How does facebook advertise to you


How Does Facebook Know What Ads to Show You? (Example)

By Megan Malone Digital Marketing, Facebook, Uncategorized digital marketing, Facebook, facebook categories, facebook targeting

The way Facebook determines what ads to show you is based a lot around the information you provide by your online activity. By using things such as your age, location, page likes, app use, and even data from the mobile websites you browse, Facebook profiles you into categories that advertisers can then use to target ads to you on Facebook.  If the ads you see on Facebook sometimes seem frighteningly specific to you, that’s because Facebook is constantly keeping track of your activity, determined not only by everything you do on Facebook, but also by your offline activity as well.

With a few key partnerships in place, Facebook also uses what you buy in real life stores to influence and track the ads you see.  Through combined data, they have an idea of what you like, where you shop, and what you buy. It sounds a bit crazy, but do not be alarmed!  This practice is actually much older than many people realize. Facebook combines the information from data collection companies like Epsilon, Datalogix, Acxiom, and BlueKai with information they have about you. Through things like store loyalty cards, mailing lists, public records information, and browser cookies, these companies already collect information about you. For example, if you buy a bunch of frozen pizza at a grocery store, and use your loyalty card to get a discount, that information is cataloged and saved by a company like Acxiom.

Basically it comes down to this:  your online and offline activity combined- determines what kind of ads you’ll see. Of course, a lot of complex math and algorithms are in place to actually produce this data, but much of it comes down to how much information you are making public—whether you’re aware of it or not—that makes the system work. In theory, it does this to make targeted ads more relevant and specific to you.

Facebook does break their targeting categories out into subcategories including Demographics, Interests and Behaviors.

Demographics are used to reach people based on things such as education, employment, household, financial, income, language and lifestyle.  To take a look at how specific the targeting can get, let’s look at education as an example. Demographics could answer questions such as:

Another great example could be moms. Demographics could target not only are they a mom, but what type? (Big-city moms, fit moms, corporate moms, green moms, moms of pre-school age children, moms of high school kids, new moms, soccer moms, stay-at-home moms, trendy moms, sports moms)

Interests reach specific audiences by their “interests” and this is where things can get really interesting, because you can type in just about any brand, place, or topic and target those users if the audience is large enough.

This category includes: apps they use, posts they share on their timelines, and pages they “Like.”

Not surprising, the Interests section includes the most targeting options. There are tons of categories, with even more subcategories. The category breakdown is as follows:

Behaviors are used to reach people based on purchase behaviors or intents, device usage and more. Typically this data is acquired by Facebook from third-party data collection companies. Like Interests, there are many, many Behaviors and even more subcategories to target. Some examples of Behavior targets and subcategories:

These are just a few examples, but you can see, Facebook uses many ways to target, all in the hopes of showing the consumer, relevant, useful ads, which is what makes it such a powerful advertising tool.

How Do Facebook Ads Actually Work? Here’s What You Need to Know

Let’s just get to the elephant in the room. Facebook ads are struggling.

Facebook is fighting a lawsuit against their reach metrics. And Facebook’s personalized ad campaign to combat Apple’s App Tracking Transparency (ATT) isn’t going well.

But the truth is that Facebook ads actually work.

With updates like exclusion controls, a new Conversions API that allows you to pull data directly from your server into Ads Manager, and transparency about the data Facebook is collecting, this social network doesn’t show any signs of slowing down.

Ahead, I’ll explain how and why Facebook ads work, different types of Facebook ads, and how to get started creating your first Facebook ad.

So, Do Facebook Ads

Really Work?

The short answer: Yes. Facebook ads do really work.

Want proof?

In 30 days, this app generated 7,044 installs after spending $9,821 on Facebook ads.

BionicGym generated 9x ROI from their Facebook ads.

This company spent $300,774.82 to earn $3.64 million in revenue from Facebook ads.

But, there’s a caveat in that Facebook ads work when your business is the right fit for Facebook ads. Depending on your industry, you want to consider if Facebook aligns with your business model.

