Paid Advertising

Expert synthesis: Cody Plofker (Jones Road Beauty) · Nick Shackelford · Savannah Sanchez · Andrew Foxwell · Barry Hott · Tim Masek · Sam Tomlinson · John Moran · Kirk Williams · Chase Chappell · Tom Breeze · Ralph Burns · Ben Malol · Nick Peroni · Depesh Mandalia · Maxwell Finn · Harry Hawk · Molly Pittman · Ryan Deiss

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#WHAT SEPARATES PROFITABLE AD OPERATORS FROM EVERYONE ELSE

The average e-commerce operator looks at Facebook Ads and sees:

• Campaign structure
• Budgets
• Targeting
• Ad creatives

The elite operator sees:

• Creative as media — your ad IS your audience filter
• Auction dynamics — the algorithm buys audiences, you compete on creative quality
• Unit economics — every campaign decision starts from the P&L, not the dashboard
• Testing velocity — the operator who learns fastest wins; the learner who spends fastest doesn't

This module teaches you to think and operate like the elite 5% of e-commerce advertisers.

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#SECTION 1: THE MENTAL MODEL FOR PAID ADS

#1.1 The Algorithm Reality (2025)

Meta, TikTok, and Google's ad systems in 2025 are fundamentally different from 2018–2021.

The old model:

• Detailed audience targeting was how you won
• Find the right interest → right demo → show them your ad
• Advertisers competed on audience precision

The new model:

• Broad targeting wins (Meta's recommendation: interest-free or extremely broad)
• The algorithm finds buyers better than human targeting
• You compete on creative quality and signal strength (your Pixel / CAPI data)
• The ad IS the targeting — Meta shows your ad to people who respond to that type of content

Implication: Stop obsessing over audiences. Start obsessing over creative.

Barry Hott (one of the best paid media practitioners in e-commerce) says: "The creative is the targeting." This is the most important sentence in modern paid media.

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#1.2 The Creative → Signal → Audience Flywheel

Better creative quality
↓
Higher click-through rate
↓
Better audience signal from clicks (purchase intent)
↓
Algorithm finds more lookalikes of these high-intent users
↓
Lower CPMs (Meta rewards relevance with cheaper impressions)
↓
Lower CPA
↓
More profit → more budget → test more creative
↓
Repeat

Operators who don't understand this run interest-targeting rabbit holes and wonder why their CPA is twice their competitors'. The answer is always creative quality.

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#SECTION 2: META ADS (FACEBOOK + INSTAGRAM)

#2.1 Campaign Structure (Advantage+ vs. Manual)

2025 recommended structure:

For testing ($0–$5k/month spend):

Campaign: [Product] — Testing
Objective: Sales (Conversions)
Budget: CBO (Campaign Budget Optimisation) $50–$100/day

Ad Set 1: Broad (no interests, age/gender only)
  → 3 creative variations

Ad Set 2: Interest stack (5–10 relevant interests)
  → 3 creative variations

Ad Set 3: Lookalike 1% (from customer list or pixel data if available)
  → 3 creative variations

For scaling ($5k–$50k/month):

Campaign 1: Advantage+ Shopping (let Meta do everything)
  → 5–8 creatives, Meta distributes budget
  → This is often your best-performing campaign at scale

Campaign 2: Manual CBO — Broad
  → 1 ad set, 10+ creatives
  → Kill creatives with ROAS <2× after 7 days, duplicate winners

Campaign 3: Retargeting
  → Audience: Visited product page, didn't purchase (90 days)
  → Budget: 10–15% of total spend
  → Higher conversion offer (discount, urgency, different angle)

The Advantage+ note: Meta's Advantage+ Shopping Campaign (ASC) has been the top-performing campaign type for most e-commerce stores since late 2022. Run it. It handles audience, placement, and delivery optimization automatically. Your only job is creative.

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#2.2 Creative Testing System (The 3-2-2 Method)

Cody Plofker (CMO Jones Road Beauty, scaled to $50M+/year):

The framework:

• 3 different hooks (opening 3 seconds)
• 2 different bodies (middle section)
• 2 different CTAs (closing offer)

Produces 12 unique ad combinations from 7 creative assets. Test all 12, scale the winners.

What "hook" means: The first 3 seconds of a video (or first line of a static ad) is the only thing that determines if someone watches further. Test hooks more than anything else.

