Why Simple is Better#

Think about it: as a business owner, you have one budget. You don’t have fifteen different piles of money for ads. Whether it’s $10,$100, or $1,000 a day, you have one amount. You want to put all that money behind as few things as possible.

Why? Because you want Facebook to be able to optimize and learn as fast as possible using your budget.

If you create five or six campaigns, each with five or six ad sets, and then put hundreds of ads in there, you’re spreading your budget way too thin. If you only have $10 or$20 a day, splitting it across lots of campaigns/ad sets means each one only gets a couple of dollars. That’s just not enough for Facebook to learn anything useful. You won’t even make a single sale in each one!

You want every single ad set to get enough budget to make multiple sales a day. Trying to manage dozens or hundreds of ad sets with a small budget means none of them will get enough money to actually figure out who your buyers are.

So, stick to the simple setup: one campaign, one ad set, and just a handful of ads.

Why Only Track Purchases?#

When you tell Facebook every time someone buys something from you, you’re sending it a clear signal: “Hey Facebook, this is what I want! I want people who actually buy stuff.”

Facebook then uses that information. It waits for data from your website or shopping cart, sees the people who bought, and says, “Okay, these 5 or 6 people bought this product. I’m going to go find more people who look like them.”

If you’re not sending that purchase data back to Facebook, it has no idea who your buyers are or who to find for you.

On top of that, if you try to optimize your ads for anything other than purchases, you are simply not going to make money. Period.

I’ve seen this happen over a hundred times. People try optimizing for:

• Leads
• Webinar registrants
• Landing page views
• Impressions
• Video views

If you set your campaign goal to one of these, Facebook will just send you people who are good at watching videos, or opting into things without buying. It will send you “broke people” or people who just don’t take the final action of buying your product.

Most likely, you’re watching this because you want ads that bring in revenue. If that’s your goal, you must set up your shopping cart to report every purchase to Facebook, and you must tell Facebook that you want people who buy.

If you do just this – set up the simple structure (one campaign, one ad set, 4-5 ads) and track and optimize for purchases – it will work like magic every single time.

Why Turn Targeting Off?#

Because if you’re sending Facebook purchase information – pinging it every time someone buys and telling it you want more buyers – Facebook is smart. It knows how to find people.

It understands the language of your website. It generally won’t show ads in countries that aren’t buying. It won’t show ads to teenagers if they’re not buying your product.

If your product is mainly bought by women in their 60s, Facebook will see that every time you report a purchase. It sees who’s buying, where they live, what they like, what books they read, and it uses that data to find more people just like them.

Recommended Targeting for Beginners#

For someone just starting out, I usually don’t recommend turning all targeting off immediately. Instead, I recommend you use minimal targeting.

Make a list of:

1. Locations: What countries are most likely to buy? (If you only sell in the US, just target the US).
2. Age: What’s the typical age range of your customers?
3. Gender: What gender is your product for?

For example, if you sell a women’s weight loss supplement for women over 50 in the US, here’s what you do:

• One campaign
• One ad set
• A handful of ads
• Set up your purchase tracking (again, one click with Sam Cart!)
• In the ad set settings, limit the audience to:
  • Just the US
  • Women
  • Age 50 or 60 and up (whatever your range is)

That’s it! After setting that, don’t add anything else.

Avoid Over-Targeting#

Stuff like lookalike audiences, interests, or other detailed demographics? In my opinion, they’re a total waste of time. You’re essentially trying to outsmart Facebook’s algorithm, and you can’t.

Once Facebook gets 5, 6, maybe 7 or 8 sales, it learns a lot from those specific buyers. It runs that data through its powerful algorithm and finds more people wherever they are.

If you try to micromanage Facebook by saying, “Only show ads to people in this lookalike audience,” or “Only show ads to people who like these specific things,” what about all the other potential buyers out there who don’t fit those narrow criteria? You’re going to miss out on a ton of sales.

So, keep your targeting very, very simple: Location, Age, and Gender.

Stats You Should NEVER Watch#

If you’re running Facebook ads with the goal of making sales, you should never look at, never care about, and frankly, never even know what these metrics are:

• Clickthrough rate (CTR)
• CPC (Cost Per Click)
• Frequency
• Any of the other stats Facebook ad “experts” pretend are important.

Seriously, we spend $50,000 to$60,000 a day on ads, and I have no idea what those numbers are for our campaigns. And I just don’t care because they don’t matter.

The ONLY Stat That Matters#

If your campaign goal is purchases, the only thing you should watch is: How much does it cost you to get someone to buy?

Facebook actually makes this easy for you. The very first column you’ll typically see in your ad reports is the Cost Per Purchase.

It will tell you if your cost per purchase is $40,$80, $400, or whatever it is. That is the only metric that matters.

From this number, you can easily figure out your ROAS (Return on Ad Spend). If your product costs $100 and it costs you$50 to get a customer, your cost per purchase is $50. Your ROAS is$100 (revenue) / $50 (ad cost) = 2x or 200$50 to make $100. Pretty simple, right?

