One of the major sources of revenue for today’s businesses and brands is Facebook Ads. But advertising on Facebook is easier said than done.
Well, it’s not the actual advertising part that is difficult. Even a child can advertise on the platform with the easy-to-use tools and feature the platform provides.
The difficult part that even most digital marketers find hard to handle is ensuring that their ads are efficient. Generating sales at the lowest possible cost of ads. One way to be efficient is by optimizing your ads to maximize your ROAS.
First, here are some of the basics that we need to look at
What Is Return On Ad Spend?
Return On Ad Spend or ROAS is the revenue generated by your Facebook ad campaigns. It is a measure of your marketing efforts, the amount of money you have spent on your ads.
It is not the same as the amount of money spent on your ads.
How Do You Calculate Facebook ROAS?
It is very easy to calculate the ROAS of your ad campaign. Simply divide your Facebook ad revenue by the amount of money you have spent advertising on Facebook. The formula for ROAS looks like this:
Facebook ROAS = ad revenue/ad spend.
So, for instance, let’s say you have spent $2,000 on an ad campaign, which has yielded $10,000 in new sales. In this case, your ROAS is $2000/$10000 = 5
Why ROAS and not ROI?
ROI or Return On Investment represents the performance of the business as a whole. Whereas ROAS is specific to identifying the efficiency of paid marketing efforts.
If you have a ROAS of 5, that means you are generating 5 dollars for every dollar you spend on advertising. This information is really helpful when determining actionable measures to improve your marketing efforts.
What is a good ROAS for your Facebook Ads?
Now that you know what ROAS is and why it is a better metric when it comes to measuring your paid marketing performance. The next natural question that every social media marketer will ask is “What is a good ROAS to have?”
To be honest, the answer to this question is quite tricky. The reason is, ROAS varies significantly between industries and niches, even depending on what campaign your running your ROAS may vary.
This is a tough question to answer. A good ROAS varies significantly across industries, platforms, and even campaigns. Let us give you some examples:
Case#1: If you are running a brand awareness campaign, the goal is to get your business in front of a potential target audience as possible. The campaign goal is about outreach and awareness, not selling.
In this case, you will obviously have a very low ROAS, as there are no paid conversions at all.
Case#2: Let’s say you are advertising for a real estate company with a very long, and we mean loooong conversion cycle, then your ROAS will be very low until there is a conversion. Compare this to a women’s accessories brand. They probably have a ROAS of 6 to 10 depending on their product, demand and other factors.
As you can clearly see, ROAS highly depends on the type of campaign and the industry. That said, an average ROAS that we think and generally accepted as good would be anywhere between 3 to 10.
This is a rough guesstimate. Again, what you need to aim for will depend on your business and the niche you are in. But, if you have a ROAS of 3 and your business is doing just fine doesn’t mean you have to stop there; always aim to improve your ads to reach for a higher score.
With the basics out of the way, let us now jump in and look at 5 ways to increase the ROAS of your Facebook ad campaigns by optimizing them.
5 Facebook Ads Optimization Strategies To Increase ROAS in 2023
1. Choose the right goal and objective for your ad campaign.
This is the first and foremost step you have to take before starting a campaign. Get a clear idea of the objectives from the get-go. Ask yourself what you want to achieve through the campaign. To make it easier for you, Facebook has a chart on all available objectives, which can help you decide what to do.
Facebook’s campaigns fall under three broad categories. Here is a list of the campaigns and their corresponding goals:
You have to choose the type of campaign you want each time you set up a new Facebook ad campaign, this allows Facebook to align it’s powerful algorithm to deliver the best possible results.
Deciding the right objective will ensure that your marketing dollars are not wasted and you achieve the expected results with minimal effort and maximum efficiency and improve your ROAS overall.
2. Identify and understand your target audience
The next step is to identify and understand who you are advertising to – Your target audience. If you have already identified them and optimized your ads accordingly but still not seeing improvement in ROAS. Then it could be because you are not addressing your audience’s pain points through your ads.
If you are in the fashion niche selling accessories, you launch an ad that screams, “Buy now!” “Don’t miss out” at your audiences. It simply isn’t going to work.
The fact is many businesses, and social media marketers are too busy TELLING PEOPLE TO BUY their products rather than EXPLAINING WHY they should buy their products over their competitors
Understand your audience, not just their demographics but also their pain points. What motivates and captivates them? Use that to your advantage when selling or marketing your brand.
Weave your product’s USP into your ads and show them what makes YOU the superior brand compared to your competitors.
Master this, and you are already well on your way to seeing higher ROAS for your Facebook ads.
3. Leverage Lookalike audiences.
Leveraging a Lookalike audience is much more rewarding and advantageous than you can imaging. Lookalike audiences are created from existing customers who have previously interacted with your brand.
