Fair warning … this is NOT for Beginners.
It is only for those who are serious about improving their ecommerce store/media planning results and seeing tangible improvements in efficiency. I’m assuming that you already have an e-commerce brand, some experience in media buying/have a media buyer and a properly functioning pixel.

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Yes, these are the EXACT media buying strategies that we implement consistently to improve our clients’ results on a daily basis. Below are some examples of the results that we have achieved using this same strategy :

Overview of the lessons in this Guide :-

1. Ecommerce store merchandising
2. Setting Up Cost cap Bidding & why thats where the magic lies.
3. Hacking Cost Caps Auction
4. 7 levers : things you can influence for better results.
5. Attribution windows For media planning

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Merchandising your Ecommerce Store 

“Advertising moves people toward goods; merchandising moves goods toward people.”

– Morris Hite

Before we dive into the details and design marketing campaigns, it’s important to make sure that the fundamentals are in place. Merchandising for an Ecommerce store refers to the process of strategically presenting and promoting products to customers in order to increase sales and improve the overall shopping experience.

To Merchandise your Ad Account you need to be able to answer the following questions ->

• Which products have the Highest Volume (Bestseller) ?
• Which (of those) Products have the Highest Margin ?
• Which (of those) Products have the Highest LTV (in the time window you are willing to afford) ?
• What is the Desired CPA & ROAS needed for each of them?

Here is a spreadsheet which you can fill with your Ecommerce brand’s data to be able to answer these questions for your brand.

Once you input the data in the sheet for Order Quantity, Order rev, Refunds, COGs, LTV and profitability target. The sheet should be able to calculate the products that have the highest Margin and also are bestsellers along with their KPIs. Those are the products you should be promoting in your ad account and be making product specific funnels around.

“I heard a great story about a plane that crashed in the Amazon jungle with 50 survivors. They all had machetes and decided to hack their way out of the jungle toward a village they knew existed not too far off. The engineers sharpened the machetes and showed everyone how to cut efficiently at 45 degrees. One philosopher in the group shinnied up a tree to see if he could pinpoint the village and determine its direction. Sure enough, he yelled down that they were hacking in the wrong direction.”

The point of this exercise was to make sure before we go hard and start hacking our way through the account, we make sure we are clear on our path and we are actually promoting the right product.

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Setting Up Cost Cap Bidding, Magic of Media buying.

If you haven’t tried “Manual Bidding” option in your ad account yet, you will see the biggest improvements in your Ad account after giving them a try. Or might be that you are just wondering what all the fuss is on twitter about? How to use Cost caps properly ?or what to do in a particular scenario ? This Guide is for you 🫵🏼.

What are Cost Caps ?
According to Facebook, Cost Cap is a tool that maximises the cost efficiency of your ad campaign. It aims to get you the best possible results, such as purchases or instals, at or below your set maximum cost per optimization event. This means that even if you allocate a large daily budget of, say, 100k, the algorithm will not spend the entire amount if it doesn’t think it can achieve your target CPA within the time window it is optimising for.

It’s important to note the key term here: “Believe.” This is the foundation for the next section, which involves hacking the Cost Cap auction mechanism. But for now, let’s focus on understanding how Cost Cap works.

How are they useful to Me ?
Given the current economic climate as of this writing on March 26th, 2023, access to capital has become increasingly difficult. As a result, it’s crucial for all ecommerce business to ensure that every dollar spent on advertising provides a positive return on investment. Simply put, there’s no room for wasting money on ineffective advertising campaigns.

This is where Cost Caps come into play. By setting a maximum cost per optimization event, Cost Caps ensure that the algorithm will only spend the budget if it can achieve the target CPA within the specified time window. In other words, Cost Caps automatically prevent the spending of “bad ad spend” that don’t provide a positive return on investment.

How to Launch Cost Caps ?
As this guide is aimed at providing tactical insights rather than providing a step-by-step guide on launching cost caps, I will not be providing a detailed explanation of the process. However, if you are looking for a comprehensive guide on how to set up cost caps, I would suggest referring to Facebook’s guide. It can be particularly useful for those in the target audience who are seeking a more in-depth understanding of the process.

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Behind the Curtains : The EXACT Cost Cap structure we use in our Ad Accounts ->

At our company, we firmly believe in Two Core Philosophies that we impart to our team members. These guiding principles are reflected in our cost cap structures, which are designed to optimise performance and deliver maximum value to our clients.