Hook types that work for e-commerce:

1. Problem hook: "If you wake up exhausted every morning, this is for you"
2. Result hook: "I've lost 8kg in 90 days using this one thing"
3. Curiosity hook: "This is why your back always hurts by 3pm"
4. Controversy hook: "Most supplements are a waste of money — except this"
5. Story hook: "I spent $2,000 on mattresses before I found the real problem"
6. Pattern interrupt: Loud sound, unexpected visual, text that contradicts expectation
7. Social proof hook: "47,000 people have already tried this"

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#2.3 The Creative Brief Template

Use this to brief anyone creating content for your ads (in-house, UGC creators, agencies):

CREATIVE BRIEF

Product: [Product name]
Target audience: [Who is this person? Be specific]
Their biggest problem: [What keeps them up at night?]
The outcome they want: [What does their dream life look like related to this problem?]
Why our product is different: [The mechanism — how it works differently to alternatives]
Proof/credibility: [Social proof, certifications, founder story, reviews]
The offer: [Price, any discount, guarantee]
CTA: [What action do we want them to take?]

Hook options to test:
1. [Problem-based hook]
2. [Results-based hook]
3. [Curiosity/curiosity gap hook]

Tone: [Conversational/educational/urgent/aspirational]
Length: [15s / 30s / 60s / static / carousel]
Reference ads: [Link to 2–3 competitor ads from Meta Library that you want to emulate]

DO NOT: [List anything that violates ad policy — health claims, comparison claims, etc.]

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#2.4 Scaling Framework (The Rule of 20% and 48h)

The #1 amateur mistake: Touching your campaigns too frequently.

The Meta algorithm needs 5–7 days of data to exit the "learning phase." Every time you change a budget, creative, or audience, you restart learning.

The operator rules:

1. Scale budget 20% maximum per 48h. Never double overnight.
2. Wait 7 days minimum before judging a new campaign. The first 3 days are noisy.
3. Kill underperformers after 7 days. ROAS below breakeven after 7 days = dead.
4. Duplicate winners, don't edit them. If an ad set is working, don't touch it. Duplicate → edit the duplicate → test.
5. One change at a time. If you change audience AND creative AND budget, you don't know what caused the change.

When to scale horizontally vs. vertically:

• Vertical scaling: Increase budget on existing winning ad sets
• Horizontal scaling: Duplicate winning ad sets into new audiences / countries
• Vertical hits a ceiling (diminishing ROAS past a point). Horizontal extends the runway.
• Best operators do both simultaneously.

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#2.5 The Pixel and CAPI Setup (The Foundation)

Without proper tracking, you're flying blind. Meta's ad algorithm optimises based on the signals it receives from your store. Bad tracking = poor optimisation = bad results.

The setup that matters:

1. Meta Pixel:

• Install via Shopify → Settings → Customer Events → Meta (native integration)
• Test events with Facebook's Events Manager → Test Events tool
• Confirm: PageView, ViewContent, AddToCart, InitiateCheckout, Purchase all firing

2. Conversions API (CAPI):

• Server-side tracking — bypasses browser privacy restrictions
• In Shopify: Settings → Customer Events → Add connection → Meta Conversions API
• This is non-negotiable for post-iOS14 tracking accuracy
• With both Pixel + CAPI, you're reporting 80–90% of actual conversions to Meta
• Without CAPI, you're reporting 40–60% = algorithm underfuelled

3. UTM parameters:

• Every ad URL needs UTM tags for GA4 / Triple Whale attribution
• Format: ?utm_source=facebook&utm_medium=paid&utm_campaign=cbo_test&utm_content=hook1_ugc
• Build a UTM builder spreadsheet and never publish an ad without them

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#SECTION 3: TIKTOK ADS

#3.1 Why TikTok Is Different (And Why You Must Be On It)

TikTok's ad platform has the lowest CPMs of any major platform for e-commerce in 2025. Why?

• It's still maturing as an ad platform
• Competition (number of advertisers) is lower than Meta
• The content-native ad format (TikTok users expect to see ads that look like content)
• Algorithm is hyper-aggressive at finding buyers fast

The TikTok vs. Meta distinction:

• Meta users are used to being sold to → they filter more → higher CPMs
• TikTok users are used to being entertained → they engage more openly → lower CPMs
• Meta is better for brand-aware audiences → retargeting, mid-funnel
• TikTok is better for cold acquisition at scale → especially 18–35 demographic

Savannah Sanchez (top TikTok paid media operator, $100M+ managed): "TikTok requires entertainment first, sale second. The moment you break from content-native format and go direct-response hard sell, you're dead."

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#3.2 TikTok Creative Rules

What works:

1. UGC (User-Generated Content style): Someone on camera talking to the camera like they're talking to a friend. No studio, no green screen, no professional lighting. Authentic.

2. Problem-solution-product story: Hook with the problem (5 seconds), show the struggle (10 seconds), introduce the product as the solution (10 seconds), show transformation (10 seconds), CTA (5 seconds). 40 seconds total.

3. Product demonstration: Show exactly how the product works. No voiceover needed sometimes — just the visual + text overlays. Satisfying product moments = TikTok gold.

4. Trending audio: Using audio from TikTok trends (with appropriate licensing) increases organic reach and ad engagement simultaneously.

