Solved: Confused by Meta Ad Manager Funnel Setup

Hi there,

Thanks for reaching out!

I had a read through your questions and honestly, your frustration is completely normal. Meta's Ad Manager can feel like a labyrinth designed by someone who hates logic. The good news is that once you understand the core principles, it all becomes a lot simpler. The problem isn't usually the interface, it's the flawed strategies that most people are taught.

You're trying to build a 'funnel ad', but you're getting bogged down in the mechanics of ad sets and bidding. The real issue is that your entire approach to structure needs a rethink. Let's forget the confusing jargon for a bit and walk through a framework that actually works, based on what we've seen deliver results for countless clients, from small eCommerce stores to B2B software companies generating thousands of leads.

We'll need to look at your campaign structure...

First things first, let's answer your main question directly. Should you use different ad sets for cold and warm, throw them in one ad set, or create different campaigns?

The answer is the third option: you absolutely must create different campaigns for cold and warm audiences. In fact, I'd go a step further and say you need three distinct campaigns running at all times:

1. A Top-of-Funnel (ToFu) Campaign: This is your 'cold' audience. These are people who have never heard of you. The only job of this campaign is to find new potential customers.
2. A Middle-of-Funnel (MoFu) Campaign: This is your 'warm' audience. These are people who have shown some interest—they've visited your website, watched a video, or engaged with your page—but they haven't taken a high-intent action yet.
3. A Bottom-of-Funnel (BoFu) Campaign: This is your 'hot' audience. These people are on the verge of converting. They've added a product to their cart, initiated checkout, or filled out half a lead form.

Why seperate them into different campaigns? Because a person who has never heard of you needs to see a completely different message than someone who has already added your product to their basket. Lumping them together in one ad set, or even one campaign, is like trying to have a single conversation with a stranger and your best mate at the same time. You'll end up saying something that's not quite right for either of them. The Meta algorithm also gets confused. It doesn't know whether to prioritise showing ads to new people or to existing visitors, and your results will be messy and unoptimised.

By creating seperate campaigns, you can control the message, the offer, and the budget for each stage of the customer journey. It makes your reporting cleaner, your optimisation easier, and your results much, much better. This isn't about making things more complicated; it's about creating clarity and giving the algorithm clear instructions.

I'd say you need to rethink who you're talking to...

Your ToFu (cold) campaign is where most businesses waste the majority of their money. They target broad, meaningless interests and wonder why no one converts. You see, the problem is that most people define their Ideal Customer Profile (ICP) with useless demographics.

"Our customer is a male, 35-55, living in London, interested in 'business'."

That tells you nothing. It describes millions of people, 99.9% of whom will never buy from you. To stop burning cash, you have to define your customer not by who they are, but by their nightmare. What is the specific, urgent, expensive, career-threatening problem they are facing right now that your product or service solves?

Your Head of Sales client isn't just a job title; she's terrified of missing her quarterly target and having to explain it to the board. Your eCommerce customer isn't just 'interested in skincare'; she's deeply frustrated that she's tried a dozen products and her acne still hasn't cleared up before her best friend's wedding.

Your ICP isn't a person; it's a problem state. Once you know the nightmare, you can find them. They're listening to specific podcasts, reading niche newsletters, and following particular influencers who also talk about that nightmare. That's what you target.

For instance, one of our clients sells B2B software to other eCommerce stores. Instead of targeting the broad interest "eCommerce", which includes millions of shoppers, we got specific. We targeted people who were admins of Shopify pages, members of 'SaaS Growth Hacks' groups, and showed interest in competitors like WooCommerce. The results were immediate because we were speaking directly to their problem, in the places they were already looking for solutions. The message was hyper-relevant.

Here’s a simple proccess to help you figure this out:

Once you've tested a few of these pain-based interest audiences and have some data, you can start building Lookalike audiences. But you need to be strategic. A Lookalike of "all website visitors" is weak. A Lookalike of your "highest value previous customers" is pure gold. You should prioritise your Lookalikes in this order, starting with the highest-intent action:

• -> Lookalike of Highest Value Customers
• -> Lookalike of All Customers
• -> Lookalike of People Who Initiated Checkout
• -> Lookalike of People Who Added to Cart
• -> Lookalike of People Who Viewed a Key Page

Only build these when you have at least 100 people in the source audience, but honestly, you'll see much better performance once you have 1,000 or more. Start with a 1% Lookalike in your country, as it's the most potent, then test broader percentages if you need to scale.

You'll need to sort out your Campaign Objectives...