1. There are 3 core parts of every campaign –>
   • The Landing page – which indicates the Offer + Product
   • Messaging for Target Market – how we are selling the product (We have a systematic process of testing this, which we call the “Creative Hierarchy”.)
   • The bidding Process – which has always been the Cost cap structure.

2. Think of EVERY Cost Cap funnel as a “Pipe” and stack em –>

We adopt a “pipe” ideology when it comes to testing and scaling campaigns. With each new campaign launch, we open up a new pipe and push as much volume through it as we can, closely monitoring the results. When a pipe stops spending, we turn it off and focus on optimising the campaigns that are still performing.

We’ve put this approach through to the test and have even maxed out the number of active ads per page, at peak once running up to 120 campaigns simultaneously. To dive deeper, I recommend watching this video from a good friend of mine, who provides an insightful explanation of the pipe ideology.

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Ad Account structure for the Most optimal use of the Cost Cap algorithm ->

Campaign Level –

• CBO (Campaign budget optimisation turned on) 
• Daily budget = Enough to get 7-14 purchases/day
• Objective : Conversion / Sales

Ad Set Level –

• Cost Cap equal to what the target CPA of the product 
• Attribution window – 7 Day Click or 1 Day Click based on time lag report.
• 1 ad set have the LAL stack audience and the second can be wither Broad or Interest stack – depending on what worked best on historic performance.

Ad Level –

• 3 AITs in total, same 3 in both the Ad Sets
• The creatives in each are in accordance to the Creative Hierarchy structure.

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Bonus : Creative Hierarchy –

Here’s how we organise every creative drive we receive for content. ^.

Nomenclature of Campaigns ->

1. Changes done to Campaign
2. Agency name
3. Bidding – Type and value
4. Product / Offer
5. Landing Page
6. Angle
7. Ad Format
8. Ad Variation grp

This is because when we test these creatives using the Cost Cap structure, we can easily analyse the campaigns and identify trends. These trends provide crucial insights that guide our decision-making. 

And by testing three different variations of the same creative per campaign, we can obtain more significant results than by simply putting ten different creatives in a single ad set and declaring failure if the ad set doesn’t spend.

Launching in the following structure helps us to :- 

1. Leverage the facebook Auction system to the fullest
2. Gives clarity on what is working and what is not on a campaign level for all the Inputs 
3. Gives higher chances to success for every creative than bulk testing
4. Isolated control and Manual influence to every single variable of the campaign – Crucial to the next part of the Article

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Hacking Cost Caps (for Facebook Media Buying)

Cost Caps can work wonders for your campaigns, but there are times when they don’t perform as expected, and that’s where the opportunity for hacking is. 

The job of Cost Caps ? 
It is to ensure that even if you allocate a high budget, Facebook’s algorithm won’t spend it if it doesn’t believe it can get you the desired CPA within the optimization window.

The problem ?
When the Caps don’t spend, it becomes a problem as then you will be under on your spend goals and probably creative testing goals to. The reason behind this is that Facebook’s predictive algorithm isn’t always accurate, particularly for smaller brands spending less than 200k/month (Mostly startups) Due to the limited data available, the algorithm may fail to predict accurately. As a result, Facebook will not spend on that campaign, which means it will never learn.

“Why aren’t my campaigns spending on Cost Caps, and what can I do about it?”

– The most often asked question on cost caps

Our solution to that is a Scenario based approach ->

Scenario 1: You’ve never tested Cost Caps on your account before, and your highest volume campaigns are only getting 1.2x ROAS. You duplicate the same campaign into CC, but it’s not spending. What should you do?

Hack 1: The point of CC is not to instantly make you profitable by simply changing your bidding strategy. Instead of targeting your desired CPA, try setting the profitability target at a level that’s better than what your highest volume campaigns are currently achieving. For this scenario, consider setting your CC on duplicates of the winning campaign with a target CPA of 1.5x ROAS.

The case I want to make here is that – “Why are you comfortable with your top-spending campaign generating only 0.3x ROAS at a $113 CPA, compared to a duplicate of the winning campaign using CC at a $40 CPA. If it doesn’t spend, you might assume it’s not working”. But why not see if you can get that top-spending campaign down to $70-$80 CPA? Once you achieve that, progress to working on the creative to bring it down further to $50-$60 CPA. This is the Evolution of Cost Caps. You’re not going to achieve it instantly, but you’ll gradually become more efficient with the campaigns you have.

