E-commerce highly depends on social media marketing to generate revenues. What more important medium to use for marketing purposes then Facebook? If you are a Shopify entrepreneur, it’s important to understand in detail how exactly facebook ads work and what you can do to increase the success of your campaigns.

You’ll gain the following knowledge by continue reading:

  1. How does Facebook ads algorithm work?
  2. A strategy that will get you higher profits & reach from your FB ads 
  3. Additional tips on improving your ROI from FB ads 

How does Facebook ads algorithm work?

Facebook’s main asset is its users. No longer the highest bidder gets the highest returns from FB ads. It used to be the case, but not anymore. FB learned that it should add two other components in addition to the bid in order to avoid bad experiences for its users. Being smart, FB got better at getting $5 each year for many years, than $10 instantly without anything following up. Before I share how the ads algorithm works you must know one more very important thing. FB users are using the social network for anything but to click on ads and your ad will have to compete not only with other brands similar to yours, but also to anyone who is advertising on the platform. This makes your job even tougher, but it’s good for FB users because they will see only the best ads in their feed and it won’t feel like so much spam. 

So how exactly does the ranking algorithm work? 

Facebook ranks ads based on “Total Value” for each ad.

The graphic above illustrates it best. Let’s explain it in detail:

    1. Advertiser Bid -> that’s the budget you have Facebook ads bidding
  1. Estimated action rate – it’s FB’s guess how well your ad will achieve your objective. Let’s see how the “Einstein Marketer” explains it: “The ‘action’ mentioned in this crucial three word factor, depends on your campaign objective. If you were running a conversions campaign, it would be Facebook’s estimation at how well your ad will convert. The same goes for engagement, traffic , lead gen… …but Facebook’s estimate isn’t based on blind guesses.They track how well your ads are performing and adjust your Estimated Action Rate as they continue to run, as well as looking at your ad set, the quality of your campaign and your account history.There’s a lot to be learnt from the Estimated Action Rate and a lot you can do to increase Facebook’s estimate.” For more info go to this link
  2. User Value -> measures how the users react after they click on your ad. Of course facebook can’t measure emotions, but they can track the time users spend on your landing page and if users bounce right away, this can tank your FB ads campaign. 

There’s one amazing video describing “Total Value” with examples by Sebastian Ghiorghiu Link

A strategy that will get you higher profit & reach from your FB ads

Now that we know how FB ads algorithm works, let’s check a strategy that can really increase your ads profit. 

Facebook says – “Conversions. At a minimum, your ad set needs to be getting 15-25 of the conversions it’s optimized for per week to have a chance at success. Note: 15-25 is only a bare minimum. 50-100+ is ideal.” To understand even better what conversions mean read this reddit post

The strategy is used by a guy called Rory Ganon who became a famous Shopify entrepreneur with his challenge to reach $1000 revenue per day in just 7 days. Watch it here

Let’s start. It’s a 3 phase strategy:

  1. First phase is the Data Collection Phase

Facebook ads data collection phase

We start by creating a “page post engagement ad” or PPE. Spend $10-$15 on it for a couple of days but not more than a week. Then you’ll ask the question, does this ad have less than $1 clicks. If not, you kill the ad. If yes, you’ll convert the ad to view content and we go to phase 2. 

  1. Phase 2 – Sales

Sales stage in Facebook ads

In this phase we’re going to take the “view content ad” to “add to cart ad”. Here we will wait  for the “view content add” to get more than 25 link clicks. Once it’s ready you convert the ad to “add to cart ad” and thus telling Facebook you’re optimizing for sales. Let’s go to phase 3

  1. Phase 3 – Scaling 

Scaling stage with Facebook ads

Here we have the same tactic as in Phase 2. We’re waiting for the “add to cart ad” to get more than 25 link clicks in order to convert it to an “ad for website purchases”. When you optimize for website purchases, you’re telling FB that you want the ad to be shown only to people most likely to purchase from your store. Finally, at this phase, you can start analyzing the data and scale your add to hundreds or thousands of dollars per day. 

Did you understand why Rory is waiting to get at least 26 clicks? Yes, because FB is data driven and as you read above, by having the clicks you’re increasing your chances to succeed. Here’s a link to the Video on this strategy. 

Additional tips on improving your FB ads ROI

As you can see, the likeability of your add is super important. You need to get clicks and engagement but also you need to have a great landing page to boost the total value of your ad and thus even minimize your bid. So what a better strategy than using engaging images like animated images in the form of GIFs or MP4 format.

  • “80%+ increase in engagement for FB ads & 110% increase in engagement for Twitter ads when Gifs are used”  Laurence Liddy Link
  • “100% increase in both conversation rate & revenue for an email marketing campaign when GIF is used”  Dell Case Study Link
  • “A study of 3.7 million accounts showed that Tweets with a GIF gained 55% more engagement than those without” Тwitter Internal Data Link
  • “Millenials say Gifs communicate their thoughts better than English” TIME Magazine Link 

Additionally, animated images will increase time on page, decrease bounce rate, and boost social media engagement.


Want to become a successful Shopify entrepreneur? PicAmaze can help you in your FB ads campaign by creating your animated images like the ones above.  Drop us a line and download the PicAmaze app from the Shopify store.