This brings me to your next point of confusion: bidding and goals. You mentioned that different ad sets can't use different goals with highest bidding. That's by design, and it’s a good thing. A campaign should have ONE goal. Your problem isn't the setting; it's the objective you're choosing in the first place.

Here is a brutal truth about Meta ads: If you are not using the 'Sales' (or 'Conversions' or 'Leads') objective, you are probably wasting your money.

When you choose an objective like "Reach" or "Brand Awareness," you are giving the algorithm a very clear command: "Find me the largest number of people for the lowest possible price." The algorithm does exactly what you asked. It seeks out the users in your targeting who are the cheapest to show ads to. And why are they cheap? Because they never click, they never engage, and they absolutely never buy anything. Their attention isn't in demand from other advertisers, so Meta sells it to you for pennies.

You are actively paying the world's most sophisticated advertising machine to find you the worst possible audience for your product. It's madness.

Awareness is a byproduct of making sales, not a prerequisite for it. The best awareness you can get is a happy customer telling their friends about you. That only happens through conversion.

So, for all your campaigns—ToFu, MoFu, and BoFu—your objective should be set to whatever your ultimate business goal is. If you're an eCommerce store, it's 'Sales'. If you're B2B, it's 'Leads'. This tells the algorithm, "I don't care about cheap impressions. Go into my target audience and find the specific individuals who have a history of actually buying things or filling out forms, and show my ad to them." Yes, the cost per impression (CPM) will be higher. But the cost per result (your CPA) will be dramatically lower because you're fishing in the right part of the pond.

This is why your ad sets all have the same goal. The Campaign has one objective (e.g., Sales), and every ad set within it is a different audience you're testing to see which one is most effective at achieving that *single* goal.

As for bidding, just leave it on "Highest volume" (or whatever the default is now) when you start. Don't try to set a Cost Per Result cap. You don't have enough data to tell Meta what a good cost is yet. Let the algorithm run for a week, see what your average CPA is, and *then* you can consider setting a cap if you need to control costs. Setting it too early will just strangle your campaign before it has a chance to learn.

You probably should build your MoFu & BoFu audiences first...

Retargeting is where the easiest money is made. These people already know who you are. They're warm. All you need to do is remind them you exist and give them a good reason to come back and finish what they started. Your MoFu and BoFu campaigns handle this.

Your MoFu (Middle Funnel) Campaign is for people who've kicked the tyres. They've visited your website, watched 50% of your video ad, or liked a post. They're interested, but not convinced. Your ads to this audience shouldn't be the same as your cold ads. Here, you use social proof (testimonials, reviews), handle common objections, or show the product in action in a different way. You're building trust.

Your BoFu (Bottom Funnel) Campaign is for the hottest prospects. They've added to cart or initiated checkout. They were *this close* to giving you money. Something stopped them—the phone rang, they got distracted, they had second thoughts about the price. Your ads here need to be direct. Remind them what they left behind. Maybe offer a small discount or free shipping to get them over the line. Create a sense of urgency. This audience is small but incredibly valuable.

A big problem many people have is not knowing how big their retargeting audiences actually are. You can find this in the 'Audiences' section of Ads Manager, but here's a little calculator to give you a rough idea of what you're working with.

This is the main advice I have for you:

So, let's put it all together. Forget the confusing mess you're in now. Here is a simple, clean, and effective campaign structure that you can build today. This is the exact foundation we use for the vast majority of our clients, whether they're in eCommerce selling women's apparel or offering high-ticket B2B services.

This structure gives you complete clarity. You'll know exactly how much you're spending to find new customers versus how much you're spending to convert existing interest. You can test different creatives and offers for each audience segment and quickly identify what's working and what's not. It turns a confusing mess into a logical, scalable system.

I know this is a lot to take in, and the truth is, while the strategy is simple in theory, the execution can be tricky. Getting the ad creative right, writing compelling copy that speaks to the 'nightmare', and managing budgets effectively day-to-day is a skill in itself. I remember one client, a medical job matching SaaS, was struggling with a £100 cost per user. By implementing this exact structure and refining their messaging, we were able to reduce their CPA to just £7. That's the difference between a failing business and a rapidly growing one.

This is why many businesses, even after they understand the framework, choose to bring in an expert. It frees them up to focus on running their business, knowing their ad spend is being managed effectively to drive real growth, not just cheap clicks.

If you'd like to go over your specific situation and see how this framework could be applied to your business, we offer a completely free, no-obligation strategy session where we can audit your current setup and provide some more tailored recommendations. It's often the quickest way to get clarity and stop wasting money.

Regards,

Team @ Lukas Holschuh