Increasing Overall Ads ROI by 40+% With a Funnel Strategy
Photo by Jud Mackrill on Unsplash
In April, I took over the Facebook ad account management for a new client of mine and was tasked to improve ad account performance.
The only campaign running at that time was a dynamic catalogue sales ad retargeting campaign, where product recommendations were automatically generated based on the user’s behavior - showing product(s) he/she has viewed or added to cart, for example.
Example of a Dynamic Product Ad
While I agree that such dynamic retargeting ad campaigns are highly effective in achieving purchases by nudging for a ‘completion of the sale’, having this as the sole ad campaign alone with no funnel strategy in place has little benefits.
Results before
Results of the sole campaign that just ended when I took over
With this campaign being the first and only in the account, I couldn’t exactly judge how well it fared as there were no in-account benchmarks to make comparisons to. However, one indication that performance could be improved was the ‘Frequency’ metric being 43.53 in the span of 30 days (an estimate of the average number of times that each person saw your ad). This meant that each person, on average, saw the dynamic ad at least once every day! At such a high level, it is very likely that ad fatigue has set in, thereby reducing the effectiveness of the ad.
The reason this happened is that the audience pool was very small - only users who have 1) visited the site, and then have also 2) viewed / added an item to cart would be eligible to be served the dynamic ads. Relative to the budget that was allocated to this campaign, the site traffic was too low to generate enough site visits for ‘product views’ or ‘cart additions’ to even happen in the first place. Thus the budget could only be spent repeatedly on the same, small group of audience.
What I did
To improve ad performance, a funnel strategy was needed. While a full-funnel strategy is possible, I opted for a partial-funnel strategy. By doing so, we would be able to reach out to new audiences which then meant being able to increase the audience pool for retargeting as there were now ads to drive additional site traffic.
The possible types of Facebook ad campaigns to run under ‘Awareness’, ‘Consideration’ and ‘Conversion’
These were the 3 campaigns I ran:
Consideration (Middle of the Funnel - MOFU): Traffic
Conversion (Bottom of the Funnel - BOFU): Conversions (Add to Cart)
Retargeting past site visitors
Conversion (Bottom of the Funnel - BOFU): Catalogue Sales
Retargeting users who’ve viewed / added items to cart, excluding those who’ve purchased.
Results after
These were the results from a 30-day period spanning between April & May:
(Purchase ROAS: Total purchases conversion value divided by Total amount spent)
And this is a side-by-side performance comparison of the previous and new catalogue sales campaign:
(‘Result’ in this case referring to Purchases)
It is important to note that I did not make major changes to the setup of the new catalogue sales campaign. This means that these two campaigns were almost identical, and yet how did they manage to garner such different results?
The difference was the adoption of a funnel strategy with the addition of the two other campaigns:
Traffic & Conversions.
Even when a comparison is made between the two 30-day periods, the overall account-level Purchase ROAS increased by 44% when a funnel strategy is adopted.
Caveat & Conclusion
Certainly this comparison isn’t statistically accurate, as the two approaches were carried out in succeeding time periods as opposed to being done simultaneously.
However, the rationale behind having a funnel strategy still stands: having MOFU or TOFU campaigns to ensure sufficient inflow of cold audiences for BOFU campaigns. Granted, BOFU campaigns are probably the ones which advertisers are most concerned about since they’re the revenue-generating ones, but for such campaigns to maximise their effectiveness, complementary MOFU or TOFU campaigns are highly essential. Even with more spending required for the addition of these campaigns, it is likely that overall speaking, advertisers will still enjoy a higher ROI on their ads.