed. This what my feed looks like as an example.

Sample Product Feed

Implement Your Tracking Pixel

This is arguably the hardest step in the process because you have to go in and add some custom code to your shopping cart.

But in reality, it’s not that hard and any dev can probably do it in 20 minutes. In a nutshell, you need to tell Facebook which pages are product pages and correlate those pages with your product feed.

For example if someone is looking at my Floral German Guipure Lace Handkerchief (shown below), I need to tell Facebook that the visitor is looking at item 535 which corresponds to that item in my product feed.

Facebook Tracking Pixel

Create The Ad

Creating the ad is the easy part. Facebook has a few ad formats that automatically do what you want. Here’s an example of my Facebook Dynamic Product Ad. In my ad, I show the last several products a customer looked at in addition to product names and product descriptions. This ad format works awesome!

Facebook Dynamic Product Ad

Conclusion

If you aren’t running Facebook Dynamic Product Ads, then you are likely leaking customers from your shop. If you combine retargeting with your outbound advertising then you can greatly improve the sales for your online store.

The key to any form of advertising is realizing that customers may not be in the mood to buy when they first encounter your website. By bringing people back over and over again over the course of days, weeks or months, you have a much higher percentage of obtaining the sale.

Good luck!

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4 thoughts on “How To Make A 12x Return On Your Ad Spend With Facebook Dynamic Retargeting”

  1. Hi Steve!

    You are soo much inspiring person!
    I will definitely implement your great instructions on my new t-shirt business that I have just started.

    Also, Would you mind if I share my new business idea with you privately?

    Cheers,
    Hamza

  2. I’ve wondered how amazon and cars.com does that! Incredibly creepy… and yet I keep on clicking on them because it is more of exactly what I want.

    And often I buy.

    This is ninja-level stuff. I’m surprised you didn’t keep it inside your course!

    Another reason we keep coming back! Thanks!

  3. Hi Steve, thanks for sharing this article!

    I haven’t gotten a chance to play with dynamic products and on Facebook, so have one question regarding the pixel implementation.

    You mentioned that a developer can do that in 20 minutes – so how can that implemented? Do you have to go manually on each page and adjust the pixel so that the product id matches the one in your product list? Or did you have a function made for that?

    Cheers!
    Adomas

  4. Is there a particular variable used on Big Commerce to generate the ‘content ids:’ tag? I have been trying to implement this all day but I do not understand how the pixel knows which page a visitor has been on? Please help!

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