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5 Tips for Effectively Setting Up Facebook Ads The fact alone that you can target and segment an audience almost down to the color of pants someone wears on a Tuesday is incredibly valuable.

By Adam Callinan

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Reuters | Valentin Flauraud

Unless you've been hiding under a rock for the last decade, you probably know that Facebook has become an unbelievably powerful tool for marketers and brands alike. The fact alone that you can target and segment an audience almost down to the color of pants someone wears on a Tuesday is incredibly valuable.

Let's look at five tips that you can use to set up your Facebook advertising while creating an opportunity to actually generate a return.

1. Use video.

Over the past year, Facebook has made a huge push for video content over static images, creating an opportunity to get your content seen more for less investment. Sure, there are certainly ways to utilize still images to get a users attention, but Facebook just isn't placing them at the top of the priority list.

Related: 4 Things Businesses Need to Know But Often Don't About Facebook Advertising

Instead, you should be captivating your potential customer with a series of short videos, no more than 25 seconds, that illustrate your product in action or the pain point you're addressing. Be sure to use a still image as the thumbnail that grabs attention, motivating the user to watch the video.

2. Install two Facebook pixels.

Facebook provides conversion data for certain types of ads, such as website conversion and click ads, but not for video view ads. To get this data you must install a Facebook conversion-tracking pixel on your site, specifically loaded in the store and checkout funnel. This may sound complicated but it's not.

Simply log into your Facebook ad manager and click "tools," then "pixels." You'll have the ability to create a snippet of custom code, in this case for checkout, which can be placed on your site. Most ecommerce systems have an option in the settings where these types of pixels can be copied and pasted, making installations extremely easy. Once complete, Facebook will report when someone executed a purchase -- as well as a boatload of other useful information on what users did when they arrived at your site.

While you're there, you should also create and install a Facebook audience pixel, which will allow you to target segments of users that look similar to those that have executed purchases on your site -- referred to as a "lookalike audience." Just follow the same process as above to do this, then select "lookalike audience" when you see the "custom audience" option during the first phase of ad creation.

3. Create custom links.

To understand how your ads are performing, you'll need to put in place ways to track them that go beyond what Facebook reports in the ad manager. To start, be sure that you have Google analytics set up on your site, then head to Google and create custom URLs for each ad you intend to post -- shrink them with if necessary, making them shorter and more tolerable. This will allow you to better understand the performance for each individual ad and what the users did once they arrived at your site.

Related: Dominate Facebook With This $5 Marketing Strategy

4. Test your copy.

Like anything in marketing, A/B testing is key. In this case, you should take your video and launch at least two different ad campaigns, targeted to the same audience and with the same video, but with different headline copy. You can start with small amounts of money -- just $10 per day per video -- and run the ads simultaneously for at least four or five days to see which triggers the best response.

Once complete, take the winner and perform the same set of tests but with different videos, keeping the headline constant. In a relatively short period of time you should be able to test down to a working ad setup, which you'll then need to continue to test against and improve, pretty much forever.

5. Analyze useful metrics.

There are the standard but important cost per click (CPC), cost per view (CPV), click-through rate (CTR) and cost per thousand impressions (CPM), as well as a laundry list of other reportable options. There are a few "off the shelf" reports in the ad manager, but you should focus heavily on custom activity reports, including post engagement, cost per share, cost per view and conversion and cost per acquisition data when available. In short, focus on fraction- or percentage-based metrics.

It's nice to see the big numbers, such as 10,000 shares or 1,000,000 views, but they mean almost nothing until you compare them against the amount of money spent to accomplish the given feat. Always focus on comparative outcomes instead, meaning that there should be a "cost per" in front of the accomplishment you're measuring.

Related: 5 Tips on Creating a Killer Facebook Ad Campaign

Adam Callinan

Entrepreneur and Venture Investor

Adam Callinan is a founder at BottleKeeper, the fast-paced and sarcasm-infused solution to the warm beer and broken bottle epidemics that have plagued the world for centuries. Callinan is also a founding partner at Beachwood Ventures, a Los Angeles-based early-stage and non-traditional venture-capital firm at the intersection of technology and entertainment. As an entrepreneur, Callinan has spent over a decade building small businesses in and around technology, medical devices and consumer products, which most recently includes an exit in 2013. Callinan lives in Manhattan Beach with his wife Katie.

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