Related Article: 10 Tips to Improve Targeting For Facebook Ads in 2023
By creating a list of audiences based on your emailing list, CRM database and Facebook Pixel data, you are essentially allowing Facebook’s algorithm to create the perfect ideal buyer persona for your business.
Facebook also allows you to widen the reach, allowing you to select how close in similarities you want your lookalike audience to be with respect to your uploaded list of existing customer data.
Use the wealth of information you have and target audiences similar in traits, habits and behaviours to that of your current customers. This can greatly maximize your ad spend and increase your ROAS.
4. Design engaging ads in the right format.
Your audience sees tens of hundreds of ads a day. These ads can be yours, your competitors or even from the bakery that’s selling freshly baked bread down the street.
The fact is you only have a few seconds to grab your audience’s attention. In that case, your ads need to be catchy, quick to connect with, deliver the message and pique their interest. All within 5 to 10 seconds.
This is only possible if you have well-designed ads with the right message that tap into your audiences’ pain points while providing a solution.
But all this effort is wasted if you do not have the ad displaying in the right ad format at the right placement.
Related Article: Facebook Ads Format Guide To Create Awesome Ads In 2023: Sizes And Specifications The Perfect Instagram Ads Format For Your Creatives: 2023 Sizes And Specifications Guide
To make your ads more creative, compelling and engaging, you can do the following:
Use the right media: Facebook is a highly visual platform, so take advantage by using attention-grabbing videos and eye-catching vivid images.
Draft a copy that connects and conveys: Get your audience excited about your offerings by using authentic storytelling, impressive statistics, and testimonials to boost trustworthiness and credibility.
Use the right CTAs get the job done: Facebook offers a variety of CTA, carefully choose the right one based on your ad campaign’s goal and objective. Always ensure that your CTA is consistent with your messaging.
Proper ad formatting and placement to ensure success: With the right media, great copy and correct CTA, all that’s left for you is to be at the right place at the right time. The right placement and format ensure that your ads are set up to be displayed at their maximum capacity for engagement, resulting in positive results.
Optimizing your ads for good design, great messaging, the right format, and correct placement ensures that they are poised for maximum impact. This can greatly increase your Facebook ad campaign’s ROAS.
5. Measure, test and improve.
In order to optimize your Facebook ads to improve ROAS, you must continuously monitor, track and measure your data. This way, you can spot and pick out your top and underperforming.
This way, you will be able to improve your overall paid marketing efforts. Take advantage of your top performers and scale them, analyze your underperforms, and develop optimization strategies to improve their metrics.
In some cases, there are ads that are beyond saving, draining your dollars. Delete these ads to save unnecessary spending.
Test various strategies with your Facebook ads, and change your creatives and messaging. Also, don’t forget to test various targeting parameters that Facebook offers you. This will ensure that you find the best possible way to run your ads and showcase your business, products and services. The best way to do this is through A/B testing in Facebook ads.
Related Article: 10 Best Practices For A/B Testing on Facebook Ads In 2023
A/B testing allows you to optimize your Facebook ads by comparing different versions of an ad to see which performs better. That said, you don’t have to test everything. Find out which elements in your ad impact and influence your target audience and test them to improve your ads.
All this monitoring, tracking, measuring and optimizing stuff sounds time-consuming and exhausting, doesn’t it?
Well, in fact, it is difficult and a task that requires a lot of expertise too!
That is why we at AdVize have created an AI Facebook ad optimization tool. Our tool uses AI and ML algorithms to determine your top-performing, underperforming and deadweight adsets.
Optimizing them all with a press of a button. Boost and scale your top performances, get optimization ideas for your laggards and stop your unsalvageable adset.
Easily make smarter, data-driven decisions when it comes to Facebook and Instagram ad optimization and testing.
AdVize’s algorithm is trained across multiple industries and niches. Get recommendations and actionable insights that are bound to improve your ROAS multifold.
Final Takeaways and Thoughts
While we have discussed increasing ROAS for your Facebook ads by optimizing them. The bigger picture is about delivering an amazing experience to your target audience and customers through your ads.
Tailor and optimize your ads with your customers and target audience in mind. By doing so, you can easily increase your ROAS by more than 60%. The other 40% is the technical work that our AI tool can help you with.
Facebook ads optimization is a continuous and ongoing process. Test and play around with your ads to find a sweet spot. Learn to commit to the campaign and change only the elements you want to experiment with. Based on the results, optimize them to improve your ROAS and ad experience.
We believe that the 5 proven strategies discussed in this article will help you improve your ROAS and get you positive results in no time.
If you have any tips, tricks or strategies you believe or know to increase the ROAS of Facebook ads, do let us know about them in the comments.
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