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Scenario 2:  You’ve previously had success with Cost Caps but are now experiencing issues with New campaigns not spending ?

Hack 2: It’s important to consider the impact of poor-performing recent campaigns on your account’s deliverability. Facebook’s algorithm will take into account the Estimated Action Rate and Conversion Rate from these campaigns when assessing the potential success of your new campaigns, which can hinder your ability to achieve your desired results.

To address this, it’s recommended to use a forceful approach to make the Cost Caps spend by increasing the cap consistently until it matches the expected CPA based on the new “Expected CR.” This may require increasing the Cap by a small amount every few hours and monitoring closely until the campaign starts to spend. Once it spends, you can normalise the Cap back to its original level or turn off the campaign and test new ones.

By taking this approach, you can help improve your account’s overall deliverability and increase the likelihood of success with future campaigns.

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Scenario 3 – I need to make Cost Caps work and need to convert the account from Lower Cost to Capped, How do I do that as they are not spending on caps ?

Hack 3 –  Here’s what I suggest:

1. Duplicate the campaigns that are performing well in the account into cost capped campaigns with the same CPA goal, or slightly higher (e.g. 10% above). If you’re able to achieve similar volume and performance in the capped campaigns, you’re on the right track. If not, try adjusting the caps up or down to find the sweet spot.
2. Launch product-specific campaigns that follow the creative hierarchy for new creatives. Start with caps set at the CPA target of the account and monitor their performance real-time closely.
3. If there’s no spend in the first 6 hours, bump up the caps by $5 and continue to monitor. After 24 hours, half of the campaigns are likely to be spending. If a campaign has a low CTR and high CPC, it’s probably not going to work. If a campaign has a good CTR but no purchases, leave it at that cap for 3 days.
4. For campaigns that don’t have data or haven’t spent, gradually increase the cap up to a maximum of 3 times the target CPA, while monitoring closely. If a campaign still doesn’t spend or perform well after 48-72 hours, consider normalising the cap back to the target CPA or turning off the campaign.
5. For campaigns that have spent and performed well, scale them up if they’re still performing well after the time frame of the attribution window. If they’re not performing at or above the target CPA, reduce the cap or turn them off depending on how far off they are.

By following these steps, you can gradually convert the account to cost caps while maintaining performance and minimising risk.

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Scenario 4 {Bonus} – I Scaled campaigns on Cost Caps but they are not working ?

Hack 4 – it’s important to look at the attribution windows and determine if there is a significant difference between the multiple and one-day click attribution windows. If there is a difference of more than 20%, it could mean that the campaign is picking up a lot of view-through attribution, which may not be providing as much incremental value to your business as you think. This can be a red flag for scaling as the data you were using to make your scaling decisions may have been inaccurate. Therefore, it’s important to carefully evaluate the attribution data before making any decisions to scale campaigns on Cost Caps.
Depending on how well you have UTMs and GA pixel code on-site set-up, can reference the campaign roas in relation to the ROAS on google analytics. Google analytics is a little more useful if you have an omnichannel approach to  your ecommerce marketing strategy.

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Pro tip : If you wanna be more savvy, as these are quite programmatic steps – you can set-up campaign specific automation rules which can help you track these steps automatically.

Caution :- This is exclusively for facebook media buying, wouldn’t recommend applying same strategies for other Ad networks you are using – Tik tok, google ads or any paid search/ PPC platform.

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7 levers : things you can influence for better Results for your ecommerce store

“Roas is like MER, it hides the fact about volume”

– Jayden

Scaling on a Cost Caped account requires understanding the levers that provide incremental value to the business . We call it the Circle of Influence, which includes ->

(No particular order)

1. Landing Pages / Offers
2. Headlines
3. Copy
4. Creatives
5. Bidding Mechanism
6. Target Cap
7. Attribution window

By testing and optimising these variables, we can increase our chances of success when launching new campaigns.

To maximise our chances of success, we launch as many campaigns as possible and stack the spend on each other. Every time we have a winning campaign, we duplicate it and try all 8 variables to create new potential funnels. By doing so, we were able to launch 7 additional campaigns for one example campaign, which combined even spend more than the original campaign.

