A complete guide on how to scale B2B/B2C SaaS with Facebook Ads profitably.

I spent over $6,000,000, over 4.5 years, and 100 hours to write a complete guide on how to scale B2B/B2C SaaS with Facebook Ads profitably. 

This has the potential To Scale Businesses To $500k+ p/m.

It includes: 

- Everything you need to know about Facebook ads from 0 to 1.

- Simple testing strategy

- Best creative types/offers

- Chatgpt prompts 

This guide is worth $1500 minimum

It’s Yours For FREE today.

This guide contains 10 sections:
1. 

Section 1: Customer and Competitor Research

If you've already achieved a product-market fit and have had success with any cold traffic channels, you can skip this section. However, for those who haven't, understanding your market, positioning your product, and crafting a compelling offer are essential first steps.

Why Research is Essential

Before you can uniquely position yourself with a winning offer, you need to understand the pain points / desired outcomes of your ICP(ideal customer profile). You also need to grasp your competitive landscape thoroughly to position yourself as the best solution or just “make your product sound unique”.

How to Research Your Competitors

• Go through competitor websites and, if possible, participate in their demo calls. This will give you an in-depth understanding of what they offer.

• Ad Strategy Analysis: Utilize transparency tools like Google's and Facebook's Ad Library to see what kinds of ads your competitors are running.

• Review Mining: Look for both positive and negative reviews on Capterra & G2. Filter for 1-2 star reviews and find all negative points you can turn against your prospects. This is super useful for saturated markets where you have competitors. 

How to Research Your ICP

• Browse LinkedIn, Facebook groups, Reddit, YouTube, and Twitter to understand their pains and the words your customers use to describe their pain points.

• Customer Interviews: Conduct one-on-one interviews to explore questions like:

  • Where do they see the ROI of your offer?

  • What motivates them in their role?

  • Why did they choose your solution over others?

• If you have a lot of users and want to do it at scale: send them a survey.

• ChatGPT prompt to find out your ICP:

Assessing Market Awareness

• If the Market is Aware of their problems & available solutions: You need a stronger offer or a different positioning to stand out.

• If the Market is Unaware: You have the opportunity to educate them and introduce your solution as the best option to solve their problems.

Section 2. Optimizing Your Offer & Positioning

Assessing Market Awareness

• If the Market is Aware: You need a stronger offer to stand out.

• If the Market is Unaware: You have the opportunity to educate them and introduce your solution as the game-changer.

Hormozi’s Value Equation

Use Hormozi's value equation to make your offer irresistibly compelling. This involves increasing the perceived value and likelihood of achieving the desired outcome while reducing the effort and time needed from the customer's end. Utilize case studies to increase the perceived likelihood of success and offer guarantees or free trials to decrease risk. Use specific

Niche Focus to Beat the Competition

If you're starting out in an established market, and your competitors cater to broader markets, consider niching down. For example, Basecamp initially served only small teams, which allowed them to stand out.

Positioning

From your customer research, you should know what your market is dissatisfied with in the existing solutions so you can position your product/service as a solution to that dissatisfaction. Here’s an email example of that:

https://docs.google.com/document/d/17C2iOHY1N1CeL66WJeMbpA-ys6NpQs4aV_HH6SuURNs/edit

The highest lever you can pull is always the offer. An offer is a solution to someone’s problem. It bridges the gap between the present(pain) and the desired future of a prospect(no pain).

If you have existing historical data on your product's performance, analyze it. The important thing here is to find a strong offer. Most of the time, the strongest offer will be your bestsellers already. It is also possible some products have benefits you are unaware of. Make sure you have all the benefits of your products listed.

The other part is LTV. What product can get you the highest customer lifetime value? What product can you sell to acquire customers and then upsell them other products?

If you don’t have any historical data, it’s okay. Keep reading, and once you’re done with the research part, all the puzzle pieces will come together!

P.S. The best offers I have found that work extremely well with Facebook ads, Instagram Ads, and Tiktok Ads are highly unique.

