This episode features Marin Istvanic, head of performance at Inspire Agency. During the last 12 months, he has profitably spent $30M on Facebook ads generating over $200M for his clients.
Marin shares about bringing results to their clients and how the result varies from client to client. He talks about the biggest mistakes that he sees people make when running Facebook ads on their own.
Andy and Marin discuss regarding conversion rates between videos and static images and the types of products for eCommerce that do better on Facebook than others.
Listen to Marin’s piece of actionable advice to someone thinking of testing and running some Facebook ads in the new year and the questions you need to ask if looking to hire a Facebook management company.
Finally, find out how Marin started running Facebook ads, their company’s target audience, and fee structure.
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Andy Splichal is the World's Foremost Expert on Ecommerce Growth Strategies. He is the acclaimed author of the Make Each Click Count Book Series, the Founder & Managing Partner of True Online Presence and the Founder of Make Each Click Count University. Andy was named to The Best of Los Angeles Award's Most Fascinating 100 List in both 2020 and 2021.
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Andy Splichal 0:00
Welcome to the Make Each Click Count podcast. This is your host, Andy Splichal. We are happy to welcome this week's guest to discuss today's topic, which is being successful running Facebook ads in the new year. This week's guest is the head of performance at Inspire agency. And during the last 12 months, he has profitably spent $30 million on Facebook ads, generating over 200 million for his clients a big welcome to Marin Istvanic. Hi, Marin.
Marin Istvanic 0:28
Hi, Andy, how you doing?
Andy Splichal 0:29
I'm doing great. Well, thanks for joining us today.
Marin Istvanic 0:31
No problem. Glad to hear.
Andy Splichal 0:34
Now in your bio, it says spending 30 million to generate 200 million. So that's an ROAS of about seven. Is that typical? Or do your results vary drastically from from client to client using Facebook ads?
Marin Istvanic 0:50
So yeah, that is quite an achievement. But actually, results definitely vary from client to client. And I mean, that makes sense, as they all have like different contribution margins, therefore they have different profit, therefore they have different drawers goals. So some aim from profit, some aim for revenue. So both spend and ROAS targets are different from client to client, as some require ROAS of five, some require, like rows of 1.5. And they're happy with that. So it's really depends, there's no kind of like one answer for all.
Andy Splichal 1:21
So is the ROAS depend then if a client comes in once a row as of two, let's say verse one that wants 10? Does it just depend on how targeted you get the ads, there won't be as much traffic for the one that gets a higher ROAS? Or are there other things that contribute to the profitability?
Marin Istvanic 1:40
I mean, some clients require I mean, if some client come here to us and says like, I need Ross of 10, then we say like, okay, you don't have a like, ad, you don't have a problem with your ad, you have a problem with your business, because that's kind of like Target way above the average, we cannot kind of like promise to achieve that. There's, there's kind of like you need to align your metrics and expectation or what you kind of like want to achieve, obviously, we could get like, I don't know, Ross of STEM, but then then I will be spending, like, I don't know, 100 bucks a day. So then, you know, you cannot scale so much, because it's impossible to maintain Ross of time. And it's kind of like not an average target that someone would require.
Andy Splichal 2:25
So are most clients worried about traffic or profitability?
Marin Istvanic 2:31
So, I mean, I guess it again, depends, I would say that they are worried about, about the profitability, because they came to us to kind of like optimize their ad account properly to set the foundation to introduce a testing framework, or framework for optimization for scaling. I mean, their lack of, I don't know, knowledge on the ads on the ads manager, which is kind of Facebook ads platform. So they need our expertise, they can get traffic themselves, just plugging ads on the on Facebook, but when you kind of like need to get it to work, they're there they there is what they have a problem. And they're where we come in.
Andy Splichal 3:14
That's a great place to take this conversation where when you get a new account, what are some of the biggest mistakes that you see people making when they're running Facebook ads on their own? So
Marin Istvanic 3:31
there are a couple of those that I kind of see on most of the accounts that I audit, and I audit over 50 accounts this year. So first one is not speaking to the target audience, based on what level of your funnel they are. So basically, if you're just promoting benefits to someone who never heard heard of you and doesn't even though that he has a problem, it won't convert. So basically, you want to treat your audience differently for someone who never heard about you, you want to kind of like emphasize the problem, agitate that problem, then present a solution, someone who heard about you, but then maybe he isn't he's not, he's not made the decision to buy, you will probably kind of like emphasize the benefits, you will emphasize how this product has a guarantee and free shipping. Then someone who is kind of like more inclined to buy you will see you will show some testimonial video or UGC review video that he kind of like gets the idea that other other people already bought this product and they're happy with it, they're satisfied, you would potentially show our unboxing video to kind of like present someone how the experience of getting this product will be. So basically treating the audience differently depending on what stage of the funnel they are. That's problem number one. Frontal number two, I would say not leveraging all the features that Facebook gives you like, create an audience out of your website visitors that never bought, that is kind of a lot lowest hanging fruit. Because those people, those people are interested in your product, something is stopping them. So you can kind of like them twice some objection handling copies to get them to buy. So I would say that's kind of like a mistake that can be easily fixed and can can generate a high return. Considering you you don't have to spend so much to convert those people that are already interested in your product.
