How to Blow Up an eCommerce Business With Facebook Ads  🔗 **Source:** [How to Blow Up an eCommerce Business With Facebook Ads](https://share.snipd.com/episode/1cc56871-4cdd-4346-b612-f3a503abd56d) ## Highlights - **Prioritize Profit Over Pure Efficiency** - Profit, not efficiency metrics, should be the primary goal for ad-driven businesses. - Sam Palero recommends focusing on contribution margin (10–20% profit) over chasing high ROAS to enable sustainable scale and LTV growth. Transcript: Sam Palero A hundred percent. I think there's two things. First, people get really obsessed with efficiency metrics, which are very important for making sure you're not hemorrhaging the business, you're not losing money. But the ultimate goal of every business is to make as much money as possible any given day. Profit is the goal. And a lot of the times we get really, really caught into, how can I get a super, super high return on ad spend or really low CPA? And the reality is, yes, those are good metrics to understand, like, can I spend more money or can I pull back or how healthy is the business? But those are not good metrics to understand what's going into your pocket at the end of the month, the end of the day, et cetera. So I think more businesses should continue to focus on profit as their core metric, contribution margin, if you will, and less on the efficiency metrics. ([Time 0:04:58](https://share.snipd.com/snip/c7f9fe1a-642f-4b26-b0ec-6ac75e2be335)) - **Use A Four Part Ad Account Structure** - Build a four-part account structure: a prospecting CBO, a retention campaign, optional retargeting, and an optional scaling campaign. - Use packs (ad sets) inside prospecting to control spend with minimums/maximums and protect new creatives. Transcript: Sam Palero We have at the top of our account, the core of our entire account is a prospecting campaign budget optimization campaign. That is basically one single prospecting campaign that hosts all of our, we call them packs, but they're ad sets. Each round of creative is a new pack. It's going to sound a little advanced quickly, but it's not that complicated. Prospecting campaign, multiple packs. Second, we have a retention campaign. This is so critical. We need to make sure that when we increase our spend on Facebook ads or decrease, we know where that spend is going. We know, is it going to new customers? Is it going to existing customers? Is it going to people mid funnel? Where is it actually driving? Facebook will tell you consolidate, consolidate, consolidate. The problem with that is as you increase your spend, especially if you try to increase substantially, you're likely to hit roadblocks that feel like when I scale, my row as declines. If you break things out properly, you will know for sure I'm spending more on new customers. I'm spending more on Engage. I'm spending more on existing customers. So back to the structure, prospecting CBO. Then we have a retention campaign that's all of our existing customers. And then we have two optional campaigns. The first optional campaign is a retargeting campaign. This is just people who are down the funnel on your website. Maybe they're engaging with your content, but they have not purchased. No money's been transacted. And then we have an optional scaling campaign. This is like your real just one spot for your top three to five ads that forces more spend against those ads. It does nothing special. It just forces spend against them. And what we find in this structure is we have a good balance of control and a good balance of letting the algorithm do its thing. So the algorithm can do its thing mostly in the prospecting campaign because it could spend freely across the number of ad sets and packs that you have. That's extremely valuable because ([Time 0:10:56](https://share.snipd.com/snip/78b002ac-bf7f-41ad-ab49-484c113d04d2)) - **Build A Creative Engine Focused On Avatars** - Make creative the priority after structure and treat it as a creative engine that continually produces targeted assets. - Andromeda makes ad messaging map directly to which people see your ad, so drill into specific avatars and problems. Transcript: Sam Palero Creative. Creative is the bullet right now. It's the most important piece, I believe, once you've your account structure. Again, we could use a house as an analogy here. You can't build the house. You can't build the beautiful rooms inside the house without the foundation being set. Car example is even better, right? It's like the creative is the body of the car. The foundation is the engine, right? Or vice versa. You need to have both in place to sustain each other. Essentially creative changed massively about a year ago now, but really most notably, um, around six months ago, give or take with the Andromeda updates that came around just about Everybody has only been able to say Andromeda, Andromeda, Andromeda and blame Andromeda for everything. Effectively, what Andromeda has done is it's condensed down the ability for Facebook to serve the correct ad to the correct person at the correct time. Just like how easy way I think ([Time 0:15:40](https://share.snipd.com/snip/89d88414-4d6e-4b19-8f62-68bf70e69190)) - **Manufacture Creative Hits By Iteration And Swiping** - Manufacture hits by producing many targeted variations and copying proven competitive ads for inspiration. - Use tools like the Facebook Ad Library to find long-running ads, then adapt their hooks and scripts for your brand. Transcript: Michael Stelzner I don't even know if meta. Yeah. What are your thoughts on this? Sam Palero So the Andromeda algorithm doesn't need more creative, right? All it needs is creatives that are good and it's better at matching those creatives. The