The Facebook Ad Dictionary | A Beginner’s Guide to Understanding Facebook Ads

 A Beginner's Guide to Understanding Facebook Ads

I am an advocate of the use of Facebook ads especially for small & medium businesses.

If you haven’t read why I think this, you can check it out here.

However, to make Facebook work well for you and your business, you have to be able to understand the ins and outs of the Facebook ad platform.

So this is why we have this post. This is to help first-timers navigate through Facebook Ads Manager.

In this post, we’ll list down important terms which you’ll find yourself using frequently.

But before that, it is important to discuss…

 

How does Facebook Advertising work?

It’s not complicated really.

The main concept is that Facebook shows you ads which it thinks will be relevant for you.

Facebook creates a profile of its users based on their behavior. Some points of information they use to determine what you might be interested might be:

  • The Facebook Pages you like
  • The types of post you interact with
  • The actions you take on certain website like subscribing and purchasing

You can actually check what Facebook thinks you’re interested in. Here’s mine:

My ad preferences

 

It seems right since these are my interests. But…

I have actually no interest in Indiegogo nor have I used it. I don’t recall interacting with anything with regards to crowdfunding so I don’t know why it’s there.

Having said that, note that Facebook is not perfect. It can, at times, assume wrong things about you. This is why sometimes, you see ads on your feed which are of no relevance to you.

When you see an ad which you wonder why it’s showing up in your news feed, you can click on the arrow on the upper right of the ad. From there, select ‘Why am I seeing this?’ to find out why.

Why am I seeing this?

So what does this mean for businesses like yours?

This means that you can set your ads to show only to those people who are most like your customers. That’s a huge advantage especially compared to traditional advertising!

This ensures that your ads will appear to the specific people you want it to appear to.

Another important concept to understand is bidding but we’ll break that down in another post.

Now that you have a better idea on how Facebook Advertising works, let’s get you prepared to start by breaking down the terms you’ll be encountering.

Facebook Ad Dictionary

Campaign – The highest level of the ad campaign structure where advertisers choose objectives.

Ad Set – Levels in the ad campaign structure where you set your budget and define your audience.

Ad – The posts you show to your audience.

Engagement – Any interaction with your post (likes, reactions, comments, shares, etc)

Clicks (All) – Any click that was made on your ad. These include:

  • Engagement
  • Clicking on videos to play audio
  • Clicking “See More” for long posts
  • Clicking the link you provide

Clicks (Link) – Only the clicks which lead the users to a website you set.

Reach – The number of users who have seen your ads

Impressions – The number of time your ad was shown

Frequency – the number of time a user has seen your ad. Can be computed by dividing impressions by reach.

CTR – Short for Clickthrough rate. It’s computed by dividing the number of clicks by the number of impressions and multiplying it by 100%. This metric is a gauge on how well your ads have been resonating with your audience.

CPC – Short for cost per click and is a metric to help you determine how much you’re spending for each person who clicked on your ad. It is computed by dividing the total amount you spent by the number of clicks your ad got.

Conversions – this is the general term for the actions you want users to take. It can be in the form of purchases, sign ups, lead, registrations, etc.

Other Important Terms

There are terms which you won’t really see in Facebook Ads Manager but you may be encountering especially when you read more about Facebook Ads.

Here are some of them:

Return on Ad Spend (ROAS) – This is probably the most important metric to check to see whether advertising on Facebook is effective for your business.

ROAS tells you how much profit you receive as compared to the cost of advertising.

To get this, compute for the profits you earned directly from your Facebook Ads. Then divide it by the total amount you spent on advertising. Express the answer in percentage and you have your ROAS.

If you’re ROAS is below 0%, then something’s not working. It means that you’re spending more than you are earning.

 

CPA – Short for Cost per Acquisition or Cost per action.

This refers to how much each of your chosen conversions cost.

Like ROAS, it helps you determine whether or not your advertising efforts are effective or not.

To compute for CPA, simply divide total ad spend by the number of conversions you have.