Andy Splichal 5:38
Now, you had mentioned some testimonial videos or unpacking videos, do you find that videos convert better have higher conversion rates than static images?
Marin Istvanic 5:51
So that's, that's a tough question. Again, it depends, I would say that video works better for the product that needs kind of like some education where you need to demonstrate how the product works. If you have some iron on basic t shirt or a dress, image can work better. But as I said, for products that require education that you need to showcase how the product work, how to use it, video works better, there are definitely some periods when images can work better, let's say during Black Friday period, when most of your audience is retargeting and they are already familiar with your product. So when you present an image that usually has a lower CPM, on the platform compared to the video, you could get some success with it. But then again, the whole kind of learning landscape is going into video only. You have like tick tock, which is kind of booming now. Right now. And there, you can showcase only videos, so it kind of makes sense to run more videos.
Andy Splichal 6:58
Now, have you found that certain types of products for E commerce do better on Facebook than others?
Marin Istvanic 7:07
Hmm, I would say that highest price point product do not work so great. Because like it's hard to expect for someone to buy product, let's say that's I know about 200 USD, right of the first click, I mean, that's a big investment. So people need to kind of like, do some research on their own, find out some other reviews from people who bought the product, it's hard to get that sale on such an expensive product. So maybe some other channels like YouTube influencers, they have all kinds of opportunity to showcase your video in a 10 minute video, they're explaining like all pros and cons of your product that kind of like, convert better for expensive products.
Andy Splichal 7:56
Now, you talked a little bit about audiences, and what part of the funnel there in how many different audiences are you creating, typically for a client.
Marin Istvanic 8:09
So I mean, for let's say, for prospecting, we just kind of like top of the funnel, people that never heard about us that never interacted with us, we try to kind of like leverage Facebook or Google algorithm, and we kind of like start with broad. So basically, with no interest targeting, that's kind of one ad group, the other ad set would be trying to find an interest audience that is kind of like similar to our, to our niche in which product is so let's say, if we were selling some serum skincare, we will try to kind of like target people that are into skincare into anti aging, beauty salons or stuff like that. So that's kind of like group number two. Since the IRS we do not rely so much and lookalike because they are not so effective anymore, as Facebook has like less and less data. And in terms of free marketing, there are a couple of let's say main audiences that we use. One is website visitors. The second is Facebook engagement. So basically people that engage with your page or with your post, Instagram engagers and video watcher. So basically people that watch certain percentage of your video, but they did not click on the ad and proceeded to your website.
Andy Splichal 9:30
Why do you split those out?
Marin Istvanic 9:32
So basically, let's say prospecting. This is kind of like our top of the funnel. So we want to know
Andy Splichal 9:41
No, but I mean like Facebook, people who engage with your ad versus people that visit the website.
Marin Istvanic 9:48
So you have an option in ads manager and Facebook Ads Manager to create those audience you can kind of like specify out of which video or like which page or which page on your web say people visited so you can create those, then you can segment obviously people that watch the video, but they did not click, they don't have a same, let's say, same level of interest into your product as people who were on your website. So basically we want to exclude website visitor from the people that watch the video. Same goes for people that added to cart, we want to exclude those for website visitors because Add to Cart audiences, we wanted to read differently and potentially showcase some of our objection handling copies that will kind of like get them to that to kind of eventually buy.
So by trading differently, you're meaning different ads, not different bids. Yeah, or anything like that.
Yeah, different ads, and different different exclusions. So basically, in top of the funnel, we're excluding the middle of the funnel audience like engagers and video watchers in those audiences, we exclude website visitors, just for the fact that we want to treat them differently with a different messaging and with a different different ad style.
So this type of really segmenting the account, I would guess it's it's going to really make tracking accurately essential how, how has the iOS 14.5 changed the Facebook landscape, and how are your ads performing before and after this update.
