Dropshipping and Facebook Ad Spend

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We all ask ourselves when we first encounter Facebook Ads is exactly, How much should we spend on our Facebook Advertisement?

There is a lot of disagreement when it comes to the Facebook way of advertising, so we will do our best to give you an answer to this important question in this blog post.

Most people will tell you that Facebook Advertising is not effective enough and that when it comes to actually sell products Google Ad is the king. This may not be entirely true because many businesses manage to make huge sales through Facebook.

Facebook is an extremely effective advertising platform for retargeting potential consumers, increasing your audience, and raising awareness about your brand. All this we have mentioned is of great importance for eCommerce. Exactly from everything we have mentioned, you need to consider investing a certain percentage in Facebook advertising.


Table of content


Cost of Facebook Ads in 2020 and 2021 and how does it all works?

Optimizing For Maximum ROI and Dynamic Product Ads

Is Lookalike Audience important?

How To Set Facebook Ads Budget

Is Facebook marketing important for dropshipping?



facebook ad example_winner picker

source: cardinaldigitalmarketing.com


Cost of Facebook Ads in 2020 and 2021 and how does it all works?


It is challenging to answer the question, “How much do faFacebookds really cost.” Facebook ad auction is what determines the final price of a Facebook ad. If you don’t know how Facebook Ad auction works, we will explain it to you now. When we talk about Facebook Ads Auction, you need to know that there is essentially a Facebook algorithm that determines which ad will be seen more and less compared to the competition. Many people assume that the Facebook algorithm makes this decision based on the investment factor, i.e., the higher bidder. This is somewhat true; that is, other factors influence your ad to be placed ahead of your competitor. Although bidding plays an important role, some of the equally important factors for proper ad positioning and high visibility are Estimated Action Rates, user Value, and the bid amount.


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Such a complex decision whose ad will be more visible and better positioned concerning the competitor is that many advertisers compete for the spot only. When running an ad, the ad with the highest total value wins. The total value is calculated by these factors:


  1. The bid
  2. Ad quality and user value
  3. Estimated action rates


The Bid


The bid represents the maximum amount we are willing to pay each time the user completes a desired action. Facebook offers us many different bidding strategies, and only one of them is the lowest cost bidding. What is also very important to know is that ad prices are not the same in all countries. We will talk about this another time, but it is important to note that the difference can be large and potentially impact a business.


Ad quality and user value


When launching an ad, Facebook’s algorithms observe and analyze the ad and decide which ad will be in higher positions based on the design, text, and overall sensationalized language. We will also talk about this some other time because it is an extensive topic.


Estimated action rates


This factor represents the percentage of potential user interactions with your ad estimated after analyzing your ad.


Facebook algorithms evaluate these three categories and then combine them into a total value score. These factors are compared to other ads targeting the same targeted audience and then decide which ad will be cheaper and which will be more expensive or which will be better positioned and which is worse, which have poorer quality are more expensive, and that is why it is necessary to approach each ad with a great deal of seriousness and with a lot of attention.

If, for example, you set your budget to be $ 5 a day, Facebook’s algorithms will do their best to show your ad to as many users as possible, and that wouldn’t leave much room for your ad to show further. Instead, algorithms display your ad to users who are estimated to have a value of about $ 0.50 per click, so your ad sees 10 different users.


Optimizing For Maximum ROI and Dynamic Product Ads


It is essential that you set up Facebook campaigns to target people who have visited your website but have not made a purchase. This type of Facebook advertising aims to bring those users back to your site to increase the chance of increasing ROI.

If you opt for this type of dynamic product ads and place such ads correctly, you will display the ad to people who have already been to your website. The ads will be displayed to users on the Facebook platform. If you set everything up properly (image, text, and ad message), you will give them a clear knowledge to return to your site.


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In this type of advertising, you can be very creative, and in different ways, you can attract the attention of people who have already been on your site and who have interacted with your brand. If you’re advertising products that are a little more expensive, always make sure to wait at least a week for the basic interaction to give potential consumers time to think about whether they need your product or not. If you are selling products at a lower price, retarget them as soon as possible. When cheaper products are sold, potential consumers think less about buying and are more characterized as impulsive consumers. Use it to your advantage.


Budget optimization


 It is recommended that you set aside 10 -15% of your monthly budget that you have set aside for advertising and direct those funds to dynamic product ads. If you plan to invest, say, $ 1,000 next month, set aside between $ 100- $ 150 for Facebook retargeting campaigns. This way, you will get to know Facebook Dynamic Ads and start to master retargeting campaigns more.