Facebook ads are not always the answer for more traffic, clients, or sales. If you’re a business with a low cost of entry like an ecommerce pushing products or a SaaS that’s driving sign-ups, it can be difficult to find success.

If you’re unsure, start small. Stick to a cheap $5-$10 per day ad spend for 1-2 weeks to test.

A Quick Background of Facebook’s Ad Algorithm

Originally, when Facebook launched its ad algorithm, it was based on an auction. It gave priority to the highest bid.

However, in 2018, Mark Zuckerberg announced that Facebook would be shifting to prioritize “meaningful interactions.”

Facebook shifted more toward the user experience model while integrating the auction.

The auction is based on:

However, it is still unclear exactly how Facebook’s ad algorithm works.

Eric Sodomka, a research scientist at Facebook that focuses on auctions, shared his first-party insights on how Facebook’s ad algorithm works.

You’ll want to watch this:

Within that presentation, Eric shares how Facebook evaluates content.

On the left, you’ll see the probability that this specific user will click any ad.

On the right side, you’ll see the probability that a specific user will click this ad.

Facebook uses this predictive data to decide the likelihood that someone will take an action. With Facebook’s flexible analytics architecture, they do test various models outside of this.

If you want to get into the nitty-gritty of it, you’ll want to dive into this research paper, Practical Lessons from Predicting Clicks on Ads at Facebook by Joaquin Quinonero Candela, the Director of Applied Machine Learning at Facebook Research.

6 Types of Facebook Ads

There are six types of Facebook ad formats.

Image

File type: JPG or PNG
Resolution: 1080 x 1080 pixels
File size: 30MD

Facebook image ads allow users to create visuals with static images to drive action.

Here are my secrets to optimizing your Facebook image ads:

  1. Show examples of customers using your product.
  2. Try to avoid text. Remember, less is more.
  3. Stick to a consistent theme if you’re running multiple ads.
  4. Always use high-resolution images.

Video

File type: MP4, MOV, or GIF
Resolution: 1080 x 1080 pixels
File size: 4GB
Video duration: 1 second to 241 minutes

Facebook video ads give businesses a chance to showcase their brand in sound and motion. These can be seen in the stream, feed, or stories. You also have the option to create a slideshow.

Here are my secrets to optimizing your Facebook video ads:

Carousel

File type: JPG or PNG
Video file type: MP4, MOV, or GIF
Resolution: 1080 x 1080 pixels
Number of cards: 2-10
Image file size: 30MB
Video file size: 4GB

Facebook carousel ads allow you to display up to 10 images or a video in a single ad. Each image receives its own link.

Here are my secrets to optimizing your Facebook carousel ads:

Instant Experience

Image type: JPG or PNG
Video file type: MP4 or MOV
Size: 1080 pixels x 1920 pixels
Images supported: Up to 20 images

Instant Experience Facebook ads pair with collection ads. Users can watch videos, swipe through carousels, and shop for products in your catalog.

Here are my secrets to optimizing your Facebook collection ads:

Collection

Image type: JPG or PNG
Video file type: MP4, MOV, or GIF
Resolution: 1080 x 1080 pixels
Image file size: 30MB
Video file size: 4GB

Facebook collection ads are paired with Instant Experience ads. The collection ad serves a cover photo or video and four product photos. When a user clicks on a photo, a landing page pops up to drive that Instant Experience feature.

Here are my secrets to optimizing your Facebook collection ads:

Bonus tip: If you’re unsure how to choose the right Facebook ad objective for your goals, check out Amy Bishop’s article.

Here’s How to Create an Ad on Facebook With Step-by-step Instructions

First things first, before you can create an ad on Facebook, you’ll want to create a Facebook Ads Manager account (if you have a business page).

If you’re not sure if you have an account, try to log into Facebook Ads Manager.

Step 1: Choose a Campaign Objective

Facebook gives you options to select from the following goals.

For the purposes of this article, I selected traffic as my goal.

Step 2: Name Your Campaign

After you select your campaign objective, you want to name your campaign along with the ad set and ad.

Step 3: Complete Campaign Details

After you name your campaign, Facebook will give you more campaign details to complete.