So I would say that like iOS update definitely changes in the landscape, that's for sure. I mean, users can opt out of tracking, which makes your ad less relevant. So potentially, someone can opt out. And we could showcase the same ad to someone who already bought, which is kind of what we don't want. In my opinion, opting out of tracking is not beneficial to both us marketers and to users. Because I always say like, ad is annoying only if it's not relevant. But if you opt out of tracking, Facebook has less data about you, and it will show you less relevant ads. So that's kind of like a big, big thing you don't want to see an ad on about stuff that you're not interested in. But I would say that is kind of came at a good time because like good marketers survived, people that are kind of focused on product market fit, not tips and tricks and the ad account. Because messaging and testing your offer is what kind of makes it different. I would also say that Facebook ads are just sharing on top, they're kind of like amplifier, you cannot expect just like to turn on Facebook ads and expect great results. In regards how my results changed. I would say that Facebook for us, in terms of like before iOS and after iOS is definitely looking firsts in platform. So basically, previously, I had rows of four and I have rows of maybe I don't know 2.5. But when you check the revenue of when we checked the revenue for clients in Shopify, that didn't change so much. That means that not that people not that brands are performing bad. It is just Facebook has less ability to kind of like present all the data, although it is still generating the results. Interesting, the biggest, yeah, and the biggest effect. I think that like only super niche brands were hit pretty hard. So basically, clients that are still selling like kind of wide purpose product, they still have success, but only those like super niche products were hit pretty bad because of the Facebook has like less than data. So it's harder to find that potential customer and to be profitable. Why running ads for those customers.
Now here we are starting the new year, what is a piece of actionable advice you would give to someone thinking of of testing and running some Facebook ads in the new year?
So I would like to stick to the basics. So like always do your research before advertising. So check your competitor website, check their ads and their comments on the ads, check Amazon reviews, check Reddits adjust your messaging to the target audience like that is the foundation before like there's no much sense there not much sense to running any ads unless you do that unless you know who your target audiences, how to approach them, what is bothering them how to resolve that. And regarding the Facebook tips, I would say always optimize for conversions. If your end goal is to get sale, Facebook is pretty good to giving you what you want. If you optimize for video views, you will get only people that will watch your video and never do anything after that. If you want if you optimize for add to carts, people would only add to cart and they will not end up buying so definitely if you want sales always optimize for conversion Once and for purchase.
So is that pretty much all the ads you run of our conversion? Or do you run any traffic ads?
No traffic ads, because you would get only people that click on your ad, you see, it looks like your click through rate is way better, but those people never ended up buying. So basically, we always optimize for conversions. We have certain besides that there is a sales objective with the catalog sale campaign, which is pretty much showcasing you the product that you already browsed. So basically, if you were on my website, and you saw, I don't know, a blue t shirt, when you go back to Facebook, I will, I will not show you just any t shirt, I will just show you blue t shirt, because I know you're interested in that.
Now, let's say somebody doesn't have time to learn Facebook and run Facebook for their own e commerce Store. If you are an E commerce owner, and you are looking to hire a Facebook management company, what questions would you ask them.
So I would definitely ask them for some kind of like track of their results. But after iOS, because a lot of people were flexing with their results before the iOS having crazy results now, like is changed that landscape, you need to be a bit more savvy about Facebook ads. So I would definitely ask for some case studies, or kind of like their referrals, some kind of like recommendation of people with whom they work with. Also, I would kind of like try to understand who would who would work on my ad account, if I hire an agency, because you have so much agencies, some big agencies that scale too big, and they kind of like promise you everything and then you get some junior working on your junior media buyer working on your ad account. So like quality is not so good it waters down. So definitely make sure that whoever you talk with is kind of like promising you that you will get someone who is really know what he's doing. Because you don't want to spend so much money on ads pay agency fee and get some junior media buyer working on your ad account that knows less than you.
Yeah, you know, that's one of the main warnings I get for people looking because I do Google ads. So people are looking to hire companies to manage their Google ads. There's a lot of times the larger companies, it filters down to like a junior marketer, especially if you're a smaller account. Now, Amazon it's quite popular, you know, a big news story there. But I'm curious, have you ever run ads for a client using Facebook directly to their products on Amazon using Amazon attribution to track it? Or are you generally are you always sending it to a company is on website.
So considering we are we are working only, let's say with econ clients in I would say 98% of the cases we are leading to brand website, it makes no sense for us to run to Amazon listing as we cannot place a Facebook pixel there. So we cannot track what ads are actually generating the sale. Okay, we can see increase in traffic to that listing. But we don't know whether our ads resulted in sale, we cannot optimize it. So it kind of like doesn't make sense for us to lead to Amazon listing.