As long as your CPA is lower than the cost of your product, then you’re doing great.

 

Funnel – This is the model followed by a lot of businesses whether they know it or not.

To illustrate, take for example a hotel who targets Families of 4 in Metro Manila. These people fall into the group of prospects of the hotel.

The hotel then reaches out to their prospects through promotion and some people call the hotel to express interest in staying with them. These interested people become leads.

The sales team then follows up with these leads and get them to book a weekend at the hotel. They have now converted (hence, the term ‘conversions’) from a lead to a customer.

But usually, it doesn’t stop there. During the stay, the hotel staff tries to ensure that the guest has a great stay so that they will, later on, convert from being just a customer to a repeat customer.

This process is called a funnel because of how it is shaped as illustrated below:

Funnel

Even More Terms

There are other more terms and concepts to be understood in this field but I don’t want to give you information overload in this one post.

And besides, some of these need their own post for you to understand them.

So in the meantime, I’ll just list them down here and link them to their posts.

  • Pixels
  • Retargeting
  • Custom Audiences
  • Lookalike Audiences

Have any other terms you’ve seen that you don’t understand? Let me know and I’ll try to help!

The Anatomy of A Facebook Campaign | How to Set Up Facebook Ads

How to Set Up Facebook Ads

 

When I first started out with Facebook Advertising, one thing I struggled with was the seemingly tedious structure in Ads Manager.

Having multiple ‘tiers’ or levels in Ads Manager confused me a lot when all I wanted was to simply get an image out there to a specific audience.

If you’re experiencing the same troubles, this post is for you!

We will break down the 3 levels of an ad campaign as well as briefly explain all the elements in them so you know how to structure your campaigns and you know exactly what to put in them.

Why is structuring important?

Structuring is important because this will allow you to organize your campaigns so that you can easily navigate through your account especially when you need to make a change or adjustment.

The campaign structure has 3 levels: Campaign, Ad Sets and Ads

Campaigns are where you create your different offers.

You can create different campaigns for different objectives. For example, you can create a campaign to get people to buy from your website, another campaign to get people to view a certain video, a third campaign to get more page likes, and so on.

Other businesses also create different campaigns based on the different promos they run.

Within a campaign are the ad sets.

Ad sets are created based on the people you are targeting. For example, If you are selling clothes online, you can create separate ad sets for each gender and each age group.

Then, within each ad sets are the ads themselves.

These are the ads which you will show to the audience targeted by the ad sets they are housed in.

So basically you can create multiple ads for each ad set if you want to have varying ad images or text.

So let’s go into each one and discuss the fields you need to put in so you have a better idea on how to create your campaigns

Campaign

This is where you will tell Facebook what you expect to happen with the campaign you are creating by selecting a specific objective.

This is important because once you create a campaign, you can no longer change the objective you choose. Note also that the way these campaigns will be reported on Ads Manager will depend on the objective you choose.

Facebook Campaign Objectives

Campaign creation is where you indicate your objective

Ad Set

In creating an ad set, there are many types of information which will be asked of you and here are the most important ones:

Budget – This is where you tell Facebook how much you want it to spend for this ad set.

You are also allowed to choose whether you want Facebook to work with a daily budget which refreshes everyday or a lifetime budget wherein you get to choose a schedule for the period on when your ads will show. The latter is a good idea for time-bound promotions.

Ad Set Budget

Targeting – This is the fun part! This is where you get to create your audience by choosing information you want to target.

The targeting has 4 different parts:

  • First is Audiences where you get to to choose or exclude between different pre-created Audiences you may have.
  • Second is Demographics where you get to target by age, gender, location and language.

Ad Set Demographic Targeting

  • Third is Detailed Targeting where you can target by interest, Job Titles, Employers, etc.
  • Fourth is Connections where you can target or exclude users who are connected to your page (users who like your friends), their friends, and users of your apps among others.