3. How to Create a Facebook Advertising Strategy

3.1. How to Analyze the Offers and Find the Highest Potential Ones

To be successful at advertising, you need to understand the audience. And that means understanding their:

• Pain points. Their current situation, why it’s painful, and where they want to be.

• Where do they spend their time? Maybe Facebook is not the best option to target them.

• Stage of awareness of your product so you can tailor your message.

• Their language so you can write copy.

• Their interests and life events so you can target them better.

I am going to touch on stages of awareness here, but over time I found that the most successful businesses were those that could bring a new solution to the problem-aware market. Their customers had a problem, they tried some solutions, but they were ineffective. And their offer was not just 2x better but at least 10x better in terms of price, functionality, ease of use, or speed of getting the desired result.

Here are the 5 main stages of awareness:

• Unaware - don't even realize they have a problem.

• Problem Unaware - not aware that they even have a problem.

• Problem Aware - realize they have a problem but are not aware of solutions to solve it. Maybe they don’t realize the seriousness of their problem.

• Solution Aware - aware of the problem, and they’re researching and discovering solutions.

• Product Aware - aware of your product but not ready to buy yet. Maybe they don’t understand the value of your offer, or it’s not a good time. Most Aware - almost ready to buy, but something needs to push them to buy.

Sometimes you might not know you have a problem and how amazing a solution to that problem would look like. That’s why it’s not the best practice to ask your customers about a solution they want. They might just want “a faster horse” than a car.

3.2. How to Research Your Target Audience to Make Your Facebook Ads Campaign Successful

So you found offers with the highest potential for success, and you feel like you understand the target audience enough. You need to read this part if you have at least one competitor with a similar product that solves the same problem.

Think of it from a customer journey. When prospects are in the problem-aware or solution-aware stage. They will likely research and compare solutions. To win, your offer has to be compelling enough and stand out.

Suppose you can’t make your product one order of magnitude better. In that case, there are a few things you still can do to differentiate:

• Find how your product is different already and make sure to highlight it in your ads, product description, emails, etc.

• If you or your competitors are not offering risk-free trials or guarantees, offer it!

• Use fewer discounts/sketchy pushy techniques. Discounts often cut into your margins and decrease the value of your brand. Offer discounts only for a special occasion or as a win-back opportunity for people who just can’t afford your solutions or are always discount hunting. Instead of discounting, you can offer an add-on product for free. Free is always better than a discount!

• A/B Test substantially increasing your prices compared to your competitor. Studies have proven that higher prices lead to higher perceived value. All things being equal, people will perceive your product as of higher quality. You might lose some customers, but ultimately, profits are all it matters. You’ll be surprised how many people will pay 2-3 times higher price just because it’s more expensive.

• Ultimately, focus on your customers and their experience, not the competitors. It’s important to have a better offer than your competitor but ultimately, thinking about the customer is what you want.

3.3. How to Research Your Competitors to Improve Your Offer

It’s not a bad idea to start with something that already works for others if they are targeting the same audience, especially if they have already spent a lot of resources on testing. Don’t just copy their ads. You need to be different, so if you’re targeting a solution-aware audience, highlight different things and add your own unique spin to it!

There is a free and paid version to find what ads your competitors are running.

Free

• Facebook Library

Paid

• There are a few options on the market. I can’t recommend any as I haven’t done the research. Just search on google for “Ad spy Facebook Ads.”

3.5. Six Steps You Can Take To Ensure the Best Facebook Ads Performance.

For simplicity, I am going to break down this section into 5 steps.

3.6.1. Define the Goal You Want To Achieve With Facebook Ads.

• Maxime profits

• Profitable growth

• Growth at a short-term loss with future prospects of getting to profitability.

