Often we see people promoting their businesses saying they can get you insane Facebook Ads ROAS (Return on Ad Spend) numbers when you use them for your ads. But is it really possible?
In certain circumstances, yes, but as the old saying goes, if it’s too good to be true…
In order to better understand this, we need to look at some of the basics of how Facebook Ads work.
First, Facebook changes all the time. What worked one day may not work the next day, so we take our reporting in larger weeks or month long segments to see performance over a longer period of time. It’s easy to find high ROAS numbers for a short period of time, but more difficult over longer periods.
Second, as you spend more on Facebook Ads, ROAS typically begins to drop. This is why scaling campaigns to spend more can be difficult. It’s easier to find high ROAS numbers for smaller spends, but can be more difficult with larger spends.
Third, different campaign types can have higher Facebook Ads ROAS because of the different conversions they’re measuring. For instance, if you’re tracking purchases, the Average Order Value (AOV) can have huge impact on your ROAS. Whether it’s $30 or $300, you can see a larger difference in ROAS over time. Also the time to purchase is typically longer on a higher dollar purchase which can mean showing a user more ads (frequency) to get them to convert.
Also, if your conversion event is a lead or sign up instead of a purchase, your ad costs will be a lot less and it may be a lot easier to get a lead which means you’ll get more leads at a lower cost which equates to a higher ROAS. Return on Ad Spend is usually associated with a purchase, but if you assign a dollar value to a lead, then that also counts as ROAS.
Fourth, usually high ROAS comes with strong creative, copy and offer. Both of which are unique to your brand and can’t always be replicated from brand to brand.
Fifth, the audience to which you’re marketing can make a huge difference. Obviously, it’s easier to get a high ROAS to a warm or hot audience than a cold audience. Retention campaigns for a consumable product that people want every month or so can bring huge ROAS, as can retargeting cart abandoners, but prospecting for new customers realistically may not bring the kind of ROAS they’re telling you about.
In addition to reviewing ROAS over time, we also like to look at a blended ROAS that includes ALL campaigns to truly get an accurate overview of performance.