Profitable Facebook ads for eCommerce companies in 2021(Step-by-Step guide)

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Profitable Facebook ads for eCommerce companies in 2021(Step-by-Step guide)


Profitable Facebook ads strategies for eCommerce in 2021. If you are running an eCommerce store then Facebook ads can really help you grow your business and bring profits. However, many eCommerce retailers are confused about how they can leverage Facebook ads in growing their business and reach more potential customers. This article will help you understand how you can run Facebook Ads profitably for your eCommerce business.

Installing Facebook Pixels

Before we can discuss about what Facebook ads you should run for eCommerce business, you must install Facebook pixels on your website so we can track events like add to cart, purchases, view content, build our customer list etc. you can this article on how to install Facebook pixels on your website.

What audiences are the best to target?

Before we get started with our campaigns, we need to know what audiences we should target for achieving desired results. Currently, Facebook offers four types of audiences to advertisers such as custom, lookalike, saved and special ad audiences as shown in diagram below.



I. Custom audience
Custom audience is a powerful tool to connect with people who already have visited your website, liked your Facebook page, subscribe to the newsletter, previous customers etc. Custom audience allows advertisers to retarget people who have had some interaction with their brand, products, and services so they could be converted. This helps in increasing the conversion rate and ROAS .

ii. Lookalike audience
Lookalike audience enables marketers to connect with people who are very similar to their current existing customers or buyer personas. For example, you can upload a list of your current or previous customers and tell Facebook that you want more people like these. This a great way to reach new audience (cold audience) who do not know about your brand .

iii. Saved audience
Saved audience is built using standard Facebook data like interest targeting, demographics etc. This type of audience is very effective in building large audience of people who might be interested in your brand .

iv. Special ad audience
This audience is available only in special ad category such as credit, housing, politics, employment etc. Through this tool you can reach new people who have similar attributes to your current customers .

Sales Funnel for Facebook ads
In a nutshell, Facebook ad sales funnel is a representation of different steps that buyers will take when they buy from you through Facebook ads. Sales funnel is extremely important in Facebook ads to fully understand a customer journey so that we can improve our conversion rate, ROAS and brand awareness etc. An example of sales funnel is shown below.

Profitable Facebook ads strategies for eCommerce in 2021

Different levels of sales funnel
Facebook ad sales funnel has three following important levels.

I. Top of funnel
This level consists of people who have not interacted with your brand or do not know about your products and services. They are known as cold audiences because its hard to convert them as
paying clients.

II. Middle of funnel
People who have had some interaction with your brand, they might have seen your Facebook ad and familiar with your products and services but have not yet converted into paying clients. This type of audience known as warm audience.

III. Bottom of Funnel
People who have shown interest in buying your products or services i.e., added to cart but did not complete checkout or even previous customers. They are also referred as hot audience as they are 70% more likely to purchase than people at the top of funnel.

So, What Facebook campaigns you should run at different levels of sales funnel ?


Top of funnel ads for eCommerce companies: 

What Campaigns? At this level, eCommerce companies need to reach a wide pool of potential customers and they should use awareness and reach campaigns at this level. Moreover, they can also test traffic campaigns to drive more traffic to specific product pages so they can retarget landing page/ website visitors.
Why? Awareness campaigns are excellent way of introducing your brand to the cold audience (people not aware of your brand). These campaigns are lower in cost but very effective in creating large customer base . In awareness campaigns,  companies should say hello, introduce their brand and generate some interest with strong call-to-action CTA like ‘Learn More’ so targeted audience would want to know more about the brand.
The idea here is to get more people visit your website so they can get familiar with your brand and we can retarget them. Mostly companies get this wrong at the beginning as they start selling directly to cold audience without first warming them up, which in most of the cases proved to be

What strategies/audiences they should use?

 Lookalike: Lookalike (LAL) audience is one of the most effective top of funnel Facebook ad strategies that can help eCommerce businesses  turn their cold audience into potential clients. For example, they can create a custom audience of website visitors, page followers or upload a list of their customers and tell Facebook to find similar people

 Interest & demographics targeting: Apart from lookalike audience, eCommerce companies can use interest and demographics targeting options to get more potential customers. For example, they can target people interested in sports, sports equipment, sportswear, running shoes etc.