3.6. How to Create a Facebook Campaign Testing Roadmap?

The way you calculate it will be unique to each business. In e-commerce, you would typically use gross profit per average order as your optimization metric. You wouldn't use net profit because there are a lot of things you can’t control, like overhead. But more importantly, if you can get enough scale and substantially increase gross profit, you would most likely have net profits increased too, because of economies of scale. If your losses scale when you scale your revenue, most likely, you need to take care of that side of the business first before advertising.

Here’s an advanced formula to calculate CAC or CPA or Cost Per Purchase you can afford to acquire one customer for your offer:

• If you’re offering some sort of free shipping:

  • Breakeven CAC = AOV - (AOV*Shipping cost in % adjusted for customers paying for shipping) - (AOV*Payment gateway processing fees %) - (Average cost of return Refund rate %) - (AOVAverage sales tax per order %) - Average COGS per order.

• I would suggest you not overcomplicate and go with a simpler formula initially:

  • Breakeven CAC = AOV - COGS

But it’s not all that simple. To get even more accurate, you also need to adjust your metrics for 30-day delayed and misattributed conversions.

If you have no advertising data, skip the next two steps for now.

3.6.2. Define Your Metrics. How Much Can You Pay to Acquire One Customer?

You can get an idea of how long it takes customers to purchase from your post-purchase survey. It’s not perfect, but it’s one extra data point. I like to ask first-time customers how long it took them to order since the first time they learned about the product/brand.

Facebook is only able to track conversions that happened within 7 days, so you need to find out the percentage of customers that purchase in a 7-30 day window after first learning about your brand from paid media. Let’s say it’s 30% of customers. In this case, you would get your Breakeven CAC and multiply it by 1.3 to get get the adjusted metric.

3.6.3. Adjust Your Breakeven CAC for Delayed Attribution

You can use attribution software like Triple Whale and Northbeam to get better data. However, there’s no perfect attribution solution, and each of them will still miss, mostly view-through conversions.

To help you get more data, use post-purchase surveys to decipher how much Facebook(or your attribution software) is misattributing revenue/conversions, and adjust your Breakeven CAC metric accordingly.

Here’s how to do it step by step:

1. Set up a post-purchase survey. I used Fairing. It’s not perfect, so feel free to explore other solutions

2. Ask, “How did you FIRST learn about us?”. List all the paid and unpaid channels you have as options. For channels like Facebook, YouTube, Instagram, and Tiktok, make sure to include follow-up questions, and list options like your brand’s page and influencers you’re partnering with.

3. Always add an open-ended question, “Other.”

4. Wait until you get at least 60 submissions and two weeks to collect the data. Keep in mind that the data you’ve been collecting could be dating to the last 12 months or more, and there’s no good way to segment it in Fairing.

5. Once you collect enough data, put the revenue data into a spreadsheet column by channel.

6. In another column, get the events data from your attribution software or Facebook ads manager in a different column for the timeframe you had your post-purchase survey.

7. Divide your post-purchase survey revenue for each channel by the post-purchase survey response % rate. Divide Facebook Ads post-purchase survey based on modeled revenue by Facebook ads manager tracked revenue(or event date tracked revenue attributed to Facebook in your attribution software).

8. You should get multiplayer. Multiply your CAC by it.

9. This method has inherent flaws you need to consider:

   1. It would work well for businesses with a short sales cycle/conversion window where people can remember the first touch point.

   2. We’re assuming that collectively people that haven’t answered the survey are the same as the ones who did.

   3. We’re relying on fallible human memory.

Things you can test to increase the response rate and improve the quality of data:

• Mention that survey is going to take <2 minutes

• Implement a giveaway of a free product or gift card for people who complete the survey

• Offer a discount for people who complete the survey

• Mention how many people are completing the survey. Test this if the majority of people complete them.

3.6.4. How to Adjust Your Breakeven CAC Metric for Misattributed Conversions

If you properly did the research part, this part is going to be easy.

Essentially, here we will outline what we will be testing in the next 4-8 weeks, depending on your budget, the number of offers, and advertising performance.

The overarching principle is to test impactful and significantly different things first.