Here’s a quick breakdown of each:

Special Ad Categories

If your ad relates to credit, employment, house, social issues, elections, or politics, you must select this option. Due to the restraints of certain countries, there are different steps Facebook must follow to be legally compliant.

Campaign Spending Limit 

Similar to budget optimization, the campaign spending limit stops delivering your ad once that limit is reached. Facebook will send you a notification to let you know the limit has been reached so you’ll have the option to keep it running if you’d like.

A/B Tests

Facebook allows ad managers to test creatives, audience, and placement to uncover the best-performing campaign. If you select this option, Facebook will automatically make this the A of the A/B test.

Campaign Budget Optimization

This allows you to set a budget at a campaign level. In the past, Facebook only allowed users to set this at an ad set level so it caused a lot of complications when allocating budgets to different audiences.

I’d recommend using this if you’re starting a campaign in a learning phase, or easing your campaign management, or if you’re targeting to get more conversions or a lower cost-per-ad. If you’re targeting a super niche audience, you may want to avoid this.

Step 4: Choose Budget, Schedule, Audience, and Delivery

This is my favorite step in creating Facebook ads. It’s where the research and the data begin to come together.

First, you can choose where you want to drive traffic.

Then, you can toggle dynamic creative on if you want Facebook to automatically generate variations depending on the audience most likely to engage.

You’ll want to pair this with automatic placements that I’ll cover below.

These are my new favorite ad sets from Facebook. Wordstream saw 60% more conversions after using dynamic creative ads in just 30 days.

You can also use this to rotate in an offer style ad feature. This allows you to send automatic reminders, discount codes, and more.

Swish used this to promote a 50% off discount at 7-Eleven stores and saw an increase of 66% of offline sales.

Next, you can choose your budget and schedule.

Followed by audience creation.

Until you get down to the placements, optimization, and delivery at the bottom.

One element you’ll want to remember to check is how you get charged for these Facebook ads.

Facebook is tricky and hides this all the way at the bottom.

Step 5: Choose Ad Format

You’re on the final stretch! On the last page of the Facebook ad set-up, you have the option to select the format you’d like to structure your ad for users.

This is where your ad type knowledge from above comes in handy.

Step 6: Upload Creatives

Now, you can upload your media and add ad copy and a landing page URL.

Step 7: Select Languages

If you’re a global company or a local company targeting other dialects, you will want to add your own transcripts to your ads.

Step 8: Set Up Tracking and URL Parameters

This last step is the most important step. You want to always track your data and select a URL parameter to understand how your ads are converting and what’s motivating users to click.

Facebook Advertising Is Just Getting Started

Due to the growing lawsuits aimed at Facebook ads and Apple’s stance on security, Facebook is going to look for more ways to generate revenue.

Keep your eyes peeled for Facebook Group ads. Facebook has been silently testing these since late 2019. And, their $10 million Super Bowl ad was dedicated to Facebook Groups.

I smell a new ad type baking in the oven.

With a bigger drive for user experience and more lawsuits, Facebook is going to drop core targeting options slowly. But with this comes more ad options and a greater drive to video.

Until we have more information from Facebook, businesses should continue to work to understand their customers and how best to engage them.


Featured image credit: Paulo Bobita

Category Digital Advertising Facebook

Setting up Facebook Ads: A Step-by-Step Guide

Contents

Bid strategy

One of the important steps in setting up an advertising campaign is choosing a bid strategy.

In order for the right audience to see your ad, you must win an auction with other advertisers. In the Facebook auction, the ad with the highest "total value" wins. The total value is not the amount you are willing to pay to display your ads. When determining this indicator, 3 factors are taken into account:

Rate is how much you are willing to spend. It controls the cost per result in case the auction wins and the impression is completed.

There are 2 bid strategies: Low Price and Target Price. Read more about them in our article How to Choose a Facebook Bid Strategy.

Delivery type

This parameter determines how fast your ad will be shown. You can use standard mode or set up accelerated impressions to get results faster. In the second case, your bid will be raised in order to get a higher place in the auction and get more impressions. nine0003

Ad level

Let's start creating an ad creative.