Audience insight: Audience insight is a great tool on Facebook to find suitable audience for your brand. You can make use of this tool to find ideal customers for your business.

What ad types are better in eCommerce?

Video Ads: Video ads are very effective in almost all Facebook ad campaigns, HubSpot tested video ad against image ad, and they found out that video received 20% more clicks than image. Companies should produce compelling videos telling their story to the potential customers or use videos of people using their products etc. The idea is to get more people watch your video so we can retarget them for consideration campaigns.

Carousel ads: Like dynamic product ads (DPAs), they are multi-image ads and work well for cold audience as they provide advertisers full control over the content so they can get creative to capture people’s attention as they scroll through their news feed. You can upload up to 10 images
in a carousel ad and customize as per the requirements.


Middle of Funnel Ads for eCommerce businesses

Middle of funnel means people who have had some interaction with your brand i.e., visited your website, seen video, engaged on Facebook page etc.
What campaigns? Now that we have people familiar with our brand but not yet converted, we need to use conversion campaigns to target warm audiences.
Why? Since we have interested people who visited our website, seen video, or engaged on our Facebook or Instagram page. We need to target them and tell a convincing story about why they should care about our products. According to eMarketer, retargeted audiences are 70% more likely toc convert, which helps in achieving better ROAS.

What audiences/ strategies they should use?
Custom audiences: To retarget warm audience, we need to use custom audience option, Facebook offers variety of custom audiences to choose from like website visitors, customer list, video views etc. as shown in the diagram below.


What Ads to use in middle of funnel ?

For retargeting, video and carousel ads are the best choice. As discussed above, video ads are more likely to receive more clicks than a normal single image ad. Moreover, at this level we can also use small videos less than 30s long showing different  products. Many companies use testimonials videos of their existing customers to attract new clients.

Bottom of Funnel Ads for eCommerce

People at the bottom of funnel are those who purchased previously, abandoned cart, viewed product pages. This type of audience is known as hot audience and they are more likely to purchase than anybody else and they will have the best ROAS.

What Campaigns? Conversions, Catalog sales, Retargeting
Types of ads? Dynamic product ads (DPAs), Video, and collection ads

Dynamic product Ads (DPAs)

Dynamic product ads are the most profitable for eCommerce companies as they offer high ROAS. They provide advertisers a chance to bring back reluctant customers to purchase by showing them personalized ads based on their activity on their websites. For example, if a person visits some products pages on then thru DPAs, Namshi will show them same ads on their Facebook news feed.

To get started with DPAs, we need to follow steps below

  •  Upload product catalog to Facebook business manager manually or import items using their partner platforms like Shopify, BigCommerce etc.

  • Setup event tracking in Facebook Events Manager to track events like add to cart, view content, purchase etc. to analyze customers’ buying behavior.
  •  Create dynamic template, Facebook will automatically populate the template using information like product name, price, and image you uploaded in catalog as shown below.

Collection Ads

Collection ads offer seamless browsing experience as they are more engaging and fast loading than normal ads. Basically, they are a combination of both image and video ads offering unique experience to your audience. The format consists of one cover image or video along with other
images as shown below.


General retargeting campaigns with offers

According to a survey, 72% of online shoppers abandon their cart without completing a purchase and without any retargeting, only 8% will come back and buy. Therefore, its extremely important to retarget hesitant buyers and the best way to do that by giving some offers like 10% off, which greatly increase the conversion rate and sales.

Finding new customers thru lookalike audience

This strategy is very powerful in finding new customers. Sun and sand sports already has a massive customer base, and they can find new customers by using lookalike audience based on their existing customers. They just need to upload their customer list in Facebook and ask Facebook to match it with people who have same profiles as their customers. They can choose a percentage of the population they want to match, 1% being the closet to your audiences.



In conclusion, Facebook and Google advertising are extremely important for eCommerce companies as they provide retailers more visibility and  reach. We discussed how online retailers can harness the power of paid social media campaigns especially Facebook ads to increase their sales/revenue. We talked about building sales funnel and how to target audience at different levels of funnel using video, carousal and single image ads.

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