Ensure the landing page you’re sending people to is highly relevant to the offer and the messaging you’re advertising. If you’re testing a few different benefits that are different from each other, create a different product page for those ads.

Week 1-2. Campaigns 1-5 best offers. Usually, one campaign per offer is tailored to a specific audience with a particular pain. Here’s how one campaign would look like

• 3-5 ads with different creative types(e.g., 2 images, 1 carousel, 2 videos) with copy matching your creatives.

• 2-5 relevant large audience ad sets.

• Campaign type: ad set budget optimized. Set the budget on the ad set level.

Week 2-3. Once you know what offers work from the first batch of the campaigns, test more different creatives for the profitable offers in the new campaigns.

• 3-5 different creative ads of the winning creative type, including the winning one from the previous campaign.

• Ad sets with profitable audiences from week 1 campaigns.

• Campaign type: ad set budget optimized. Set the budget on the ad set level.

At this point, if you have profitable ads, it might make sense to set up remarketing campaigns. Set up one campaign per offer and messaging:

• Budget-optimized campaign type

• Budget:10-20% of daily spend on TOF campaign for the offer.

• 3 Audiences: add as many website events per product as possible for each ad set for the following time frames:

• last 30 days Last 30-60 days.

• Last 60-90 days.

• Add profitable ads for the offer.

Week 4-5 Launch one campaign per winning offer where you’d focus on testing different copy variations and copy lengths. (Usually, copy length matters for more expensive products where you have to explain the product or for older demographics that prefers reading over watching videos)

• 1-2 best-winning creatives.

• 3-5 significantly different copy styles. Adjust creative if necessary so all ad assets are aligned.

• 1-3 ad sets with different big proven audiences.

Week 5-6 test short-form videos(stories and reels). If your product is catered to a young audience, test this in the first two weeks.

Make sure you are only targeting stories and reels in placements.

Important variables to test next:

• Offers, if possible, come up with different offer variations to test.

• Landing pages, create new variations of landing pages to test.

• Always test new creatives. Don’t just change one change. Make sure the edits are significant, especially in the beginning. The first few seconds are often what makes a difference.

• Thumbnails for best-performing video ads.

Less important variables to test:

• Homepage vs. collection page vs. product page

• Excluding vs. including placements like audience network

• Headlines

• Descriptions

• Call to action buttons

• Location targeting. Make sure you can deliver to the location, your SMS & email marketing automation works in all of the locations as well.

• Gender & Age targeting. (Usually, broad always works better)

• Languages.

Once you verify the offer and know what works and what doesn’t, testing doesn’t end here! You must constantly have something new ready to test to avoid creative fatigue. Allocate 30% of your budget to test new creatives.

Here’s what your evergreen creative testing budget allocation could look like:

• 60-70% proven creatives

• 20% similar to the proven creatives

• 10% completely different creative variations.

Focus on testing visual creatives over copy but test and adjust copy occasionally if it makes sense. I feel like a broken clock, but it’s also important to emphasize that all of the ad assets, such as copy, headlines, visuals, descriptions, creative, call to action, and landing page, must be coherent!

Your new creative testing schedule will depend on how quickly you saturate your existing audience with new creatives. More on this later!

3.6.5. How to Create Facebook Ads Testing Roadmap

These are my personal recommended settings for top-of-the-funnel campaigns. It might change as the platform changes.

Best Facebook ads campaign level settings:

• Campaign budget at least 1x breakeven CAC per ad set. Ideally 4-5x. If you have a limited budget, start with at least a $5/ad set.

• Campaign bid strategy: Highest volume or value.

• Buying type: auction.

• Campaign objective: sales or conversions.

Best Facebook ads ad set level settings:

• Conversion event location: Website

• Conversion event: Purchase

• Optimization for ad delivery: Conversions

• Attribution setting:7 days after clicking or 1 day after viewing

• Start date: 1 AM the next day.

• Custom Audiences: Exclude 180 days purchasers and all-time purchasers audience. (You can get all time purchasers' audience by syncing with Klaviyo)

• Location: your target country.

