“Facebook purchase ROAS is the ultimate success metric for your Shopify store on social media.”Silvia Myers
Facebook ads can be a painful journey of trial and error, not to mention a costly one. There is no such thing as an overnight success.
Facebook ads require experience to understand, and if done right, they can seriously help your business profit.
ROAS is short for return on ad spend. Don't know what that means? That's okay.
By the end of this article, we'll make sure you understand not only what is Facebook ads ROAS, but what is a good ROAS for ecommerce Facebook ads. Keep reading to learn more.
Table of contents
What Is Facebook Ads ROAS?
ROAS, return on ad spend, is a marketing term. Return on ad spend simply is a calculation comparing how much you spent on your ad to how much money you made because of the ad.
ROI, return on investment, and ROAS are not the same thing. This is because your ROI puts into consideration all investments made in your business. ROAS is looking at only one ad at a time.
How Is ROAS Calculated?
Once you've built your website and created a Facebook business page, you can install something called a Facebook Pixel. A pixel is essentially a tracking code attaching your ad account to your website. It helps Facebook measure any clicks or conversions that move from your ad to your website.
The equation for ROAS is as follows:
ROAS($)= Ad Revenue($)/Ad Spend($)
A high Facebook purchase ROAS means that your advertisement brought in a lot of website conversions and profit and ultimately was worth the cost. A low ROAS means your ad isn't bringing in much money and might be worth changing or terminating.
An average ROAS for Facebook ads is 4:1. This means for every dollar spent on an ad, you earn four in return. At the very least, a good ROAS should bring back exactly what you spent or more.
A ROAS of one means for every dollar spent, your ad earns you a dollar back. Essentially, you're breaking even.
A ROAS greater than one means you are bringing in more profit than you are spending on your ad. As mentioned, the higher the ROAS, the more profitable your ad is.
A Facebook purchase ROAS less than one means you are losing money on your ad. You are spending more than you are profiting. This could stem from targeting the wrong audience, investing too little, poor landing page experience, poor timing, and more.
Below we'll discuss some Facebook ads ROAS tips to avoid a ROAS less than one.
Six Things To Know About Facebook Ads Purchase ROAS
Your Facebook ads are an experiment. That doesn't mean there shouldn't be a strategy for them. Below are six tips to help you avoid losing a lot of money and boost your Facebook Ads ROAS.
1. Have an Objective
When you are creating a Facebook ad, you need to consider your marketing funnel. Your marketing funnel is the journey you envision for your customer to get from ad to conversion.
For example, you might want to make a sale on a certain item. Your marketing funnel can click ad, view landing page, read the copy, add to cart, purchase, thank the customer.
Having an objective will make it easier for you to tailor your ad. Consider which image and copy are best for your ad. Also, consider who you want to see the ad.
Facebook has some of the best audience filtering tools for ads. Leverage them.
2. Understand Your Target Audience
Let's talk a bit more about filtering for your audience. The most effective way to have a high Facebook purchase ROAS is to know your audience.
Your ad needs to resonate with the pain point of your target customer. Otherwise, you are likely to get many impressions (people who viewed your ad), but not many clicks.
Once you know who you want to address, you can create a custom audience in the Facebook Ads Manager. You can target based on demographics, interests, behaviors, education, income, and more.
3. Run Retargeting Ads
If you've installed a Facebook Pixel, it will begin to accumulate data on who has visited your website. Once your pixel has at least 1,000 visitor hits, you consider running a retargeting ad. Retargeting ads target people who have already expressed interest by visiting your site.
You've probably been targeted at some point in your life. You were looking at a product and boom. Suddenly it appears in a sidebar on a webpage.
That's retargeting. Retargeting is powerful since it is reminding consumers of you. The more they see your products, the more likely they are to make a purchase in the long run.
4. A/B Test
An A/B test is an experiment. You run two versions of nearly identical ads, testing one variation at a time. Most advertisers test the image, ad copy, or landing page.
Facebook ads already has an A/B testing feature that you can select when creating your next ad. It will guide you through the process.
5. Keep Accurate Data
Google is a search platform. This means it is able to track purchase intent by analyzing search bar queries.
Facebook is a browsing platform. This means Facebook does not track purchase intent. As a Facebook advertiser, you need to make any data input into your business manager accurate and up-to-date.
Doing so will help Facebook feature your ad to the right people.
6. Create a Lookalike Audience
From your Facebook Pixel, you can create a custom audience, for example, similar to site visitors. You can also input data based on your existing customer base. This is like creating the perfect buyer persona.
Since these customers already show purchase intent, you're likely to maximize your Facebook ROAS.
Maximize Your Facebook ROAS
Improving your Facebook ads ROAS requires time and patience. Following our six steps above should make the process simpler. It should also protect you from losing money to improper advertising techniques.
Know your audience, create click-worthy content, and track data. These are the keys to improving your Facebook ads ROAS.
Ready to boost your ROAS? Let's connect today and get started!