Is Lookalike Audience important?


A lookalike audience is significant, not only for dropshipping business but also for eCommerce business in general. If you meet the term Lookalike audience for the first time, we will now bring you a little closer to it.

A lookalike audience is a group of most similar users to existing users interacting with your Facebook page, Instagram, or website. A lookalike audience is defined, especially within the Facebook platform itself. To create this type of audience, you first need to have a sufficient number of existing interactions with your online business.

All Lookalike audiences have a source audience. Those source audiences are a custom audience that you can create from different sets of data.


For example:

  • Tracked users from Facebook Pixel. Those are users who have visited your website, for example
  • Users who are already fans of your page
  • If you have a mobile app, you can track those users by Facebook integrations


Choosing Your Source


When creating Lookalike Audiences, make sure that the basis from which you will retrieve the data is tailored to the goal. There are many ways you can create a lookalike audience, as we have already mentioned. You can load a Customer List of your email addresses or phone numbers that you have collected from your users or create a custom website audience (WCA) based on a Facebook pixel that will track visitors’ behavior on your website. When we mention the Customer List, Facebook will automatically merge email addresses and phone numbers with Facebook account users. When the connection is made, then Facebook algorithms evaluate these users of the Facebook social network. Based on online traces, i.e., these users’ behavior, the algorithms create a lookalike audience.


example of an facebook ad_winner picker

source: cardinaldigitalmarketing.com


When using Facebook pixel or mobile app events as your source file to build a lookalike audience, you need to know that there are pros and cons to building an audience like this. The positive side of the lookalike audience built via Facebook pixels or app events will automatically update your seed. Creating a lookalike audience this way also allows you to define the event you count as a conversion.

When we talk about the negative side, we must mention that pixel or app events as your source will capture interaction only after it is built into your site; that is, it will take some time to collect data based on which you will be able to make your lookalike audience.


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How To Set Facebook Ads Budget


When talking about the budget you need to set aside for your Facebook ad, it is important to determine what type of ad is needed for a particular product or service and what is the ultimate goal that you want to achieve with a Facebook ad? It’s not the same when you want to increase visits to your website or when you want to have more sales of a particular product. It is for this reason that it is important to set a goal first.


After that, we choose some of the options Facebook offers us when advertising and start an advertising campaign. We will talk more about this in one of the following blogs; for now, we will mention the basic steps you need to follow in order to achieve positive results.

Here are some tips we recommend:


  • When you run an ad, let it take at least 3-4 days to optimize, but the past practice has shown that it is best to leave the ad to be optimized for a week.


  • During the test phase, we suggest you start with a daily budget of $ 5-10 for each ad. If you want, you can invest more to achieve even greater reach or possibly even more significant results.


  • Keep the optimization for ad delivery in the Default settings


Then you need to determine whether you will use a daily budget or a lifetime budget. The daily budget focuses on evenly distributing the budget daily, while the lifetime budget allows you to spread the budget more unevenly. In both cases, you will not go wrong, but you need to know when you choose one of these two options after the ad’s start will not have the option to change the amount.


Is Facebook marketing important for dropshipping?


The answer is more than simple. Yes. Facebook marketing is very worth investing effort, time, and money. Facebook is a social network that has 1.69 billion users. Let’s stop for a moment and think about this issue…


The number of users of this social network is growing day by day. The impact that Facebook has on our lives and everyday life is of great importance. Considering only the number of people we can reach on this social network makes Facebook marketing worth the effort. In addition to the number of users, there are different ways to see our message by many users of this social platform. Still, what is perhaps most important is the ability to reach the users who suit us best. In other words, the targeting offered to us by Facebook advertising borders on magic. The detailed targeting that Facebook Ads allows us is possible because of only one thing: every step we take is recorded, and every digital trace follows us. While this seems pretty intimidating, on the other hand, it allows us to improve our business and show ads to people who are most likely to interact with our ad.


Dropshipping and eCommerce, in general, are closely related to this type of advertising. Since the whole business philosophy of dropshipping is based on selling products over the Internet, it is logical that these products must be seen somehow. Facebook is one of the most important advertising channels when dropshipping is mentioned because it offers us to display products in detail, create different types of ads, and most importantly, direct them to consumers that Facebook algorithms will interact with our product.


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