• Placements: Advantage+ placements.(unless it’s story/reels only creative)

• Test a maximum of 5 ads in one ad set at the same time

• Target Audiences need to be big enough. Try stacking relevant interests, a broad audience, and a 10% lookalike.

• Adset_Naming_Convention_Example:TargetAudience/Interest_TargetCountry_Age_Gender_Placements

Best Facebook ads ad level settings:

• Naming conventions. Name ads in a way so you can easily filter for relevant creative assets at scale. Here’s an example: Ad number_ProductName_CreativeID_Copy_ID_HeadlineID_CallToActionButton.

• Shop ads are on

• Standard Enhancements are on

• Always make sure your copy, creative, audience, and landing page match.

• Call to action button: Shop Now for e-commerce.

• URL: product page in most cases(if you’re advertising a general product category, send people to the collection page).

• Website events: your website pixel.

• Offline events: toggle on.

• URL Parameters: If you're NOT using any tracking tools, use standard one to track Facebook ads clicks in google analytics: ?utm_source=facebook&utm_medium=paid&utm_campaign=&utm_term=&utm_content=

4. Best Facebook Ad Campaign Settings

If you did competitor research, you should have some ideas already of what works in your industry. These are some ideas you can test, but some might not make sense to you.

Before creating ads make sure you or your advertising team learn Facebook Advertising Policies.

Facebook image ad ideas:

• The result of what your product provides. Selling the future.

• A close-up picture of your product.

• Your product is in use.

• A cute baby is looking & smiling at your product.

• A picture of an average person from your target audience using your product.

• A catchy meme ad.

It’s important to include thumbnails in videos because most people don’t have their audio on. Also, add a call to action at the end of each video coupled with your branding. People sometimes need to be told what to do. And branding increases your chances of getting remembered.

Facebook video ad ideas:

• A reaction to your product’s performance.

• A mash-up of shot user-generated content coupled with a guide on how to use the product.

• A customer review of the product.

• A video from the CEO talking about the benefits of the product.

• A split-screen video of how the product is being used on the left and somebody talking about the product on the right.

5. Best Facebook Ad Ideas to Test in 2022

The Launch

The best time to launch your new ads would be between 1:00-5:00 am because Facebook needs one full day of data to better optimize for your objective.

The best day of the week to launch ads would be Monday, especially if you work Mon-Fri.

Early data collection

Depending on your offer and the price of your product, you will always have a delay between someone seeing your ad and actual conversions. The other thing is Facebook now takes up to three days to report conversion data in the ads manager. So you really can’t make fast decisions unless you’re using some sort of attribution software like Northbeam or Triple Whale.

Once you launch your ads on Monday, wait at least 3 days(7 days for smaller accounts with <~$100/day budgets, but it depends on your AOV).

Initially, check on your ads daily just to make sure they are delivering and there’s nothing wrong going on. Also, check how your website profits change based on the advertising budget.

You should have enough data three days after launch to look at your engagement metrics. Turn off ads that don’t look good based on engagement metrics and your breakeven CAC. If ads are profitable based on your breakeven CAC but have poor engagement metrics, leave them running for a few more days.

Early optimization based on engagement metrics.

If your ad account is not new, and you have had profitable or almost profitable ads historically, you can look at your historical data to get an idea of what engagement metrics look like. You can also look at the last 60 days' baseline metric per offer for the top-of-the-funnel audience.

If your ad account is new, then you can make decisions based on average engagement metrics per every offer since the first campaign launch.

Engagement metrics to look at:

• My internal correlation analysis showed that CATC(Cost per add to cart) tracked by Triple Whale pixel has the best positive correlation to CAC tracked by Triple Whale pixel.

• Thumb stop rate = 3-second video views /impressions. It’s good to see how good your video ad is in terms of grabbing attention and making people watch the first 3 seconds. To improve the thumb stop rate, work on your thumbnail and the first 3 seconds of the video.