reason why everybody says more, more, more, more, more is because inevitably your hit rate on creative is not that high. Most people's hit rates are not that good. Anyone claiming they have an incredible hit rate, good on you. Just keep making the ads that hit. For most of us, doing things more eliminates the possibility of not getting that hit, not getting that good ad. And when I say hit, I generally mean an ad that performs above your target rise and has the capability to take 10% or more of your total ad spend. That's a hit by my book. So we want to manufacture hits. ([Time 0:21:58](https://share.snipd.com/snip/29191f1b-65a9-4064-b8d5-5a861c2dec75)) - **Use Semi Professional UGC From Micro Influencers** - Prefer semi-professional UGC from micro-influencers using brand scripts for high ROI. - Pay $200–$1,000 for creators who produce reels with your key phrases, then let them add authenticity. Transcript: Sam Palero All could definitely work. The thing that we're seeing work the best right now is semi-professional user-generated content. So really good scripts that are sent to UGC influencers, like people who make content for a living. We're looking at micro-influencers. They could have somewhere around 1,000 to 20,000 followers on Instagram, for example, but they know how to produce reels. You'll get outsized returns when you do work with bigger influencers because they're better at making content. But for a couple hundred bucks, 500 bucks, thousand bucks, you could work with a moderate influencer and get a package from them. Your job as the brand, at least how I see it, is to tell them your key points and scripts, like exactly key phrases they should use and let them color the rest. They're a content creator, you're paying them not to say your word by word, but to fill in the gaps of what your product needs to be shared or what needs to be shared about your product. And then their unique experience with your product or service as well. That I think is the hot, the hot thing right now. ([Time 0:24:50](https://share.snipd.com/snip/267ae7ed-1133-414a-80fd-59b0262466cd)) - **Extend Winners With Close Iterations** - Iterations of a winning creative extend its life more than constantly different creatives. - Repeat successful hooks with small changes: different headlines, clothes, influencers, or product shots to sustain performance. Transcript: Sam Palero Thing I just want to put in here is that iterations are not dead. A lot of people have this misconception, I believe right now, that iterations, ad iterations are not doable. Explain what you mean by that, just so everybody understands. People think creative diversity is needed, meaning every ad needs to look completely different. We've been kind of told this in the Andromeda era by Facebook that, hey, you need to have different creative. But really what we have seen, I don't want to argue with Facebook, what we have seen is that creating similar iterations of ads, meaning very similar videos or very similar images of High performing ads that it extends the life of the ad unit. So if you made like one image that was a shot of me going like this, right? Thumbs up and put a headline on that image. If that was my best ad, the first thing I should do is make a second one exactly like that with a slight different change to it. Michael Stelzner Different setting, different change of clothes, that kind of stuff. Sam Palero Yeah. I think like different headlines, different change of clothes, different product potentially on me. If I was selling this hat that's on my head right now, changing the hat would be a completely different unit that I'm selling. But we know that something about that image works or video, right? We know maybe a hook works really well. Something we do all the time is we repeat the exact same hook in a different ad and change the body or we keep the body and change the hook. Or a different influencer, same script. Or different influencers saying something extremely similar. Yep. Those are all iterations that I think people forget how critical they are. They work really well. ([Time 0:26:10](https://share.snipd.com/snip/b2b5daa2-9572-4fb9-9b36-63c48f82a07c)) - **Weekend Performance Pattern At BarkBox** - Sam noticed BarkBox consistently performed better on weekends after weeks of "great weekends." - That pattern revealed consumer behavior shapes like weekends for pets, which the team used to reallocate spend for higher returns. Transcript: Sam Palero So I'll tell a quick story here, if you don't mind. During my days at BarkBox, every single day, I would walk into this office, beautiful office in the city, tons of dogs running around. And I'd walk into the office. On Monday mornings, I'd say to my team, wow, guys, great weekend. Again, wow, guys, great weekend, great weekend, great weekend. About eight weeks went by somewhere around that. And I think the coffee just hit a little bit better that day. Michael Stelzner Explain what you mean by great weekend because everybody listening doesn't know what you mean by that. I'm sorry. Sam Palero Performance was great every weekend. Yeah. We would walk in, we were above our target. We made a ton of money on the weekend. Long story short. I'd come in and we were very accountable to our specific goals. And I just kept saying great weekend in the sense of we were killing it from a business perspective, not from a, I had a great weekend perspective. After a few weeks of this or really like two months of this, sadly, I was like, oh my gosh, it's a trend. And I wish I had identified this as probably my biggest win and loss at the same time for how long it took me to realize this. What we realized that consumer behavior changed for that brand on the