5. Text overlays: 70% of TikTok is watched on mute. Important information must be on screen as text.

What doesn't work:

• Polished, produced ads (feel fake on TikTok)
• Talking at the camera for more than 3 seconds without movement/cut
• Music that doesn't match the content tone
• Excessive product claims in the first 5 seconds

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#3.3 TikTok Campaign Structure

TikTok Ads Manager recommended structure:

Campaign: [Product] — [Month/Quarter]
Objective: Conversions → Purchase (or Website Conversions)
Budget: Campaign level, not ad group

Ad Group 1: Broad — Female 18–35
  → Creative: 3 UGC hooks
  → Placement: TikTok only (not partner networks)

Ad Group 2: Interest targeting — [Relevant interests]
  → Creative: 3 different UGC hooks
  → Different angle from Ad Group 1

Ad Group 3: Custom audience — Website visitors 30 days (retargeting)
  → Offer-based creative (discount, urgency)

Budget starting point: $50–$100/day minimum to give the algorithm enough data.

TikTok Creative Center: apps.apple.com/creative-center — free tool showing top-performing TikTok ads across categories. Study the format, hooks, duration of winners in your niche.

Spark Ads: Instead of running ads directly, use Spark Ads to boost organic TikTok posts. Benefits:

• Native TikTok content format (comments, likes, shares accumulate)
• Lower CPM than standard dark post ads
• Social proof visible on the ad
• Particularly powerful for UGC content from real customers/creators

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#3.4 TikTok Shop (The Biggest Opportunity in 2025)

TikTok Shop is the integration of TikTok's social commerce into the advertising ecosystem. Key stats:

• US TikTok Shop GMV grew 280% year-over-year
• In-app purchasing removes all friction
• Creator affiliate program means your products can be promoted by thousands of creators on commission only (zero ad spend)

How to set it up:

1. TikTok Seller Center → Create a shop
2. Sync product catalogue from Shopify
3. Enable Creator Marketplace → set affiliate commission (15–20% recommended)
4. Creators find your products, create content, earn commission on sales
5. Your job: Approve creators, ship products, monitor quality

The TikTok Shop affiliate play: This is the closest thing to "free" paid traffic in e-commerce right now. You pay 15–20% commission (like a performance affiliate) but only on sales. Creators take the creative risk and distribution risk. You take the inventory risk.

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#SECTION 4: GOOGLE ADS FOR E-COMMERCE

#4.1 When Google Makes Sense

Google is not where you start. It's where you add as you scale.

Start with Google when:

• You've proven product-market fit on Meta or TikTok (>$20k/month)
• You have a product with clear search intent (people Google "buy [product]")
• Your blended MER is healthy and you need more scale beyond social platforms

Google ad types for e-commerce (ranked by priority):

1. Shopping/Performance Max — Highest ROI for e-commerce, always start here
2. Brand Search — Bidding on your own brand name (~$0.10–0.50 CPC, massive ROI)
3. Non-brand Search — Target "best [product category]" searches
4. YouTube — Long-form video for consideration-phase buyers

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#4.2 Google Shopping and Performance Max

Performance Max (PMax): Google's fully automated campaign type that runs across Search, Shopping, YouTube, Display, Gmail, and Maps.

The only way to run Google Shopping in 2025 is via PMax. Standard Shopping campaigns exist but Google is phasing them out.

PMax setup for e-commerce:

1. Upload product feed via Google Merchant Centre → sync from Shopify (use Google & YouTube Shopify app)
2. Create Performance Max campaign
3. Provide: 5 headlines, 5 descriptions, 5 images, 1–2 videos (minimum)
4. Set conversion goal: Purchases, with conversion value
5. Target ROAS: 300–500% (3–5×) for most categories. Don't go lower.
6. Let it run 30 days before making judgments — PMax needs more data than Search

What to feed it (asset quality matters):

• Best product images (white background + lifestyle)
• Best-performing ad headlines from Meta (often transfer well)
• Product video from TikTok/Meta (repurpose)
• Customer testimonials in headline format: "10,000+ customers love this"

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#4.3 Brand Search Campaigns (The Hidden Profit Center)

Brand search = bidding on your own brand name.

Why you must do this:

• Competitors can bid on your brand name
• Without brand bidding, your competitor's ad shows above your organic listing
• Brand CPCs are $0.10–$0.80 (extremely cheap, highest intent traffic)
• Conversion rates from brand search are 8–15% (10× cold traffic)

This is the single highest ROI campaign in your Google account. Never turn it off.

Setup:

• Campaign: Brand Search
• Keywords: [brand name], [brand name] + product, [brand name] + reviews, [brand name] + discount
• Match type: Broad match only (prevents competing with yourself)
• Budget: $10–$50/day is enough for most brands under $500k/year

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#4.4 The Google-Meta Interplay

John Moran (one of the top Google Ads strategists in e-commerce): "Meta creates demand. Google captures it."

