Case Study: The Facebook Ads Retargeting Strategy That Generated $15 for Every $1 Spent

Ben Levesque • June 22, 2017

 

 

Even though the title of this blog post sounds a lot like click bait, I can assure you that the numbers above are very real.

 

Mad Max is skeptical – via GIPHY

Those numbers are a result of effective Facebook ads retargeting, and in this blog post I’m going to walk you through the exact strategy we implemented for an online fixie bike retailer that went on to generate a whopping 1,529% return on ad spend.

Not a fan of math? That’s a little over $15 in revenue generated from every $1 spent on advertising.

And the best part…

All it took was a small marketing budget, a properly-installed Facebook pixel and a handful of well-crafted Facebook ads.

Regardless of what industry you’re in or type of business you run, the bottom line is that Facebook retargeting can work for you.

So drop the Mad Max skepticism for a second.

By the end of this blog post, you’ll know everything there is to know about retargeting on Facebook and how to use it to grow your own business.

I can’t promise you’ll see the exact same results (hey…we’ve been doing this for a while), but if you follow the same steps laid out in this case study, you’ll at least be putting more money in your pocket than you’re dishing out on Facebook ads.

Sound fair?

Here goes…

Leveraging Facebook Ads Retargeting to Boost ROAS

Myfix Cycles is an online retailer of single speed and fixed gear bikes, selling primarily to Canada’s densely populated urban cities like Toronto, Vancouver and Montreal.

They’re the perfect city bikes—high quality, affordable, and aesthetically pleasing.

fixie-bike-montreal

They asked us for help in managing their online paid advertising, and after the first 30 days of working together, we managed to get their PPC campaigns on Adwords to what we like to call “The Break Point.”

In other words, Myfix Cycles was now acquiring new customers at break-even or better (turning a small profit on each bike sale).

Literally us – via GIPHY

But even though this was an early indicator of success, we knew there was still one big problem…we were paying to acquire website visitors, and the majority of them weren’t buying!

At that point in time, our campaign was a one trick pony: the Myfix website either converted the Adwords traffic into a sale, or it didn’t.

Unfortunately, this is just how the story goes when it comes to online marketing. Not every website visitor is ready to buy, especially not on the first interaction with your brand.

The solution?

Multiple touchpoints with website visitors.

Using Facebook Ads Retargeting to Create Multiple Touchpoints

So far, we paid to get traffic to the Myfix website but only a small fraction of it followed through with a purchase.

That’s when we decided to put together a simple Facebook retargeting strategy to get people back to the website and have a second chance at generating a sale.

Being that the cost of advertising on Facebook is a little lower than on Google, it was worth it for us to serve ads to people that had already been to the Myfix website, essentially increasing the number of touchpoints with potential customers.

Side note: If you want a comparison of Google vs. Facebook, read this in-depth comparison.

As you’ll soon see, this was the key to generating over $15 for every $1 spent on retargeting ads:

facebook ads retargeting

Here’s how we set the whole thing up…

Step 1: Pixel Setup and Conversion tracking

The first thing we did was create a new Facebook pixel and setup conversion tracking on the Myfix website.

To make this entire retargeting strategy work for your business, you have to follow this step—it won’t work otherwise.

This topic has already been covered extensively, so rather than reinvent the wheel, here are a handful of articles that will help you get things going quickly:

Once this was done, it was time to setup our custom audiences.

Step 2: Create necessary Custom Audiences

When it comes to retargeting on Facebook, there are a few ways you can go about it.

One of the best ways, especially for eCommerce stores, is to use Dynamic Product Ads. These automagically show ads to people that have been to your website based on specific products they’ve viewed.

In other words, if Nike.com has Facebook’s dynamic product ads setup and I browse their cool Nike ID shoes on their website, the next time I’m on Facebook I might see an ad like this:

nike-ad

img source – AdEspresso

A little creepy, but extremely effective in getting people to complete a purchase. Give AdEspresso’s in-depth guide on dynamic product ads a read if you want to learn how to set this up yourself.

For Myfix, we wanted to get something up and running quickly, so we opted for basic retargeting ads to start.

The first step was creating a custom audience of past website visitors.

To do this simply head over to your Facebook Business Manager, click on the hamburger menu near the top left and then go to Audiences > Create Audience > Custom Audience:

custom-audiences-facebook

Then, click on website traffic:

website traffic campaign facebook

 

This next screen is where you tell Facebook who to include in your audience so that you can then target these people when you create your ads.

For Myfix Cycles, we created three key custom audiences.

First, we create an audience for the entire website traffic in the last 14 days:

facebok custom audience of website visitors

 

Second, we created an audience for all the people who added products to their carts in the last 14 days:

add to cart custom audience facebook

And lastly, we created an audience of people that made a purchase in the last 180 days:

facebook custom audience purchases last 180 days

For your business, you’ll want to create similar audiences as the ones above. As we continue on, you’ll understand just how these audiences are used for retargeting purposes and it’ll help you come up with your own ideas on how to best setup your Facebook retargeting campaign.

Armed with these new audiences, we jumped into the ads manager and got to work setting up Myfix Cycle’s Facebook retargeting campaign.

Step 3: Facebook Retargeting Campaign Setup

Being that our goal was to get people to come back to the Myfix Cycle’s website and complete a purchase, we created a conversion campaign.

