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11.78X return on ad spend using a simple 3-step funnel: here’s how we did it

BONUS MATERIAL: Free Facebook ad copy template to adapt to your campaign (worth $120!)

We’ll show you exactly how we get consistent results like this for our clients without using unnecessarily complicated marketing strategies.

How to simplify your marketing funnel

We’re going to show you exactly how Funsquare saw an 11.78X return on ad spend without getting overly technical or complicated because (let’s face it) we can’t outsmart the algorithm anyway.

We used a simple 3-step funnel setup that let the algorithm do its thing as much as possible while still maintaining enough control to ensure we weren’t blowing budget to no avail.

If you’re sick of spending hours each day turning ads on and off, testing audience after audience, switching from CBO to ABO and back again, we’ll show you how to spend way less time in your ad account and still get results as good as these for your business.

Read on to find out how we turned things around for Funsquare and set up your own 3-step funnel along the way.

Or if the thought of DIYing this all seems a bit much, read the example then get started with us so we can set it up, optimise and manage it all for you.

How to find your audience

If you’re showing your ads to the wrong people then what’s the point? Nailing audience targeting is essential for a healthy account.

Once you find your ideal top of funnel audience, the lower levels of your funnel will perform well effortlessly. To start with, test both a lookalike and an interest audience. If your budget is on the smaller side (anything under $250 a day), keep them both in the same campaign and run it as a CBO (campaign budget optimisation) to let Facebook decide which audience deserves more budget.

Okay… so what type of lookalike and interests should you be targeting? Funsquare were brand-spanking-new when they came to us, so we had to build from the ground up. That meant, when it came to creating a TOF lookalike audience, there was nothing to create a lookalike from. So we ran a giveaway to grow their email list and created a 5% lookalike from it. 

The results? See for yourself…

Why not just run a broad audience? Because, as a fresh account, Funsquare had no purchase data for the algorithm to work with so it wouldn’t have a clue which users have the highest purchase intent when it comes to their product.

But you can’t just rely on a lookalike audience either because when you do have a smaller budget and not much data, a lookalike audience may not stay consistent.

The best way to tackle this?

Run one (or more depending on budget size) interest bundle audience. For Funsquare, we ran a “parenting” interest bundle targeting women only, in a CBO with our lookalike audience. Take a look at the interests we targeted…

And the results… 12.02 X return on ad spend.

We generally find that interest audiences are more scalable than lookalike audiences. If this parenting interest bundle slows, we’ll test a new bundle targeting a different set of interests that we think align with the brand and switch it over.

The point is, you want to diversify your TOF audiences and never rely on lookalikes or interests alone because, in doing so, you’re putting all your eggs in one basket. 

Once you’ve found the ultimate TOF audiences for your account, you’ll notice more and more purchases trickle through at the middle and bottom of the funnel.

How to set up your 3-step funnel strategy

A simple overview:


Now that you’ve chosen your top of funnel audiences, create a TOF CBO campaign and allocate 70% of your budget to it. Now, at the ad set level, create your lookalike ad set and your interest bundle ad set, being sure to exclude your warm audience and past purchasers


For middle of funnel, create a second CBO campaign and allocate 20% of the budget to it. We generally make two ads sets again: a website traffic audience and a Facebook & Instagram engagers audience. As a general rule, we only target users who visit the site or engage on social media within the last 30 days because we find that, outside of this timeframe, the audience essentially becomes cold again.


Lastly create your bottom of funnel campaign and, you guessed it, allocate the remaining 10% of the budget here. If you’re working with a smaller budget, only run one ad set at BOF, combining your add to cart and initiate checkout audiences. But if you do have the luxury of a bigger budget, you can split these out into their own ad sets.

It’s as simple as that.

This 3-step funnel is designed to let the algorithm work its magic (or as some tend to call it, science). By opting for CBO over ABO, you’re letting Facebook decide which ad sets will perform (or are performing) better and give them more budget.

But we’d be lying if we said there wasn’t more to it than that…

Let’s not forget about managing, optimising and testing, not to mention creating the ads themselves.

Bonus #1:

How to create ads that convert without having to write them yourself

While the right targeting and funnel set up are crucial to account performance, it doesn’t mean you can show your audience subpar ads and expect them to convert.

If you need someone to write ad copy that really nails your audience’s pain points and sells your product, head over to Your Ads on Demand.

Click the red “Order Now” button, select ‘Ad Copy’ and put your details in the Campaign Brief after payment.

Bonus #2 - Free Facebook ad copy template:

Facebook ad copy template to adapt for your campaign

What ad copy you use is going to depend heavily on your product or service, of course.

For instance, take a look at this TOF ad copy we wrote for Funsquare on the right.

But you might like to start with something more generic so you can adapt it easily, like this.

How to manage & optimise the account

You’ve set up your 3-step funnel and sent your A+ ads live, now you need to keep an eye on performance and optimise the account accordingly.

That means, knowing how to understand the data and determine where there might be a kink in the funnel.

You need to check the account every day to make sure you’re switching off any ads or audiences that are burning through cash without making sales. But optimising your campaigns goes beyond simply this…

Firstly, it’s important to give your ads a few days to run before switching them off. It takes time to test them out and collect enough data before making a call on whether they’re working or not. There’s nothing worse than switching off an ad too early only to see delayed attribution come through and realise it was doing well after all.

When deciding what to turn off and where to increase budgets, you need to look at more than revenue and ROAS alone. 

What if, say, an ad has a 4% click-through-rate and 20 add to carts but no sales? In this case, people are probably dropping off because shipping costs are too high or they need a 10% off your first purchase code to get them over the line. But if you don’t want to offer these, then you’ll want to consider changing your targeting so you’re attracting an audience that’s willing to pay shipping costs for your product. 

What we’re saying here is, you need to look at all the data if you want to manage and optimise your account as accurately as possible.

This can be pretty overwhelming of course. If you’d rather we took it off your hands and managed your account for you, get in contact here.

How to test new ads and audiences

Just because something’s working now, doesn’t mean it’ll keep working.

A small percentage of your budget should always be allocated to testing new ads and audiences. It’s here that ad set optimisation (ABO) comes in handy.

Don’t test new audiences and new ads at the same time. For example, if you want to test two new interest audiences, create them in the same campaign using ABO, give them the same budget so the test is fair (this can be as little as $5 each) and run them with your best-performing

Let the test run for a few days and if you find a winner, move it to your TOF CBO and give it some budget. 

Similarly, you should always test new ads in your best-performing audiences and see if they convert there.

Tip: run new TOF ads to your BOF audience and past purchasers for a couple of days to build engagement before sending it live at TOF.

Your turn

Facebook marketing is one of the most effective ways to reach a cold audience and draw them into your ecosystem.

If you’re not advertising on Facebook, we hate to say it, but you’re missing out on a pretty great opportunity to grow your brand into something magnificent.

And if you are, then you’re probably still reading this article because you’re not happy with your results. Now’s the time to fix that.

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