August 28, 2018

Shopify Facebook Ads Analyses Before Killing or Scaling

A step-by-step guide on dropshipping Facebook ads analyses
Before you make a decision about killing or scaling your Shopify Facebook advertising, you should make analyses. There is a lot of information in Business Manager thanks to Facebook pixel. In this article, you will see what data you need for analyses, how to analyze information and how to understand if a Facebook ad worked or not.

Table of content (click to navigate):

What Data Should Be Analysed

Before you get to the point how to analyze the reports you should know what data, in particular, is required. So, let's set up your Facebook ads reporting view for efficient data analysis.

Set the data structure for 2 reports before you start analyses:
  • Report 1

Go to Ads Manager > Click on Customise columns in Performance > Select the following 12 columns in the following order on the right. Use the search bar to find the points required
Sure, you may create any report you wish but not the one I offer. Use the search bar, tick the point you need. It will appear on the right side and you may drag it to place it in any order you wish. Whenever you need an explanation what each point means, just mouseover any point and you will see a tooltip.
Shopify Facebook Ads Analyses Before Killing or Scaling
Tick "Save as preset" > Give a name to the report, for instance, Social view > Click "Apply" button to save > The new report will appear in Performance
Now you may open the report and see the data in Campaigns, Ad sets, Ads.
Meaning of terms
  • Delivery means your ads status (Active, Inactive, or In review).
  • CTR (All) concerns all activity related to your ad (likes, shares, comments, link clicks, image clicks).
  • CTR (Link click-through rate) concerns only link clicks, for instance, people click the links to visit your store.
  • Link clicks are a number of clicks made.
  • CPC (Cost per link click) means a cost of each link click, for instance, if you spent $10 and there were 20 clicks, each link click cost you $0.5 (10/20=0,5).
  • Website purchases are a number of purchases made.
  • Relevant score is a measure from 1 to 10 using which Facebook says how good your targeting is. For instance, you promote fishing products and select some fishing interests for targeting. If your score is 9 or 10, it means your targeting is matching your product. If your score is close to 1, you should change something, as the lower the score, the worse. Your score should be no less than 6.
  • Report 2

Click on Customise columns in Performance > Select the following 10 columns in the following order on the right. Tick "Save as preset" > Give a name to the report, for instance, ROI view > Click "Apply" button to save > The new report will appear in Performance
Again, you may see the report with the data in Campaigns, Ad sets, Ads.
Meaning of terms
  • Website Content view - how many people viewed content
  • Website Add to cart - how many people added to cart
  • Website Purchases - how many people purchased
  • Cost per Website purchase - what's the cost per a purchase
  • Website Purchases conversion value means how much money you made. The amount is based on invoices. For instance, if one shopper bought something on your site and paid $80 and another shopper spent $100, it means there are 2 conversions and a website purchase conversion value is $180 (80+100=180).
Since the reports are ready and you may see your Shopify Facebook ads results let's move to the next step that concerns budget limitations.

Calculate Your Budget Limitation

Now you should calculate your max cost per action (CPA) to know what is the final amount of money you may spend on the exact product. A budget limitation is your central point. Only when you know your budget limitations, you will be ready to say exactly if it's time to stop the ad or continue running it, relying on the statistics collected.

CPA means how much acquiring a new consumer costs you.

Your CPA comes from your sales price minus the product cost.
For instance, a selling price of the leggings is $20.99. A supplier price of the items is $5.59 (including shipping cost), so CPA=20.99-5.59=15.40

According to the pricing calculator, there are different expenses you should take into consideration and at least transaction fees should be in your calculation. Let's say transaction fees are $0.40, so 15.40 minus 0.40 is $15.00, so CPA is $15.00.

It means you may spend maximum $15 on promotion. $15 is your breakeven. A breakeven is an amount when you neither earn, no loose money.
Shopify Facebook Ads Analyses Before Killing or Scaling
Retail price: $20.99
Another example: You sell the leggings for the price equal to $59.88. $15.88 is the supplier price including shipping cost, $2.00 are fees, so 59.88-15.88-2=42, that is CPA is $42.00. In this case, your breakeven is $42.00.

What is your CPA? Calculate your breakeven to keep it in mind.
Very important notice:

I realize you may be a beginner, however, I should tell you one more thing. I hope you won't get confused.