The customer journey for most e-commerce brands:

1. See your ad on TikTok/Instagram → interested but don't buy
2. Google "[your product]" or "[your brand]" later → find you again
3. Click on your Google Shopping ad or brand search ad → purchase

This cross-channel attribution is why Google always looks like it has incredible ROAS. It does — because it's capturing demand Meta already paid to create.

Implication: Don't optimise Meta and Google independently. They're the same funnel.

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#SECTION 5: CREATIVE PRODUCTION AT SCALE

#5.1 The UGC Creator System

UGC (user-generated content) is the lifeblood of e-commerce advertising in 2025.

Why UGC wins:

• Looks organic (doesn't feel like an ad)
• High authenticity = higher trust = better conversion
• Cheap to produce (vs. professional production)
• Fast iteration (new video in 24–48h vs. weeks for studio)

Where to source UGC creators:

• Billo.app — Marketplaces of UGC creators. $50–$150 per video. Fast turnaround.
• Minea.com — Shows which UGC-style creatives are performing (reference for briefs)
• TikTok Creator Marketplace — Partner with real TikTok creators
• Direct outreach — DM micro-influencers (5k–100k followers) in your niche with free product + $50–$200 for content rights

Briefing UGC creators:

• Give them the talking points, NOT a script
• Scripted UGC sounds scripted. Unscripted, natural content converts better.
• Provide: What problem the product solves, key features, any claim restrictions
• Ask for: 3 versions of the hook at minimum. 15s + 30s + 60s if possible.
• Allow: Their own style, their own words, their own personality

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#5.2 Static vs. Video: When to Use Each

Static images work best for:

• Retargeting (familiar audiences)
• Product detail shots (show exactly what they're buying)
• Promo announcements (sale, limited edition, launch)
• Google Shopping (static product images required)
• High-ticket, consideration-phase purchases

Video works best for:

• Cold traffic acquisition (story, demonstration, problem/solution)
• TikTok (almost always video)
• Product mechanism that requires demonstration
• First touchpoint in a new market

The 2-format rule: Run static AND video ads simultaneously. They reach different users and different moments. The operator who runs only one format is leaving money on the table.

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#5.3 Ad Fatigue and Creative Refresh

Ad fatigue = when your audience has seen your creative so many times that performance declines. Signs:

• CTR declining week-over-week
• CPC rising
• Frequency >4 (Meta shows this in ad set level)
• ROAS declining despite same budget and audience

Prevention:

• Never stop creating new content. Even at $5k/month ad spend, you should be testing 10+ new creatives per month.
• Cody Plofker at Jones Road Beauty tests 30–50 new creatives per month. That's why their CPAs stay low.
• Rotation: Kill an ad when frequency hits 4+ or CTR drops >30% from peak

The creative testing cadence:

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#SECTION 6: THE AD OPS DASHBOARD

#6.1 The 3 Metrics That Actually Matter

There are 200+ metrics in Meta Ads Manager. The operator tracks 3 daily:

1. MER (Marketing Efficiency Ratio) = Total revenue ÷ Total ad spend

   • Your blended true return on all ad spend
   • Target: >3× for most e-commerce with 30–40% margins
   • Tracks daily in a spreadsheet (not relying on Meta's reported ROAS)

2. CPP (Cost Per Purchase)

   • What does it cost to acquire one customer?
   • Must be below your breakeven CAC at all times
   • Track by channel (Meta CPP vs. TikTok CPP vs. Google CPP)

3. New Customer CPP (NC-CPP)

   • Strip out repeat purchasers. What does it cost to acquire a brand new customer?
   • Taylor Holiday's framework: "New customer revenue is the only metric that tells you if your brand is growing"
   • If your overall CPP looks good but NC-CPP is rising, you're burning existing customers not growing

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#6.2 The Weekly Ad Review Process

Monday: Weekly reset

• Pull last week's data: spend, revenue, ROAS, CPP by campaign
• Compare to previous week and month
• Flag any campaign where ROAS dropped >20% week-over-week

Wednesday: Creative review

• Check which creatives are in learning phase vs. active
• Kill creatives with spend >$100 and ROAS below breakeven
• Identify top 3 creatives by volume this week → brief 2 variations of each

Friday: Scaling decisions

• Scale budgets 20% on anything performing above target ROAS for 7+ days
• Pause anything that's been below target for 10+ days
• Review new creative test results from Tuesday launches

This is the entire job. Great ad operators spend 80% of their time on creative and 20% on these review cycles. Operators who spend most of their time in the ads manager tweaking audiences and budgets are the ones with the worst results.

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Next module: IDS_05_Marketing.md — Organic marketing, email, SMS, influencer, and content strategy for brands that own their audience.