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Facebook Ads: How to Optimise Dynamic Product Ads for Sales & Revenue

Running an online store and selling your favorite products are easy. However, owning or some of the winning SKU items are damn difficult. Once you find it, you definitely roll it out to Omni channels and generate sales and profit as much as possible and as soon as possible.

From my point of view, we’re running an omnichannel retail digital marketing strategy. The sales and revenue ratio among channels in the campaign performance tracker are generally and approximately looking like this:

Apart from business partnership and product marketing strategy, we should be trying to optimize the media cost and maximize the outcome from each channel. When talking about social commerce for eCommerce success, the first thing first must be facebook thanks to its lower cost per click and making things easier to kick start, no matter if you are a brand, reseller, or drop shipper.

Facebook Ads

Thus in this piece, I’ll walk you through how to run and optimize Facebook Dynamic product ads campaign. It aims to generate sales and manage to earn profit from your SKU items. Same with one of my articles regarding the Google Shopping ads campaign, I also take a 4-week optimization timeline as an example. So you can visually and dimensionally understand the steps. Being said that, this article doesn’t include transaction tracking, product listing to Facebook Shop, and Instagram Shop. It is regarding censorship, naming, and classification. I’ll write the other piece, and it’ll be coming soon.

By the end of this article, you can not only learn what Facebook Dynamic ads approach you can refer to. But also you can refer to some practical business thoughts from my personal experiences. They have helped out clients and the brand as an in-house marketer.

1st Week

1. Select Campaign Objective & Bidding Strategy

The first thing first is the campaign objective. As you know, there are many options available when setting up a campaign. And it’s important for you to carefully select. It’s because the advantages of Facebook ads are AI-driven. What you feed to the Facebook AI in the process, what AI can learn. And then what outcome you might have. 

As our goal is to drive sales and revenue, I’ll suggest you start with a conversion objective column. It’s because you can understand the baseline cost per sale of each SKU item as soon as possible, and start with conversion and catalog sales. This one is for conversions, and the other is also considering traffic. I’m not going to deep dive into the difference between them, if you’re interested in it, please check this article out:

Sales vs Clicks Driven Campaign In Facebook Advertising

Then, for working with our campaign objective, we would suggest starting with auction type and high value or lowest cost. It’s because again it also aims to understand the baseline cost per sale by reaching the most accurate ready-to-purchase audiences.

2. Dynamic Ads Campaign Structure & Audience Targeting

As mentioned, there are two objectives running for the same set of SKU items at the same time. I assume if you are just leveraging interest targeting and targeting the US market only. So at least you would allocate budget into two campaigns as listed below:

Ring Bundle - Catalog - Interest - USARing Bundle - Conversion - Interest - USA

If you have first-party data, we suggest creating customer match and lookalike campaigns for two objectives as well:

Ring Bundle - Catalog - Customer Match - USARing Bundle - Conversion - Customer Match - USARing Bundle - Catalog - Lookalike Match - USARing Bundle - Conversion - Lookalike Match - USA

Just keep in mind that the resting of audience demographic and other elements should be the same in 1st week, except for interest, customer match, and lookalike.

Both campaigns are sharing the same set of interest targeting settings, such as GEO, age, interest topics, detailed targeting expansion, gender, languages.

In the people connection section, we suggest you exclude people who purchased in at least 10 days or even 30 days because it would increase the cost per sale, and also you can create an independent remarketing campaign, which we would elaborate on in the 3rd and 4th week in a moment.

3. Limit Ads Placement and Conversion Lookback Window

Regarding Facebook ads placement, basically, divides into 7 sections, which are feed, stories, search, message, in-stream, in-article, and audience network. However, the accessibility to show ads depends on the campaign objective you select. For example, catalog sales can’t show ads on Facebook messenger.

Being said that, it won’t affect by starting with conversion and catalog sales campaign objectives if our campaign goal is to drive sales and revenue. The reason is feed ads placement comparably would have the lowest cost per sale, when comparing with the other 6 options. Thus, for learning the baseline of cost per sale from your SKU items, we suggest only selecting feed ads placement in the 1st week, and find out which SKU items and which placement perform better.