• Unique CTR (link click-through rate)- I wouldn’t pay attention to small changes in CTR, but this is a measurement of how relevant your ad is to your audience and how good your ad is in terms of making them click now.

• Time on-site in Google Analytics. It’s useful to define the quality of visitors. I once tested Reddit ads, and the clicks were super cheap, but the time on-site was 1 second, meaning the traffic was of low quality.

• Hold rate(thru play/3 second video views) - how good is your creative at holding attention?

• Average watch time - totally depends on the video length but it's a useful metric to look at.
  Optimization based on hard metrics.

After 7 days of running the ads, you should get enough data to make decisions based on purchases. Just look at the ads collectively per campaign and kill the ones that have:

• CAC < your breakeven CAC.

• 0 sales & engagement metrics are worse than the baseline. Sometimes you might want to keep ads running a bit longer if CAC is close to your target/breakeven CAC.

Weekly to-dos:

• Increase ad spent by 20% across profitable top-of-the-funnel ad sets/campaigns 2x/week. Add profitable ads across campaigns and ad sets for the same offer.

• Decrease ad spend by 20% /kill offers/ campaigns with unprofitable ads and poor engagement metrics.

• Check audience overlap on the ad set level. If performance is tanking, consolidate some ad sets if it’s over 30% between ad sets.

• Check your first-time impression ratio on the ad set level using Inspect option.The performance will drop when you see the first-time impression ratio going down below 70% for more than 3 days. Make sure you launch new ads with different creatives in that ad set.

• Check the frequency metric for each offer for top-of-the-funnel campaigns in the last 3 & 2 weeks.

6. How To Optimize Your Facebook Ads Campaigns for Profitability?

On frequency.

There are studies showing that 5x frequency over the last 3 weeks increased the chances of purchase intent.

There are older studies that show that 2x frequency in the last 14 days shows increased purchase intent as well.

The important part about frequency is that there's a point of diminishing returns to it. Increasing advertising spending to increase frequency will get you to the point where you get more sales from the same audience you reach but with decreased profits.

Lower ad frequency is not bad; it means you’ll likely have more room to increase your budget, and it will benefit the performance if your ads are already profitable.

If you have a higher frequency than recommended, it’s not a bad thing, either. But if you show the same ad to the same people repeatedly, they will not interact with them as much, leading to a worse signal to Facebook and potentially harming you in the Facebook auction. This could increase your advertising cost.

So how do you deal with increased frequency? Launch new creatives, and test different ad angles to increase the chances of your audience engaging with your ads. Make your ads entertaining.

You can also test using bid control because it can cap your advertising cost. The downside to this is lower delivery and lower reach. You also need some existing conversion data in your campaigns to successfully implement a cost cap bid.

Monthly to-dos:

• Refresh your baseline metrics sheet. Especially important for businesses with a seasonality aspect.

• Do an account analysis to spot trends/common characteristics between audiences/ads/creatives.

• See if it makes sense to change the strategy. Maybe there’s a new offer that makes sense to test?

Depending on budget and number of products. Usually, do fewer campaigns for smaller accounts.

1-2 ABO Top-of-the-funnel campaigns per offer and messaging(80% of budget). Target:

• Not aware of your product/problem/solution. Make sure audiences are big enough to scale and relevant for your messaging & offers.

1 CBO middle-of-the-funnel campaign targeting per offer and messaging (10% of budget). Target:

• On-platform(FB&IG page) engagers excluding purchasers.

• Shop engagers excluding purchasers.

1 CBO bottom-of-the-funnel campaign per offer and messaging (5-10% of budget). Target:

• Website engagers excluding all-time purchasers.

ABO = Ad set budget optimized campaign, a campaign where you set up a budget on the ad set level. It gives you better control over the budget.

CBO = Campaign budget optimized campaign, a campaign where you set up a budget on the campaign level. It gives Facebook more control on how to allocate your budget between ad sets.

​​