Now, if you had a crystal ball, where would you see Facebook advertising heading? And how would you see it changing over the next 12 to 18 months?
So if you asked me this question a year ago, I would probably be a lot more pessimistic than now. Because like we were kind of like maybe a couple of months after the iOS update, we kind of like we're struggling do we know what to expect. But now, I would say that like after a couple of great updates from Facebook side, I'm more optimistic than ever. So basically, we got the ability to see breakdown of the results back in the ads manager in the our ad accounts, we got option to compare attribution settings to basically see in what period after clicking or viewing our ad people are actually converting, which is kind of like super useful for decision making. Also, a couple of months ago, Facebook introduced one new feature called advanced shopping plus, which is pretty similar to the performance Max and Google, which kind of relies more on the AI and all know all of the ad accounts that I'm running, we are seeing some great results with that feature. So I mean, to be honest, I'm more optimistic than ever. I'm just curious how Facebook would incorporate all this into this meta thing, considering they're kind of like relying heavily on that.
Wait, it's performing great. Yeah, so it's not so it's not like performance, Max. Okay, I digress. I don't want to get into that but
it's definitely a black box. But at the moment it is performing.
Hey, how did you get started running Facebook ads?
So I was on my senior year of college and like trying to figure out what to do with my life. Should I kind of like end this degree on computer science? Or should I pursue professional soccer career because I was at the, at the time, I was playing soccer for 20 years. But somehow I stumbled upon digital marketing. I saw one ad, I started learning everything about it like later reading the whole Google support literature around Google ads, try to understand better watching webinars videos in YouTube. Luckily, I had one friend that that was in favor that was doing Facebook ads. So I started working with him basically doing all those small tasks, like creating a copy finding the audience launching the ads, so I got some kind of like, practice, I got better at it. And I started working with the freelancer and here's here's where I'm now head of performance at Inspire.
And during this journey, have there been any business books out there that you could attribute to your success as an entrepreneur?
Hmm, definitely, I would say that breakthrough advertising from Eugene Schwartz is kind of like setting the foundations trying to understand in what level of awareness and market sophistication your target audiences and how to approach them, then Influence The Psychology of Persuasion by Cellini. I it kind of like gives you a nuances some psychology and how people think and behave. And growth hacker marketing by Ryan Holiday. It kind of like gives you a framework on how to test how to iterate how to create a flywheel, no matter at what stage in marketing you are.
Now, you had mentioned, inspire agency who is the perfect client who you guys working with over there.
So mostly he can DTC store owners, mostly on Shopify that have like a proven market fit that are spending at least 30k on Facebook ads, because there's that is kind of like stage where, where our expertise comes pretty handy. So that's kind of like our target. Target client.
So direct to consumer where they're spending 30k a month and in the Facebook ads. Yes, exactly. And how does your fee structure work?
So our minimum fee is 2.5k USD, because we have some, some of the clients that are spending below 30k. After that, it goes to the 10% of the ad spend. But if we spend about 100k, the percentage goes down to 9k. If we spent about 200k, the percentage goes down to 8%. So it really depends, like, how much are we spending? Because we have some clients that are spending 40k, we have some clients that are spending one mil. So if there's a wide wide range?
And how can an interested listener learn more about working with you? And do you have any special offers going on right now? For listeners?
Yeah, for sure. So you guys, like whoever's interested in can check my Twitter, I'm on a daily basis sharing tips and tricks about Facebook ads, like how to set up the ad account, what are some tips and tricks? How to leverage all of the audiences? What are some ads that are working, but if your potential store owner that is spending, at least I would say, I don't know, 20k, we are offering a free audit of your ad account, you would get a list of things that we think should be improved, how to improve them, and like you would get at least three revenue generating tips that will help you with your performance of the ad account.
Well, this has been great. Is there anything else you would like to add before we wrap it up today?
Not much. I would just thank you for having me. Keep up with the good work. I like this podcast and I'm excited to be a guest here.
Well, great. Well, thanks again for joining us today. Thank you Bye For listeners. Remember if you liked this episode, please go to Apple podcasts and leave us an honest review. And if you're looking for more information regarding margin, or inspire agency, you'll find the links in the show notes below. In addition, if you're looking for more information on growing your business, check out our podcast Resource Center available at podcast dot make each click count.com. We have compiled all of our different past guests by show topic and included each of their contact information. In case you would like more information on any of the services I've discussed during previous episodes. But that's it for today. Remember to stay safe, keep healthy and happy marketing and I will talk to you in the next episode.