weekends. We were able to spend way more money and drive way more revenue on the weekends compared to the weekdays for that business. And some things stick with you, this stuck with me a lot. And as we started to work with more and more brands at the Moonlighters, we realized that this was very common for most businesses. Most businesses have a shape. They have something about them that is not just unique to their individual business, but often shared with their category. ([Time 0:27:50](https://share.snipd.com/snip/e8e077f2-b7e0-41e2-97c5-d4c7e9f3ea05)) - **Deep Dive Breakdowns Over Long Windows** - Run deep-dive breakdowns over 90–180 days, exclude outliers like Black Friday, and check placements, age, gender, and day-of-week. - Use 20–30% variance or conversion-rate shifts as signals to reallocate spend. Transcript: Sam Palero We're always just looking at the historical data. And what we tend to see is that certain days or groupings of days of the week perform better than others, but we all spend the same amount of money on our ads every single day. If you ask nine out of 10 advertisers how much they're spending, they'll tell you either the full month amount or they'll tell you the amount they're spending per day. They'll say, we spent about a thousand dollars a day. We spent around $10,000 a day. Very rarely will someone say, we spend around a thousand Monday through Friday and Saturday we spend around two. Right. But if you ask old school marketers, like you, Michael, you've been in this game, right? You get, I can guarantee you day parted stuff back in the day. Cause I did. Oh yeah. I day parted all the time. And then it just disappeared. Michael Stelzner We even time parted too, because we realized that certain times of the day were better. Sam Palero Yeah, exactly. And that's, I won't, I won't get to that, but we do push some accounts halfway through the day that, that need an afternoon boost. But what we've realized is that just spending more money on better performing days of the week can lead to massive efficiencies. In the overall business. And there's a lot of volume available instead of continuing to do the same dollar amount every single day. Michael Stelzner Well, and real quick, before we go too much deeper, folks, these things that Sam is talking about are probably human behavior things. And this is like not necessarily true for all brands, right? Like a Saturday and Sunday might work for pets, but it's probably not going to work for other kinds of categories. And I would imagine where you're going with this, Sam, is this is highly dependent upon each particular company and their products, right? Certainly. Certainly. Sam Palero We try to break this down. We call it the fastest horse. You would never go to a horse race and bet on every single horse, right? And this philosophy, it doesn't necessarily mean that everyone's going to go in here and look at their day of week analysis and immediately find a win. Some people will. But if you just take this mindset and apply it to every breakdown, like your placement analysis. So being able to look at like, am I running better on feeds versus reels versus stories? Right. Same on Google. Am I running better on YouTube versus discovery versus versus search? Where's my Pmax spend going? Things like that. See the same thing on age. See the same thing on gender. Right. We just want to make sure that most of the spend is going to the highest performing places. And then we can place in either value rules or straight up exclusions if things are not working as well. We tend to attribute around 20% improvements in efficiencies, meaning 20% improvement in ROAS or 20% reduction in cost per acquisition from this section of our process. ([Time 0:29:52](https://share.snipd.com/snip/18e3a2ce-605a-40c7-bef8-d51fc45bacb7)) - **Reallocate Spend Toward Profitability Goal** - Reallocate budget toward channels/days that reach your profitability goal, even if ROAS drops, as long as it stays above your king goal. - Avoid running channels below your required return; instead reduce spend until they reach target. Transcript: Michael Stelzner Okay. I got a couple of thoughts on this. What if we didn't want to spend more money, but we wanted to stop spending money on the low performing days and reallocate that budget to the high performing days just so we can get a higher Return on the same ad spend. Is that even an option? Sam Palero I mean, of course it's an option. There's two caveats with that, two issues with that. First is the simple issue of you might not have the funnel sustained properly. We'll just keep using the weekends or better example. If you just eliminated Monday through Thursday, then your Friday, Saturday, Sunday just might not convert as well anymore because there was possibly impressions that were just taking Time to convert. Michael Stelzner What about just lowering those budgets instead of eliminating them? Sam Palero Just like every ad or every ad account or every day, you just want each unit to be profitable. So you would not run Google Ads at a, let's say your business needs a two to be profitable, two row ads to be profitable, and your goal is 2.2. You would not run Google Ads at a 0.5 return on ad spend and run Meta at a 4 return on ad spend. No, you would reduce the spend on Google until it gets to the two or try to find efficiencies in the platform until it gets to the two that you need. And you'd probably keep spending more and more and more on meta to get as much profit out of it, even if the rise dropped from a four to a three to a 2.2, as long as it's above your goal. The way that I think about this simply is that you want to spend as much into your goal as possible, because then again, you're acquiring as many customers as possible that are going to Come back over and over and over again, assuming you have a good product. ([Time 0:37:22](https://share.snipd.com/snip/f75298c0-5ea6-422e-9720-5928b1cc450c)) - **Scale With Vertical Horizontal And Twin Engine** - Scale using three levers: vertical (increase spend 10–30% at a time), horizontal (campaigns for promos), and a twin engine combining both. - Inject iterations of hits while vertically scaling to keep ROAS stable. Transcript: Michael Stelzner Scale. And we've talked about this a little bit, but I'm assuming we've set some of this in motion, but let's talk some more about this. Sam Palero A hundred percent we have. And that's kind of why I said at the beginning, like some of these intertwine. Scale is the most simple and most complicated at the same time because it relies on the condition that things are going well. You don't scale into a poor return on ad spend. You don't scale into a dysfunctional business. You scale into the good times and you strike while the iron's really hot. We think of scaling in three ways. First, there is vertical scaling. This is really simple. Everybody knows this, even if you don't know the terminology for it. This is literally when you just increase your spend. You take your existing campaign and you increase spend on it because it's working. Michael Stelzner How much can you increase the spend in any given season without it creating any problems? So I am not a big fan of the learning phase. Sam Palero I think it's a little bit of baloney, but that's maybe another conversation. I like to think of things in triggers of anywhere from 10 30% most of the time. Michael Stelzner Okay. Sam Palero 30% is the upper threshold and 10% would be my bottom threshold. Michael Stelzner Over what period of time? Like a week? That would be a single day change. Okay. Sam Palero And I would generally not make another adjustment for probably two to three days. Okay. Unless you're a business that has a very short time to purchase. Michael Stelzner Like you've got an event coming up or something, right? Sam Palero Like you got an event to come up or if you're like selling something, like if you're selling phone cases, right? If you sell phone cases, they're probably like $25 average order value. That's probably one day in post purchases. You don't need a seven day window to consider if you're doing well. Michael Stelzner Right. Okay. Sam Palero Second piece is horizontal scaling. Most people know this is like duplicating campaigns or building more systems throughout. We don't like to have very cluttered ad accounts these days, but in 90% of cases, the horizontal scaling that we use is from sale events or anything connected to a promotion. This would be a really easy time to just create a new campaign, give it its own budget. It's maybe only going to run for three days, seven days, 10 days. And then when it's over, it's over. Michael Stelzner This keeps nice separation. It doesn't mess too much algorithmically with things. Is that worth it for an experiment too? I mean, is that worth it for experimental creative as well? Or do you not recommend that? Sam Palero I don't do that. I like to have most of my, almost all experimental creative inside of the prospecting CBO. Because if it works, Facebook's quickly going to distribute budget to that experiment. Okay. So we could actually just test better from letting the algorithm breathe a little bit and setting maybe a minimum budget on that instead of forcing so much cash to it. Last part of this is just called, we call it the twin engine for scaling. This is when you take vertical and you take horizontal and you put it together. So what that really looks like is you are increasing the spend at the same time that you are pulling apart your creatives inside of that prospecting CBO campaign. When I say pulling apart, it's like duplicating, iterating, building more of what's working. Just like we talked about iterations before. One of the things that we're looking to do all the time is whatever ad is working in the account, that's a hit 10% of the total account spend and above our target, create iterations of that Ad again and again and again. We then inject those into the account. And at the same time, as long as we're over target, we're increasing vertically with spend. ([Time 0:39:52](https://share.snipd.com/snip/82d927b9-b605-4a6a-a32d-a8779a58330f)) - **Set One King Goal For Decision Making** - Choose one king goal (e.g., CAC or ROAS) and prioritize it above proxy metrics to avoid noisy decisions. - Use that single efficiency metric to evaluate overall health and ignore other distracting KPIs. Transcript: Sam Palero My favorite. It's my favorite. Back to BarkBox. It always comes back to BarkBox. We had this saying, it was called CAC. So C-A cost per acquisition, is king. CAC is king. And this stuck with me so much. I think every business should have one goal that is the most important goal for themselves. This means that if you think you need CPCs to be something, CPMs to be something, add to carts to be something, whatever, the only thing you need to come back to is this one king goal. It's usually an efficiency metric. Let's say again, it's ROAS of two. If your ROAS is two, what this should mean for your business, if this is your king efficiency metric or king goal, is that even if all those other things I just named are so off, as long as We're over that ROAS target or right at that ROAS target, thumbs up, we're looking good. Shut out the noise, focus on the one thing that really matters. Those are all proxy metrics to the one thing. ([Time 0:43:36](https://share.snipd.com/snip/d0bc15d6-27ad-467a-aa6f-644ad3c089ab))