There are online store owners who spend more than their CPA. They do it because they know that when they retarget, their customers buy more. And as retargeting ads cost much less than targeting, the dropshippers sell at a loss to earn more later (upselling).

There is a term called "Customer Lifetime Value". It means revenue you get during the whole period of cooperation with your customer. You will be able to calculate it later.
When to Kill the Ad?
Here are two different scenarios:
  • Situation 1: Let's say your CPA is $15, you set $5 per day and run an ad for 3 days.
Day 1
You spend $5, your CPM (how much you pay for 1000 views of your ad) should vary at least between $10 to $20 (less than $10 is very good, more than 35 is not good), your CPC should be at least $1-2, your target number of clicks should be 3-5, no ATC and no sales is ok for the first day. If your situation is similar to this, you may continue.
Day 2
By the end of the 2nd day you spend $10, your CPM is $10-20, your CPC should ideally be $1-1.50, your link clicks should be 5, your ATC should be more than 1 and no sales are ok. In case you have these results, you may continue. It's better to stop the ad if CPM is more than 20, CPC is more than $2, the number of link clicks is less than 5 and there are no ATC and no sales accordingly.
Day 3
By the end of the 3rd day you spend $15, your CPM is at least $10-20, your CPC should ideally be $1-1.50, your link clicks should be more than 10, your ATC should be more than 5 and there is at least 1 sale in the ideal. This situation is ok. But if your CPM is more than $20, CPC is more than $2, ATC is less than 5 and there is no sale, it's better to stop it.
At the end of the 3rd day you spend $15 and your breakeven is $15, so you should have at least 1 sale. In this case, you may continue to run this ad. Always remember about your CPA to decide if it's time to kill the ad or continue.
  • Scenarios 2: If you run $20 budget ad and your CPA is still $15, in 24 hours the situation should be like this one:
Day 1
CPM should be $10-20, CPC should be $1-2, the number of link clicks should be at least 10, ATC is at least 5 and there should be at least 1 sale. Otherwise, it's better to stop the ad, if there is no sale, CPM is more than $25, the number of link clicks is less than 5 and ATC is less than 5.
It's a quick 1-day testing to get the results fast.
How to Analyse Shopify Facebook Ads?
Finally, you reached the point about Facebook advertising data analyses.
1
Go to Ads Manager. The first screen you see here is Campaigns with Performance columns that show some general data:
Shopify Facebook Ads Analyses Before Killing or Scaling
2
Click on the Campaign you wish to analyze and you get to the Ad sets. Look at the standard columns you see here:
Shopify Facebook Ads Analyses Before Killing or Scaling
3
Select the report you created before which is called "Social view" in Performance. Look at the data you see:
4
Then select another report called "ROI view" to see more important data:
5
The next tab you need is "Breakdown":
You analyze the data not only to know if it's time to stop the ad. You also need to know what should be changed in targeting to improve your results. Look at the options Breakdown provides and focus mostly on the following options.
6
Age, Gender, Age & Gender: These reports respond to the question what age range and gender convert best. Here is an example of what you may see:
Shopify Facebook Ads Analyses Before Killing or Scaling
The reports show you the age range and genders to understand how people react to your ads, what age range and gender have more link clicks and purchases.

If it's applicable for both genders, you should test your ads on both genders. You may think one gender will do better than the other one and the test results may show you another situation. The same with age ranges, test then if it's applicable.
7
Country: Get the answer to the question what country responds the product best.

Again if it's applicable and you target 5 main English speaking countries (USA, Canada, Australia, New Zealand, UK), you can select "Country" in Breakdown and look at the data you have.
Note: Look at the list of 13 best countries to dropship and learn why they are the best for targeting.
8
Region: Check what region responds to the product best, if you target one country. A product may be related to a region, for instance, some parts of the US have more snow during the cold season.
9
Platform & Device: See here what responds better: Instagram or Facebook, mobile or desktop, iOS or Android.
Final Thoughts
Reports data is stubborn, for this very reason you may rely on it to know for sure what type of audience responds to your product, what audience is relevant, if you target properly. Answers to all your questions you may find in reports. Learn to draw a conclusion from the offered insights. Your next step is killing the ad or building another ad (or a new ad set) narrowing down your targeting. Learn 11 powerful ways to scale your Shopify Facebook ads.

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Content Creator at Dropwow
Gulnur Ismailova
Content Creator at Dropwow