I have an eCommerce company, and I’m running my own Facebook ads. How do I know how much to bid in order to drive the highest returns?

We recommend focusing on CPA, cost per acquisition (or as Facebook calls it, oCPM- optimized Cost Per Mille), to start. Because CPA is derived from users who have not only seen (CPM) or clicked (CPC) an ad but also completed a purchase, it is the most efficient metric for getting results on ad spend for eCommerce companies. When using CPA for your bidding strategy, Facebook will focus its bidding to show ads to those people who will most likely complete a purchase, as opposed to most likely to simply see the ad or click the ad.

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What really sets Facebook’s ad platform apart from that of traditional display ad retargeting models is the fact that it allows you to segment toward different CPA objectives based on the behavioral cohort. There is rarely a case to be made for using the same experience to target both prospects and customers. A prospect, new to your website and unfamiliar with your products, will be tougher to convince to make a purchase than a returning customer who already knows and loves what you’re offering. Furthermore, encouraging a user to make a first purchase on your website isn’t easy with up to 90% of prospects abandoning, even after they’ve added to cart. Most companies spend more dollars turning prospects into customers, as once a user makes a first purchase, it becomes easier to convince them to make additional purchases.

Here are 2 examples – each walking through the segmentation and unique CPA objectives for each eCommerce type:

Check out our guide on Facebook Advertising to learn how you can unlock the most value from your Facebook ads: A Marketer’s Guide to Facebook Advertising – Designed for eCommerce..