First you need to choose from which page the advertisement will be shown. If you have specified Instagram as one of the placements, you must also specify the desired account here.

Ad Format

Facebook offers several ad formats to choose from. Choose the appropriate format depending on the purpose of promotion and content.

Upload your own photos or use stock. On the right, you can find the image parameters recommended by the social network for the best selection of pictures. You can create up to 6 ads at the same time. You can find all the recommendations from Facebook on creating creatives in the "Creative Center" section.

All ad settings occur on the left side of the page. On the right is a preview of your creative in different placements.

Next, you fill in the required fields: title, text, link to the site, call to action, etc.

When the ad is ready, click the "Confirm" button and your advertising campaign will be sent for moderation.

It is important to remember that the effectiveness of an advertising campaign is determined by the communication in your creatives - the settings only correlate the cost per result. The target audience makes decisions according to what they see in the advertisement.

Working with Acquisition and Retention campaigns

We have analyzed the creation and setup of an advertising campaign from A to Z. But how to apply this knowledge correctly and get effective results?

If you have a website or mobile app, before launching an acquisition campaign, start by setting up a retargeting campaign.

For this you need:

  1. Install Facebook Pixel or Facebook SDK.
  2. Create a funnel for retargeting.
  3. Set up the necessary events for the approved funnel. nine0006
  4. Create saved audiences to distribute them to ad groups in campaigns.
  5. Create an advertising campaign with the advertising objective you need.

Why start with retargeting? While you are setting up an advertising campaign for a cold audience, you will be able to start communicating with existing traffic.

Retention (retargeting campaigns) is a system promotion. And its task is to reach all relevant users/visitors and lead them to the final goal. At the same time, each stage of the funnel needs to be improved by increasing the Conversion Rate. In the case of acquisition campaigns, it is important to test in order to find the most profitable cost for achieving the goal. nine0003

What is the target for a retargeting campaign?

If you are sure that your audience is of high quality, then the percentage of the target audience tends to 100. In this case, you do not need to worry about the type of delivery and optimization of the advertising campaign. In this case, the goal is to reach everyone. Choose the Reach objective to reach everyone in your sample and get a lower CPM.

If someone has already worked with the sample before you and you are not sure about its quality, then stop at the “Traffic” goal and optimize for clicks to reach only those who are more likely to want to receive your offer. nine0003

If the audience is of poor quality, then select the "Conversions" goal and optimize for conversions. You will lose volume, but at the same time you will not spend money on inappropriate impressions.

To be sure that you have chosen the right goal, we recommend testing and analyzing the results. The selection of an advertising goal for retargeting is the search for the ratio of the optimal price per result to the number of results received.

If you're getting sales for, say, $10 per unit for the "Conversions" ad objective, but your KPI is $15, try switching to the "Traffic" ad objective. The cost per result will likely fall while still being within the KPIs, but sales volumes may rise as more people see your ad. nine0003

If you don't plan on active promotion, it's definitely worth launching retargeting campaigns. This will help you reach the entire loyal audience and lead the funnel to the result for a penny. Most of the spending is always on acquisition campaigns. If you don't have enough budget, run only retargeting campaigns.

How to work with acquisition campaigns?

Planning and implementing acquisition advertising campaigns is completely different from retention campaigns. nine0003

The first stage is testing. Persons are created, a number of messages for each of them, a list of target groups, and saved audiences (targeting combinations) are loaded. Additionally, saved audiences are created based on data, and not only on portraits of the target audience (lookalike audiences from the base, lookalike audiences from events, etc.).

When testing is in progress, you need to move on to stabilizing the results and optimizing them. How to do this, we described in detail in the guide “Optimizing and scaling Facebook advertising campaigns”. nine0003

Conclusion

With the help of this article you will be able to create and set up an advertising campaign without any experience with Facebook Ads Manager. In the process of improving your skills, you will understand how you can manage the settings to get more effective results from communication with the audience.

Important points we would like to recap: