Social Media

18 Ways to Optimize Your Facebook Return on Ad Spend (ROAS)

Driving results home from Facebook ads is always great but optimizing your return on ad spend (ROAS) is the tricky bit. Dive into these 18 tips to optimize your Facebook Ads ROAS

Masooma Memon Masooma Memon on September 14, 2020 • 17 minute read

Sure, investing a well of cash into Facebook ads will yield some results sooner or later.

However, what’s more efficient is maximizing the performance and cost-efficiency of every ad campaign in order to drive better results for less money. Sounds like a dream, right?

So how do you actually optimize your ad spend?

In this post, we talked to a few dozen paid marketing pros to find out the best ways for optimizing ROAS on Facebook.

First, some of the basics:

Let’s dig in:

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What is Facebook ROAS?

Facebook’s return on ad spend is the revenue that your Facebook ad campaigns generate. It’s not the amount you invest in ads. Instead, it’s the results you drive home from the amount you spend.

How Do You Calculate Facebook ROAS?

Find out your Facebook ad spend by dividing your Facebook ad revenue by the amount you’ve spent on your Facebook ads. So, your ROAS driving formula looks like this:

Facebook ROAS = ad revenue/ad spend.

For instance, let’s says you’ve injected a sum of $20,000 and reaped $100,000 in new sales. Your ROAS, in this case, will be 5x.

For instance, let’s says you’ve injected a sum of $20,000 and reaped $100,000 in new sales. Your ROAS in this case will be 5x.

What’s a Good Facebook ROAS?

A good Facebook ad spend depends on numerous factors including your marketing goal, industry, and more. So having a number to look up to is futile. However, knowing the average ROAS is a good way to set a benchmark for yourself.

But what’s the average ROAS you should look up to?

Over 30 respondents who we surveyed share 6-10x is their average return on ad spend. A close majority also say 4-5x is their average ad spend. Only about 5% say that their average ROAS is greater than 80x.

Average ROAS graph

18 Ways to Optimize your Facebook ROAS

Ready to optimize your ad spend on Facebook? Instead of wasting time in trial and error to figure out what works, try these proven tips:

1. Create a marketing funnel
2. Run dynamic ads
3. Make sure your ad solves your audience’s problem
4. Use Click-to-Messenger ads
5. Understand your target audience
6. Understand which ad format suits your audience
7. Keep testing
8. Send your customer a thank you email
9. Retarget your audience
10. Make sure your data is accurate
11. Monitor and track your data
12. Use dayparting
13. Create a lookalike audience
14. Capture leads
15. Find out your best performing ads
16. Add FB Pixels to your toolkit
17. Optimize campaign for a conversion-based goal
18. Set up conversion tracking

1. Create a Marketing Funnel

“Create a remarketing campaign that targets website visitors from key pages, cart abandoners, or full video views,” says Digital Third Coast’s Kylie Moore.

“Next, leverage cheaper CPMs from broad lookalike audiences, which you will use to fuel your remarketing traffic with ready to convert customers.”

2. Run Dynamic Ads

Finn Cardiff of Beachgoer shares another tip to optimize your Facebook ROAS: “Run dynamic ads so your potential customers can view unique ads based on the browsing activity on your site.” Cardiff also confirms, “This has worked for us.”

3. Make Sure Your Ad Solves Your Audience’s Problem

It’s essential your ad resolves your target’s pain point. Andrew Schutt of Schutt Media says, “call out your audience’s pain points first thing in the ad. As a result, your cost-per-conversion will drop and you’ll be getting more bang for the same buck.”

Blink SEO’s Sam Wright also notes, “the vast majority of campaigns fail because they focus on telling their audience about a product or service, rather than helping them solve a problem. No amount of audience targeting or clever delivery can make up for bad positioning.”

The take-home message? Work on your positioning, making sure your ad is addressing a genuine pain point.

4. Use Click-to-Messenger Ads

James Cooper of Convoboss advises, “use Facebook Click-to-Messenger ads whereby the call-to-action is ‘Send Message’, driving users into a conversation with a chatbot — this can increase ROAS by 3-5x over that of click-to-website ads.”

5. Understand Your Target Audience

“The best tried and tested tip to maximize your ROAS is to know your target thoroughly,” opines Srish Agrawal of A1 Future Technologies Pvt. Ltd.

This helps you “make sure your ads resonate with your target audience,” says EffortlessInsurance.com’s Melanie Musson. Because, “what works for one target audience may not for another, so learn your target.”

Agrawal echoes this sentiment: “your targeting can make or break your ad campaign, and this is no myth. It all depends upon the kind of audience you are targeting and whether you know them precisely or not.

Craft hyper-targeted campaigns based on Demography, their Interests, Brand Selection, and Habits.

These personalized layers could get you smaller but more filtered audiences. This refined chunk of audience is more interested in your product and is more likely to buy it, thus giving your ad spend an accomplishment.”

Leather Depot’s Dan Serbanescu adds to this: “you should try to reduce the audience size as much as possible, especially in the beginning. Combine at least 3 interest categories to make sure you are pinpointing the right people.”

“For example, if you have a cooking blog or are selling some type of kitchenware for amateur cooks, you will probably want to target people interested in Gordon Ramsay.”

“However, he is a pretty big celebrity that is famous for more than being a chef. He is also a television personality and a successful businessman (so people may have other reasons to look him up). Adding only him as an interest will not suffice for your audience, you will need to involve other factors as well, like a famous cooking blog, cooking recipes, or even another famous chef.”

inSegment’s Meghan Kearney further adds, “I would suggest targeting the area of your business and adding a 25-mile radius, and layering that location targeting with a specific age range you would like to target. I then would suggest adding detailed targeting and would layer specific interests with another targeting criteria, such as field of study, education, etc. “

“Typically, when setting up campaigns, I will create a national campaign within a close radius of the business. An International campaign is set if the product has an international clientele and a retargeting campaign in which you can target people who have visited a particular page of your website. Targeting the right audience is the best way to find high intent Facebook users and optimize ROI.”

Ben Arndt from DUNK Basketball shares his company’s example as well: “We know through analytics and sales data that our key market is 18-49 males, who like basketball, and are located within a set of 5 of Australia’s capital cities.”

“When we run a campaign on Facebook, we’ll specifically target this group and nobody else. This laser focus ensures optimal spend on ad spend and generally generates a minimum 5x return.”

In short, “if you don’t do the proper research, you could be showing your ads to people who are not in your customer audience and therefore wasting your money,” summarizes Luke Hyde of Drive Digital Advertising.

Related article: Facebook Ad Targeting: The 4 Essentials for Finding Your Audience

6. Understand Which Ad Format Suits Your Audience

“Understanding which ad format best fits your content is crucial to optimizing conversions,” outlines David Michael Digital’s David Michael.

“For example, if you have several pieces of information to communicate you might use a carousel. If you are releasing several products, collection ads might work better. Testing different formats and tracking the results is vital in optimizing your ad spend.”

So your homework: when researching your target audience and breaking down the ad campaign’s performance, go on to study which Facebook ads format is your audience’s favorite.

Editor’s note: Want to quickly tell which of your ads are performing well? Use this Facebook Ads Campaign Review dashboard to study all your important campaign metrics on a single screen.

Facebook Ads Campaign Review dashboard

7. Keep Testing

“Optimizing ROAS on Facebook requires ongoing and proactive experimentation,” notes QuanticMind’s Brian Bird.

To this end, Bird suggests “consistently refresh your ad creative” is a good idea. “Use the results to iterate, and if needed, pivot quickly.”

You can also continuously test your “ad copy, creative, promotions, headlines, audiences, etc.,” shares Mike Vossen of Vendasta.

Whether a campaign is running well or poorly, you can always test out different items within the campaign to see if you can improve on your current results,” Vossen elaborates.

“Overall, there are a few things that you should always consider in your campaign messaging:

1. Expertise – Why are you the expert & why should I trust you?
2. Value proposition – What do I gain or what am I forgoing by not taking action?
3. Urgency – Why does it matter now?”

8. Send Your Customer a Thank-You Email

Colin Little of Social Launch Marketing shares, “the one tip I have to maximize your ROAS would be to send a thank you message to 1st-time customers.”

“I personally have my e-commerce clients shoot a short thank you video from the owner to use as a post-purchase retargeting ad.”

“Also, add a nice message in your welcome email from customers and let them know about a secret deal only 1st-time customers get. This will help you snag a few extra orders to boost revenue per customer.”

“So few brands are actually thanking their new customers it gives you a great opportunity to stand out and develop a higher LTV per customer. The thank-you video ad has been wildly successful for my e-commerce client, resulting in a ROAS of 35.95 over the past few months. (see attached)”

Bonus tip: “Make sure you have win-back email campaigns that offer a free gift for returning customers 30-60 days out depending on your product type to boost your LTV on new customers even more.”

Editor’s Note: Struggling to pull different ad metrics from different sources for your eStore? Try this Facebook Ad Campaign for Ecommerce dashboard to keep an eye on all important metrics including your purchases, spend, link clicks, and more.

 Facebook Ad Campaign for Ecommerce dashboard

9. Retarget Your Audience

The reason? “It takes usually 3 times of seeing a company’s ad before it resonates enough for a conversion,” according to BoardActive’s Cierra Flythe. So, you need to “see who is looking at your ads, and retarget them with more information for a higher return rate.”

CJ Xia from Boster Biological Technology also agrees. “Targeting your campaign at the right audience is an excellent way to optimize ROAS. For this purpose, you need to go beyond basic demographics because it is important, and your ads should set to target basic demographics like gender, age, location, etc.

“Facebook Audience Insights (FAI) is the best way to target your Facebook ads because it provides vital information about your Facebook followers. From FAI, you can create your target audience by filtering through demographics and other details useful details.”

Truck Driving Institute’s Lauren Gast shares their company’s experience too: “our company has optimized our return-on-ad-spending on Facebook by honing in on our retargeting strategies.”

Gast elaborates, “In general, customers are unlikely to purchase goods or services from brands that they have only been introduced to once. Repeatedly acquainting potential customers with your company helps to build trust between audiences and your enterprise.”

“What’s fantastic about retargeting with Facebook ads specifically is that you have tons of options, such as deploying a different retargeting strategy for customers who have previously engaged with your social media than for customers who’ve visited your website.”

Megan Smith of Dosha Mat explains how to set up a Facebook retargeting campaign: “Situate yourself in the shoes of the persons to whom the re-targeting campaign will be targeted and ask why they did not convert upon their first visit to your website.”

“Is there something you can do to improve your offer to increase the likelihood that they will be converted through the re-marketing campaign? Often, users leave a site without converting because the price or delivery cost for the product or service was too high for them.”

“To help address that pain point and optimize for conversions, consider incorporating a discount or other promotion into your retargeting campaign to give these users additional incentive to convert. Making that kind of change can dramatically increase the success of a re-targeting campaign.”

10. Make Sure Your Data is Accurate

“The data needs to be accurate,” highlights John Short of Compound Growth Marketing. “Facebook has stepped up their game over the last two years in being able to identify users who are most likely to convert.”

“They did this because they had to, Google is a demanding capture, so they are easily able to identify potential customers for you. On Facebook, because people are browsing not searching, there is no intent data. The more accurate the data is that you provide Facebook, the more likely they are to accurately go out and find users like the ones who have already converted on your site.”

11. Monitor and Track Your Data

Jonathan Aufray of Growth Hackers suggests, “to optimize your Facebook RoaS (Return on ad Spend), you want to continuously monitor and track your data. This way, you will be able to delete your low performing ads, optimize the ads that are doing ok, scale, and double down on the ads that are performing well.”

So, you shouldn’t only ensure your data is correct, but keep monitoring it regularly.

12. Use Dayparting

“One tip for optimizing your return-on-ad-spend on Facebook is to make sure you’re using dayparting if you have any time-sensitive offers,” adds The Advisor Coach LLC’s James Pollard.

“For example, I’ve seen a lot of people run webinar ads 24/7 even though their webinars are only available during the day,” Pollard continues.

“People are much more likely to take advantage of a time-sensitive offer if it’s in the near future. So, if a webinar is running at 11:00 a.m. and 4 p.m. every day, you can get a big boost in ROAS by only showing the ad during the day.”

13. Create a Lookalike Audience

Meara McNitt of Digital Marketing Miami says, “arbitrarily building an audience will never be as accurate as using actual client data. However, “by using a Facebook Pixel or email list to create lookalike audiences (ideally 3%), you essentially create a perfectly developed buyer persona rather than trying to create one yourself using demographic and behavior details. “

“You should use those details to further refine this lookalike audience based on any specific targeting, such as parents or online shoppers.”

Socially Found’s Rob Sanders also adds “the key to success will become apparent as you create custom audiences based on the performance data Facebook has at its disposal.”

“For example, if you already have a customer list, Facebook gives you the ability to create similar audiences based on similar traits and habits that it can recognize with other users on Facebook. This is a very powerful tool and one that can help you maximize your ad spend and return on investment.”