Ad Set Interest Targeting

Optimization – Optimization is where you tell Facebook who among your audience it will show your ads to.

You can tell Facebook to prioritize getting website clicks, show your ads to as much people as possible or to look for specific people more likely to take the action you want them to take (ex. Purchase, sign up, etc).

Bidding – Depending on what optimization you choose, you can also tell Facebook how you want to be charged whether by pay per click or pay per impression.

You also have the option to bid automatically (Facebook will be the one to spend your budget) or manually where you will dictate how much you want to pay for a specific action, click or impression, which ever you prefer.

Ad

Like the ad sets, the ads creation could also be divided into different parts.

The actual information you will provide for the ad will vary depending on the objective you chose for the campaign but most of the time, the ads consist of the following:

Facebook Page – This is where you choose the Facebook Page from where you want your ads to come from.

Choose Existing Post – Getting this options means that instead of creating a completely new ad, you will just be using a post you have previously made and use it as an ad.

Take note that when you choose an existing post as an ad, also the likes, comments and shares will be shown in the ad.

Ad Creative – This is where you choose the image or video you want to use in your Ad.

Ad Creative

Text – This is where you put the text which you want to appear on top of the image or video.

Headline – This is where you put in an engaging and inviting headline found below the ad image or video.

Description – This is where you include additional text for your ad and is located below the headline. Take note that for mobile ads, this is usually not seen.

Display URL – This is where you put in a custom link you want to show and is especially useful when the URL of the landing page of the ad is long and ugly.

Ad Text

CTA button – CTA stands for call-to-action. This allows you to include a button inviting users to take the specific actions you want such as “Shop Now” and “Learn More”

Tagging – Tagging is the are where you put in UTM Tracking if you are looking into adding this in your links.

UTM tracking is a way for us to monitor where website visitors are coming from. We’ll prepare a post for more information on this.

I hope this guide has helped you navigate through your ad account. If you’re still confused, don’t worry!

Experience is the best teacher so just go into your ad account and start playing around and soon, you’ll get the hang of it.

6 Reasons Why Facebook Ads Should be Considered by Small Business Owners

6 Reasons Why Facebook Ads Should be Considered by Small Business Owners

Have you tried Facebook advertising?

Advertising in general tends to be an issue especially with small to medium businesses because of the costs involved. Most of the marketing efforts for these are word-of-mouth as it should. It’s free and is the most reliable.

Another free tool for marketing your products and services would be through Social Media.

Businesses create their own Facebook Fan Pages and Instagram accounts for users to follow and hopefully, purchase.

So with these free marketing tactics, why would your business need to advertise on Facebook?

The answer to that basically depends on your goals.

If you’re generating enough leads and sales and you can’t handle additional demand, then you probably don’t need it.

This post is for entrepreneurs, business owners and marketers who need a boost in getting leads and sales. It is also those who seek to expand their current reach by finding new customers.

In this post, I will list down the main reasons why Facebook ads a great investment for business. This is especially for the ones who can only allot a small budget for marketing.

I won’t get into specifics much like answering “how” questions so as not to overwhelm you with too much information. I will, however, break them down in other blog posts for you later on.

So…

Why should you be advertising on Facebook?

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1) Everyone is on Facebook!

Well, not everyone.

I still do know a number of people who don’t have Facebook accounts but most probably, your customers are hanging out at Facebook and this is a great place for you to get in touch with them.

According to Facebook, 50 Million active users in the Philippines are on this social platform!

50M Active Facebook Users in the Philippines

 

Surely your customers are among those people!

But at this point, you might be thinking, “that’s a lot of people! I don’t plan on advertising to all of them!”

The good news is that you don’t have to!

 

2) You can choose to advertise to only a few people

Facebook customizes what you see on your news feed based on your interests and your previous behavior.

It tries to identify what posts you will like and enjoy and it delivers those posts to your own personal news feed. Facebook does this so that we, the users, keep on coming back to Facebook.

The same thing with Facebook advertising. You can use Facebook’s data to help you advertise only to certain people who fit descriptions you input.