Then, at the ad set level, we made sure to set the conversion event source to purchase:

facebook purchase event

This let Facebook know that the action we wanted to optimize for was purchases.

Remember, the people we planned on targeting were the 98% of visitors that arrived on the Myfix website from our pay per click campaigns but didn’t buy. We knew there a certain level of purchase intent (which is why optimizing for purchases made sense).

With that out of the way, it was time to setup the ad set targeting. Instead of targeting demographics, interests and all that fancy stuff, we simply used the custom audiences we created.

We created one ad set targeting the custom audience that included the entire website traffic in the last 14 days, and we excluded the buyers in the last 180 days:

traffic minus buyers custom facebook audience

The reason for this strategy is simple: people that buy bikes don’t tend to buy again, at least for a few years. We wanted to make sure we weren’t wasting ad budget on people that recently bought.

The second ad set we created targeted the custom audience that included all of the cart abandoners in the last 14 days, and excluded the buyers in the last 180 days.

This pool of people was obviously smaller, but it was made up of people much closer to a buying decision (they already had products in their carts).

We left the demographic settings as is, and selected only newsfeed and right column on both desktop and mobile for the placements. From experience, the news feed and right column work best for retargeting on Facebook.

With targeting out of the way, the next step was to create compelling ads that would get people to come back to the Myfix Cycles website and buy.

Hint: If your business only operates within a certain geographic region, make sure you enter it in the Locations box so that you’re not serving ads to people you can’t provide products or services to. In Myfix Cycle’s case, they only ship to Canada, so it made sense to layer Canada-only targeting on top of our custom audiences in case people from other countries stumbled upon the website organically.

Step 4: Creating ads that convert

The last step in this whole Facebook ads retargeting process is ad creation.

Unfortunately, this is where many business owners start. They spend hours and hours trying to craft the perfect ad, but neglect the setup and custom audience creation that really makes this whole strategy work.

I’m not saying ad creatives aren’t important, but make no mistake—the heavy lifting is done using the custom audience targeting from step 3 above.

Even a mediocre ad can be successful if your pixel, custom audiences and targeting settings are on point. A great Facebook ad will only amplify your results, not fix a broken strategy.

That said, here are the ads we served to Myfix Cycle’s first custom audience (website visitors in the last 14 days minus people that purchased in the last 180 days):

carousel retargeting ad

We reinforced the message their brand stands for and positioned the aesthetic appeal of the fixed gear bikes front and center. Being that Facebook is a social platform, we didn’t want to talk about technical specs. People just don’t care.

Besides, we’re targeting people that have already seen Myfix Cycles’ bikes. All we have to do is put the bikes in front of people again.

For the second ad set targeting people that added something to their cart but didn’t purchase (minus people that purchased in the last 180 days), we showed them this ad:

banner retargeting ad

Again, we put aesthetic appeal front and center because we know that’s why people buy these bikes.

We stressed free shipping to reduce the threat level a little bit and made it clear that there were different styles to choose from to get people to click and view more.

We also added in some emojis because they tend to boost clickthrough rates. In this case, we hit 6.38% with this ad, lowering our cost per click significantly.

With the setup, ad targeting and ad creation out of the way, we turned on our Facebook ads retargeting strategy and waited for the results…

The Results

After a few weeks of running this strategy, it was clear that many touchpoints were needed to make a sale—much more than the initial touchpoint that came in from Google Adwords.

In some cases, we noticed sales were coming in after the 6th touchpoint:

frequency and touchpoints

In the Facebook ads manager, frequency is the metric that lets you know how often people are seeing your ads. We noticed that between 5 and 7 times was the sweet spot for Myfix Cycles, so we knew to keep a close eye on frequency when it started to creep past those numbers (for other metrics to monitor when running Facebook ads, read my in-depth post here).

All in all, the retargeting strategy was (and still is) a success. In just over a month, we were able to help Myfix Cycles generate an additional $3,043 in revenue from just under $200 in ad spend ($199.07 to be exact) with the help of retargeting ads on Facebook:

facebook ads retargeting

That’s a return on ad spend of 1,529%, or nearly about $15 for every $1 spent in Facebook ads retargeting.

We spent money on Adwords to generate the initial traffic, but as I mentioned before, we managed to hit the break even point on first-visit sales fairly quickly.

That meant any extra revenue we could generate from the same website traffic using Facebook retargeting ads would boost Myfix Cycle’s profits.

Conclusion

The best part out of all this isn’t the numbers or statistics, but rather that you can put this strategy to work for your own business (this is by no means a unicorn campaign, we did it for this Shopify store too).

If you’re already doing things to generate traffic to your website like blogging, pay per click, SEO or organic social media posts, then you can really benefit from having this kind of retargeting strategy in place.

Think of it as a way to take your advertising dollars the extra mile, or a way to create the extra touchpoints needed to finally make a sale.

For Myfix, it was between 5 and 7 touchpoints. If you’re in the B2B space, it may be more.

Put simply, going for the home run right out of the gate will only get you so far.

Adding Facebook ads retargeting (or just retargeting in general) to your marketing mix is a simple, profitable way to scale your business.

Have any questions about Facebook retargeting or Facebook ads in general? Leave a comment below because I’d love to hear what you’re struggling with!

more traffic leads and sales are just around the corner

Ben heads up content marketing at Webrunner Media. He is a full-stack marketer, writer, entrepreneur, and hockey player. Connect with him on Twitter.

 

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