Our DTC Facebook Ads Growth Hack
How we are helping growing brands profitably scale their Facebook Ads by hacking Facebook's Estimated Action Rate metric.
Scaling your Facebook ads is extremely difficult due to the chicken-and-egg problem that comes with paid acquisition. Specifically: you can't lower your CPA without exiting the learning phase by hitting 50 conversions per adset per week consistently. However, in order to achieve that level of scale, you need to see low enough CPAs to make it possible for your business.
At Flighted, while there is no silver bullet "growth hack" for Facebook ads, we have identified a strange but effective strategy to help advertisers break out of this “messy middle”, get the week-over-week stability that they need, and lower their overall CPC/CPA as a result of this stability. In each case, we've seen CPAs remain 20%+ lower with a sustained increased in conversion rate as well. Here’s how we're "growth hacking" Facebook ads in 2023:
The main theory behind the strategy is the importance of Facebook's Estimated Action Rate in winning the ad auction. The more likely Facebook thinks a user is to take an action on your ad, the higher the Estimated Action Rate they assign you in the auction. This comes directly from Facebook’s internal description of auction dynamics:
Two of the most important factors in improving Estimated Action Rate are 1) data signal volume - are you consistently driving a high # of conversions? Are you staying in the 50 conversion per adset per week range? And 2) conversion rate - are your ads leading to your desired outcome? The biggest mistake advertisers make is underweighting the importance of these 2 factors. They over-optimize and over-iterate, spreading their budget across different ads/adsets that continuously dip into the learning phase.
How do you overcome this cycle of struggle? The key is to "hack" your way into being a bigger fish than you actually are. First, run a sustained sale for 1-2 weeks. This can't be something small that won't meaningfully improve your conversion rate. This should be at least a 20% discount. From there, increase your prospecting budget by AT LEAST 25% over the course of 2 days. Switch your bid method to cost cap and dial it in over the first few days of the sale to ensure you're spending close to full budget. After that, do nothing - that’s right, absolutely nothing - for the rest of the duration of the sale.
The key is to sustain this for at least a week, ideally 2. There is a good chance that performance during early on will be breakeven or even lose money for your business. You must fight through this and continue to spend at that volume level for a sustained period of time. Eventually, you should start to see your CPC as well as your CPA trend downward and improve well beyond the baseline CPA you had before testing this strategy. At this point you can end your sale and reduce budgets to a level you feel comfortable with!
Pre-iOS 14, after a sale period like this you'd likely see post-sale fatigue and a massive increase in CPA after ending the sale. For whatever reason, however, trying this now is consistently leading to sustained decreases in CPA, even after the sale has ended. Our theory is that this breaks you out of whatever EAR threshold your ad account is stuck in and "tricks" Facebook into assigning you a higher EAR that persists after the end of your sale. After a few weeks, you have the EAR of an account twice your size.
Caveat as always that this is anecdotal, applies mainly to SMBs, and almost certainly won't work for every business! If you think this test might be right for your business, give it a try and drop us a line letting us know how it goes.