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BREAKDOWN OF FACEBOOK ADS FOR DROPSHIPPING BRANDED STORE WITH SHOPIFY 2024

Introduction

In this article, I’m going to share how I analyze my Facebook ads and how I began scaling my dropshipping brand, a men’s clothing store. We'll examine the specifics of our advertising strategy and performance metrics, which will help you learn how to read data effectively, rather than providing a step-by-step ad setup guide.

Initial Setup and Performance

We launched our campaign on September 1st with an initial budget of $ 100. Since then, we have spent approximately $ 1,700 and generated around $ 3,800 in revenue, giving us a break-even point of $ 1.48 in return on ad spend (ROAS). Although our ROAS isn't sky-high yet, our primary focus at this stage is on cost per acquisition (CPA) and finding the right messaging for our ads.

We started off modestly, with some days only spending $ 30 of our $ 100 budget. Gradually, we've begun to scale up, collecting valuable data along the way. This data has been critical in identifying our winning ad message but highlighted a rising frequency, indicating that we need more diverse ads in our campaign to keep reaching new customers.

Analyzing the Data

When looking at the last few days of performance, my focus turned to specific key metrics. The cost per click (CPC) has risen, along with the cost per thousand impressions (CPM), which often comes as we penetrate the middle funnel more deeply. This is typical behavior as the audience becomes more targeted and competitive.

In our ad sets, several ads were marked as 'learning limited.' This means the system needs more conversions—specifically 40 purchases—to exit that learning phase. It's important to note that this is a common challenge faced by real brands and dropshippers.

Through our data analysis, we discovered our most effective ad background—a black background for our clothing item. After further refining our visuals, we achieved a 2.43 ROAS, with our ads acting primarily to retarget previous visitors.

Demographic Insights

Through demographic insights, we learned that the bulk of our spending—and consequently our earnings—was among 65-year-old men. This revelation allowed us to tailor our product page to this specific audience, enhancing our messaging based on their preferences and driving conversion rates.

Similarly, by isolating geographical performance, we found that states such as California, New York, and Texas were yielding the highest returns. This information informed our influencer partnerships and targeted campaigns, ensuring that our ad spend would resonate more effectively within these key demographic areas.

Testing and Scaling Strategy

Our testing strategy began with a single campaign budget optimization (CBO) of $ 100, utilizing one ad set with 10 images and various messages derived from market research. Every winning message led us to create three new ads, utilizing the winning text to maximize impact.

Facebook's algorithm is designed to allocate ad spend to ads that perform well, which saves us from wasting money on poor-performing ads. Understanding this can clarify why some campaigns succeed while others falter. Currently, our CPA is around $ 35, but we're aiming to bring it down further. As of today, we’re pleased to see improvement with a CPA at $ 29.

High frequency rates prompted us to launch a new batch of ads, so we’ll keep monitoring their performance.

In conclusion, effective analysis, ongoing testing, and keen market research are critical components of running a successful dropshipping brand. For those on a similar journey, joining our Discord channel is highly recommended, where we discuss eCommerce topics and share insights without any sales pitches—just a free community of like-minded individuals.

Keywords

  • Facebook Ads
  • Dropshipping
  • Shopify
  • ROAS
  • CPC
  • CPM
  • Cost Per Acquisition
  • Demographic Analysis
  • Target Audience
  • Influencer Marketing
  • Campaign Scaling

FAQ

Q1: What is the primary focus in the early stages of Facebook advertising?
A1: In the early stages, the primary focus is on understanding and optimizing the cost per acquisition (CPA) and finding the right ad messaging rather than just maximizing return on ad spend (ROAS).

Q2: What does 'learning limited' mean on Facebook ads?
A2: 'Learning limited' indicates that an ad set hasn't generated enough conversions (typically 40 purchases) to exit the learning phase, affecting its performance.

Q3: How important is demographic targeting in advertising?
A3: Demographic targeting is crucial as it allows advertisers to refine their messages and improve conversion rates by focusing on audiences that show the most interest and spending potential.

Q4: What are effective strategies for scaling Facebook ads?
A4: Effective scaling strategies include continuously testing new ads, optimizing high-performing creatives, and understanding which demographics yield the best returns.

Q5: How can market research improve ad performance?
A5: Conducting market research can provide insights into customer preferences and behaviors, allowing you to tailor your ads and product pages to resonate with your target audience effectively.

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