14. Capture leads

Ampmycontent’s Dainel Daines-Hutt opines, “most people either drive traffic to a direct offer, or they drive traffic to a site with no way of interacting again, bar retargeting ads.” Daines-Hutt thinks of this as “madness” though. Why?

Because “if you capture their email you can then:

  • Improve your chances of making a sale
  • Make repeat offers
  • Make new offers
  • Promote new content to them, etc.”

The idea is “to drive low-cost traffic to high converting content, that then captures the lead. This is how we get a $22:1 ROI promoting content to cold audiences, using this exact same method. We pay for front end traffic and use the email to sell. (As well as retargeting etc to further boost sales).”

15. Find Out Your Best Performing Ads

Abdul Aziz of Arcs & Curves DMCC has another suggestion for improving your ROAS: “Use Facebook’s Dynamic Creative feature to test your brand’s creative assets & find out the best performing ads.”

“You can test assets like creatives, copy, etc to find the ad combination that resonates best with your audience.”

Here are the steps to get started with Dynamic Creative:

1) Upload the different ad components you have. These include images, videos, titles, descriptions, call-to-actions, etc.

2) Set up your campaign while making sure the ‘Dynamic Creative’ button is on.

“Let Facebook use its algorithm to test various ad combinations by mixing copies, images, and other assets based on user behavior towards your ads. Just FYI – Dynamic Creative is NOT the same as Dynamic ads, so be careful while setting your ads up.”

Related article: The 13 Most Important Facebook Ads Metrics for Measuring ROI

16. Add FB Pixels to Your Toolkit

“Adding the Facebook Pixel to your website can be a powerful strategy to boost your ROI on the platform,” recommends Breadnbeyond’s Andre.

In fact, Rameez Ghayas Usmani of PureVPN goes on to say, “for a marketer who is running Facebook ads, Pixel means everything.”

“Facebook pixel is not just a targeting or tracking tool, it does much more than that. This means that the user doesn’t have to login or come directly from Facebook to be counted. They can come days, months, years after their last visit to Facebook, and still be considered by the pixel.”

“The Facebook pixel is more efficient at tracking conversions than cookies because cookies are restricted to a browser. They can’t track a user across devices or browsers. And mostly longer conversions are more likely to be cross-device.”

What’s more, Oentoro explains, “this tool can be your solution for all the basic things you need to optimize in the ads, from measuring cross-device conversions to creating custom audiences from website visitors. Facebook Pixel will trigger and report your website visitors’ interactions.”

“This way, you’ll know when a customer performs an action after they found your Facebook ad. By all means, it makes sure that your ads are seen by the people who most likely are interested in your brand and take your desired action. That’s how you get a better ROI.”

17. Optimize Campaign for a Conversion-Based Goal

“When creating Facebook campaigns that drive revenue, it’s essential to optimize your campaign objective for a conversion-based goal,” suggests ClickThrough’s Lachlan Kirkwood.

“By selecting a frequently occurring conversion event, it allows Facebook’s ad algorithm to quickly optimize and deliver the best results. For example – if you’re a relatively new e-commerce store, your conversion objective should be an ‘add to cart event’ as it will acquire more conversions that a ‘purchase’ event. The faster an ad set trains through the learning period, the better ROAS it will produce.”

18. Set Up Conversion Tracking

“Make sure you have conversion tracking set up,” says Daniella Pozzolungo of PupDigital’s. “If you are an e-commerce store this is much easier to report on with the Facebook Pixel. If you aren’t an e-commerce store, you need to know your numbers.”

Know exactly what a lead is worth to you, your conversion rate from lead to customer/client. Once you know these numbers, you can test various audiences and ads to see which will eventually generate the most ROAS for you. To optimize, remove any low ROAS ads or ad sets, and always test new ads or ad sets to see how they perform against your goals.”

Wrap Up

Ready to improve your Facebook return on ad spend? With these proven tips, you’ll see positive results in no time.

But keep in mind what Coffey & Tea’s Meg Coffey says, “Learn to commit to the campaign and stop fiddling.” Make the changes that you want to experiment with, but let them show results before you go fiddling again.

About the author
Masooma Memon
Masooma Memon Masooma is a freelance writer for SaaS and a lover to-do lists. When she's not writing, she usually has her head buried in a business book or fantasy novel.
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