While not all campaigns will work, we can cap our spending to avoid burning money. But when a campaign does work, we can push more profitable spend than if we were to do nothing. So, the key to scaling on Cost Caps is to test and optimise as many variables as possible and launch as many campaigns as you can.

Example for this campaign alone we were able to launch 7 additional campaigns which combined even spend more than the original campaign even though according to facebook the campaign was capped and couldn’t spend more on the same CPA.

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Attribution window in Facebook Media Planning

To truly maximise the value of your campaigns, it’s essential to understand the role that attribution optimization plays. Attribution optimization refers to the method used by Facebook to attribute conversions to specific ads and campaigns, and it can have a significant impact on the results you achieve.

Categories of attribution Windows ?
When it comes to attribution windows, there are two main categories: click and view. Click attribution is when a person clicks your ad and takes an action, while view attribution is when someone sees your ad but doesn’t click it, yet takes an action within the attribution window.
This is what connects the entire auction system, target CAP, creatives ecosystem together.

Types of Attribution Windows ?
There are also different types of attribution windows, including ->

• 7-day click
• 1-day click 
• 7-day view
• 1-day click or 1-day view (Default)

 The optimal choice depends on the product or service you’re advertising and the consideration period required for the purchase.

For instance, if you’re promoting a mattress that requires a long consideration period, 1-day click may not be the best option, but if you’re advertising a product where 90% of purchases occur within 24 hours, then 1-day click may be the best choice.

Personally, I’m a big proponent of 1-day click attribution as I believe that view attribution takes credit for performance that doesn’t necessarily belong to the campaign. But beyond personal opinions, there are several reasons why 1-day click optimization is preferable. And that’s why I wanna make the following case of 1DC vs 7 DC.

Case of 7 Days click (Vs) 1 Day Click

Why Attribution window matter ? 
In manual bidding, Facebook tries to optimise the campaign to achieve the target CPA as an average of results over the time period it’s optimised for. A cost cap of $34 on 7-day click means that Facebook will try to get the weighted average of CPA for the campaign over seven days to be close to $34, which means that some days will be over and some days will be under.

In contrast, a cost cap of $34 on 1-day click means that Facebook will try to optimise and achieve the $34 target every day. This may not seem like a big deal at first, but it becomes an issue when making decisions about the campaign’s performance.

If a newly launched campaign is optimising for 7-day click and you make a decision based on the first three days of data, you’re essentially missing four days of crucial information. By making changes at this point, you’re paying for the worst performance of the breakdown effect and not reaping the full benefits.

In contrast, if the same campaign is optimising for 1-day click, and you make a decision based on the first three days of data, there’s a higher probability that you’ve made the right decision, and that performance would be indicative of future performance.

Therefore, it’s essential to understand the role that attribution optimization plays in your campaigns and choose the right attribution window based on your product, service, and desired consideration period. Ultimately, this can help you make better decisions and maximise the value of your campaigns.

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Conclusion ->

In summary, the ultimate goal of media buying is to allocate budget in a way that yields the best marginal outcome. This guide was crafted with that goal in mind,

1. Following a process of identifying and redirecting spend away from products that don’t provide sufficient marginal dollars and towards those that do.
2. We leveraged cost caps to ensure that budget is not wasted and pushed more dollars towards successful products & campaigns 
3. We also troubleshooted ways to make caps work for your account if they don’t currently.
4. We also utilised the Circle of Influence, which includes 7 core levers, to maximise the amount of high-performing spend we could push through the account. 
5. Additionally, we explored the importance of understanding attribution windows to increase the incremental value of campaigns.

Hope you all loved it ❤️, this is the First blog I have ever written and wanted to build it in a way so that it has the potential to become the definitive piece for facebook media buying in the digital marketing/ Digital media/ Digital advertising Space on the internet.

if you have any questions or concerns feel free to reach out to me on 

Twitter – https://twitter.com/Joy_11_Sharma
Linkedin – https://www.linkedin.com/in/joy-sharma-9384241b7/
(My social media profiles)

Additionally, if you’re interested in having your ad account audited or a partnership, you can drop your email below and we will reach out to you. This can be a great way to gain a better understanding of how your ad campaigns are performing and how you can improve them 🚀🙌🏻 .

Thank you for taking the time to read this post. We hope that it provides valuable insights and helps you achieve success in your digital marketing and social media efforts

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