How to improve your ROAS from Facebook Ads

Is your ROAS (return on ad spend) lower than you want? Has it recently dropped?

We have developed a simple method of diagnosing and fixing poor ad performance that has helped skyrocket our clients' performance. If your ad-account optimisations aren’t working - it’s likely caused by one of these three problems - and they are all things you can fix outside of your ad account!

Besides account-level optimisation (bids, audiences, creative testing) - poor ROAS is always caused by one of three things:

1. Low conversion rate

2. Low average order value

3. High cost per click

So the first thing you should do is look at your numbers and figure out which of these is the culprit for your lack of success. How do each of these key metrics compare to the previous period, or to last year? I'll address each one and how you can fix it below.

1. Low conversion rate.

To make digital ads work you need between a 2% and 5% conversion rate - if your products are extremely high ticket you can maybe get away with 1%.

Low conversion rate can be caused by a poor offer - ie. your product or price point aren't appealing, or by issues with your website. If you think your product and offer are fine - then attack your website and invest in some 'Conversion Rate Optimisation'.

Low conversion rate can also be because you have low quality traffic, so tweaking your audiences can help improve things here.

2. Low average order value -

There are lots of fixes for this - increase your prices, add bundles on your site, or nudge people with shipping offers or freebies when they spend more.

Shopify has great apps to nudge people to spend more - One Click Upsell from Zipify is one we love!

3. High Cost Per Click

This is caused by a mixture of factors.

Partly it's the cost of reaching that audience on the platform (CPM) - premium consumers are more expensive to reach for instance.

But it is also often caused by poor creative. If you have incredible creative that compels people to take action - your higher click-through rate will lead to lower CPCs.

The other benefit of good creative is it can actually help with conversion rate by motivating the buyer more.

So there you have it - a simple framework for diagnosing issues with your ROAS that can help you get back on track and know what to focus on!