I have a whole post dedicated to how you can target this. But to give you an example, you can use Facebook Advertising to show your ads to specific groups of people. For example:

  •      Males between 20-30 years old who are car enthusiasts
  •      Engaged couples who are looking for wedding suppliers
  •      People in your city, barangay or even just in your own village
  •      NBA Fans who like to drink
  •      Purchasing Managers from different companies in Manila

Basically, Facebook advertising allows you to get your message directly in front of the people who you want to reach.

Facebook Targeting Options

 

RELATED: Finding Your Customers on Facebook | 5 Ways to Find Your Target Market on Facebook

 

3) You control how much you spend

This gets a bit technical but the most important takeaway here is that before you proceed with running Facebook Ads, Facebook will give you the opportunity to set a limit.

It has a minimum daily budget requirement which varies but basically, you can advertise on Facebook for as low as P50 per day.

Kung baga, sa halip na mag Starbucks ka, bili ka na lang sa McCafe tapos ipang-Facebook Ads mo yung matitira.

Later on in a different post, I’ll explain further how Facebook charges you but to give you a brief picture, you can choose to pay every time a user clicks on your ad or pay every time a user sees your ad.

 

4) Facebook helps you

Aside from you being able to choose who to target your ads to, you can also tell Facebook what you want your audience to do.

If you are running Facebook ads to bring people to your online store, you can tell Facebook to show your ads to the people in your audience who are most likely to buy from you.

Or if you just want people to visit your blog or business website to get to know you, Facebook will show it to the people who are most likely to do so at the cheapest possible price.

Or if you just want brand awareness, tell Facebook and it will show your message to as many people as possible.

Facebook helps you out because it wants businesses to succeed.

Facebook Optimization Options

 

Facebook helps you out because it wants you to continue using Facebook as an advertising platform.

If advertisers fail at Facebook, they will eventually stop and that’s lost business for Facebook. So coming in to Facebook advertising, you have to stay in the mindset that Facebook advertising aims to be mutually beneficial for you and the platform.

In other words, Facebook is not your enemy and it’s not just trying to drain your marketing budget.

 

5) Organic Reach is becoming more and more limited

In a nutshell, Organic Reach is how many people see your posts without having the need to pay for people to see them.

If you are admin to a very successful Facebook Page, you’ll find that your organic reach is very high. You can find how many people have seen your post below each one. You can also breakdown the reach in terms of how many likes, comments and shares it received.

However, for a lot of us, even though we have thousands of followers, you’ll find that your organic reach is below 500 per post, maybe even less. If you cannot get your audience to see your message, you won’t be able to get them to buy from you.

Advertising on Facebook allows you to reach a very big number of people outside of your own circle of followers and fans. If you’re having difficulty creating sales from your own fanbase, try looking outside for more customers.

 

6)    Facebook allows you to track and measure data

This is probably my favorite feature.

Facebook allows you to see whether or not your ads are actually effective.

If you want people to buy from you, you can track exactly how many people bought from you who were attracted by your ads.

Facebook Data

 

You can track how many people have seen your ad but did not visit your website.

You can track how many people went to your website but did not buy.

Most importantly, you can track return on investment by comparing the revenue you received from the purchases from Facebook users to how much you’ve spent for the advertising costs.

These data allow you to adjust and make more informed decisions on your business and especially the marketing aspect of it.

 

Final Thoughts

I hope those points gave you a better picture of what Facebook advertising can do and how it can help you as an entrepreneur or as a marketer. If it did, I’m glad to have helped. Please feel free to visit the blog from time to time (though I’ll be updating it at least once a week) as I lay out more information as to how to use and understand Facebook Advertising.

Just reach out to me for any questions or clarification if you need any.

Looking to Grow Your Business?

Learn about the 4-step process we use to help businesses generate more interest, get more customers and bring in more sales. Download our free quick-read pdf guide and apply it immediately.

Click here to access your free guide