Keep your eyes laser-focused on the Cost Per Purchase.

Why Scale Aggressively?#

My standard approach is this: If my CPA is really low and good, and I’m getting at least a 2x return (or even 1.5x if I have a good profit margin cushion), I will double the ad spend practically every four hours. That’s how aggressive I get.

Here’s why: Every time you change your budget, even slightly, Facebook’s algorithm goes back into a “learning phase.” It has to figure things out again. It doesn’t matter if you’re super aggressive or super conservative with your changes; it resets.

So, if that’s the case, why would you want to take a month to slowly scale up your business, get more customers, and make more money? You wouldn’t!

If you could go from spending $100 a day to$1,000 to $10,000 all in a single day (if it’s working!), you’d do it, right? You wouldn’t prefer waiting a month.

This is exactly what we did with our Creator U brand when we first launched it. It worked incredibly well right from the start. I think I began at about $250 a day. It was crushing it in the first four hours. I doubled to$500. Later that same day, I went from $500 to$1,000, then $2,000, then$4,000. Over about 36 hours (less than two days), we went all the way up to spending over $50,000 a day.

I wasn’t necessarily ready to spend that much that quickly, but the campaign was working that well! Going from $250 a day to$50,000 a day in under two days did not break the system. Yes, maybe it took an hour for Facebook to adjust, but when you ramp up spending that fast, Facebook understands: “Okay, this advertiser is serious and aggressive. I need to send them good traffic and learn as fast as humanly possible.” And it will do exactly that.

Number 1: Your Day One Average Order Value (AOV)#

This simply means: How much money do you make on average every single time someone buys one of your products for the first time?

The biggest mistake businesses make – and why they complain Facebook ads don’t work – is they are happy or they just assume their Day One Average Order Value is simply the price of the product they advertise.

For example, if someone is selling a mouse for $100 and I ask them, "How much do you make every time somebody buys?" They might say, "Well, the price is$100, so I make $100.”

My immediate follow-up question is: “Are you trying to sell that customer anything else?” Do you have any:

• Upsells (offers shown after the initial purchase)
• Other items they can add into their cart before checking out (order bumps)
• Other offers you make after they buy the main product?

Usually, the answer is no. And if your answer is no, you need to fix that as soon as humanly possible.

If you sell anything – a digital product, a service, a coaching program, a course, whatever – and the price of your main product is, say, $50 or$100 (it doesn’t matter the price), you should probably be making three to five (maybe even ten) times more than that immediately on day one.

It’s actually very easy to get people to add other things into their cart if you know how to structure your offers well and use software that automates it for you. This is another thing Sam Cart is built for – maximizing your Average Order Value. It’s probably the best tool out there for it.

Instead of just making $100 when someone buys a$100 mouse, you get them to add an extra charger, a battery, a mousepad. On average, maybe that customer now spends $200 on that first purchase. That's a **$200 Average Order Value (AOV)**.

Another way to think of this is the Day One Value of Your Customer. At the end of that first purchase, what is that new customer worth to you that day? This is a number you need to know like the back of your hand. Memorize it. Be able to say it anywhere, anytime.

Number 2: Your Cost to Acquire a Customer (CAC/CPA)#

This is the one we talked about that Facebook does show you. It’s your Cost Per Purchase. How much did you spend on ads to get that specific customer?

Knowing CPA and Day One AOV Makes You Dangerous#

If you know these two numbers – how much it costs to get a customer (your CAC/CPA) and how much they spend on their very first purchase (your Day One AOV) – you will be extremely dangerous in business.

Number 3: Your Customer Lifetime Value (LTV)#

The third key number is the Lifetime Value of your customer (LTV).

Going back to the mouse example: you sell a $100 mouse, and the customer adds$100 worth of extras, making their Day One AOV $200.

Now, what is the value of that customer over time? What are they worth on Day 2, Day 7, Day 15, or Day 30?

You should be actively working to increase the value of that customer over time. This means consistently encouraging them to buy other things you offer, sending them promotions via email or text, or using retargeting ads. Your job isn’t finished just because you acquired the customer on day one! Your job is to keep making that customer more valuable over time, until they’ve bought everything you have or stopped engaging.

Key benchmarks for me are usually the customer’s value by Day 7 and Day 14.

The Math Equation That Matters#

Knowing this simple math equation – Cost to Acquire (CAC/CPA) vs. How Much They Spend on Day One (AOV) vs. How Much They Spend Over Time (LTV) – tells you exactly how much you can afford to spend on Facebook ads (or any paid ads).

For example, if you know it costs you $50 to acquire a customer (CPA =$50) and they only spend $40 on their first purchase (Day One AOV =$40), most people would look at that and say, “Why would I run ads? I’m losing $10 per customer!”

But if you look deeper and find out those customers buy a bunch more stuff on days 2, 3, 4, 5, 6, and by Day 7, that customer is actually worth $150 (LTV Day 7 =$150), now you see you’re spending $50 to get a customer who becomes worth$150 in a week. That changes everything!

Knowing these three numbers unlocks how much you can spend and how profitable you can be.