4. Start with Dynamic Ads Product Set by Product Collection

We don’t suggest you mix collection, like saying security camera collection, plus electricity vehicle products because the engagement performance and sales data might confuse Facebook AI in terms of the accurate target audience, and also visually confuse you what elements influence customers to engage and purchase.

Instead, we suggest you create the product set by collection and each campaign runs for one collection only like this

Ring Camera Bundle - Catalog - Interest - USARing Camera Bundle - Conversion - Interest - USAEV Adapter - Catalog - Interest - USAEV Adapter - Conversion - Interest - USA

2nd Week

1. Optimise campaign structure by high performing campaign objective/SKU items/audience targeting

I assume the 1st week spent US$5000 dollars and the total daily budget is US$700. So each dynamic ads campaign can have US$700/8 (US$85/day) if we run 2 collections. It’s sufficient to understand which campaign objective works better, and which targeting works better in terms of sales. For example:

Ring Camera Bundle - Conversion - Interest - USAEV Adapter - Catalog - Interest - USA

We need to create a product set specifically for the best performing SKU items with the same set of targeting, and it continues to run with a more daily budget in order to extend as much exposure daily as possible.

2. Optimise Dynamic Ads Product Set

After identifying better performing campaign objectives and targeting, which means we can put more effort to engage better with the target audiences and increase CTR, in order to boost more sales.

For example, to enhance the high performing SKU items photos, and create a list of connectable photo creative in the carousel format like this:

In a collection, some of the SKU items might be more expensive, and some of the items might be cheaper. So the strategy is if you have some SKU items that perform worst, we suggest you create a product set which includes this SKU item and the other two: One is more expensive, and the other is cheaper.

For low-performing SKU items that are priced at a higher rate, compared with competitors or a sector benchmark, its worse performance might be dealing with the pricing. So we suggest selecting one of them that might have a higher profit margin, and discount 10% or 15% only for the items that are grouped into a product set.

3rd and 4th Week

From the 3rd week, you should have accumulated a certain amount of engaged data, prospect data, and new customer data, and also comparably firm which individual items, which combination, or product bundles work better and sustainably in terms of sales and revenue. Because of this, we could segment 6 types of customers from this week and implement a Facebook ads strategy based on each segmentation purchase record, interest, and behaviour. I’m not going to deep dive into how to segment the customers, because I published an article regarding this topic previously. If you’re interested in this, please check it out.

eCommerce One to One Marketing Strategies for 6 Customer Segmentation

With customer segmentation, we can focus on three things to optimize:

1. Upsell or cross-sell existing buyers by leveraging Audience Targeting + Dynamic Ads Product Set


Show a product set to users that have viewed a different product set. For instance, if someone checked out a ring camera from your store, you can retarget them by selling your store membership, which can enjoy exclusive offers on any purchase, such as free shipping, exclusive 15% discount, etc.


Maximize your customer lifetime value by showing relevant products to purchasers. As an example, if a customer buys a Google nest hub max, you can show them ads for a bundle of nest hub max mount and Google nest camera, which can enhance its nest hub max using experience but also upgrade smart home user experience.

2. Retargeting non-convert prospects (customers who viewed, visited your site, and abandoned items in the cart)

Dynamic ads can retarget people who’ve shown an interest in your business by taking actions on your website, app, left items in the abandoned cart. They’re a way to quickly integrate your original marketing campaigns into your social remarketing campaigns.

We suggest you test by offering an exclusive discount or substitute options, or standard entry-level items that imply a much lower price than those they visited in the first place.

If we also implement tracking to identify omnichannel non-converted customers, such as from Google, email, display, etc, we suggest customing the offer based on the keywords and perceptions created by the previous channel message.

3. Roll out high performing SKUs to more FB, IG, and messenger ads placement

Last but not least, it’s time to further exponentially expand the audience reach of best-performing campaign, targeting, and SKU items by rolling out the ads to higher funnel ads format and ads placement, such as Instagram story, in-article, audience network.

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