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    What is a good ROAS (Return on Ad Spend) for Facebook Ads?

    Posted on May 15, 2020

     

    When you run adverts on Facebook, one of the metrics it offers in its reporting is Return on Ad Spend, or ROAS. It essentially means how much money you get for every £1, or $1 depending on your currency, you spend on Facebook ads.

    So, for example, if your ROAS is ‘2’, that means you have generated £2 in revenue for every £1 you have spent.

    Obviously, for Facebook to know what revenue you have generated, it needs the information in the first place. For websites that sell products, i.e. ecommerce websites, this is fairly straightforward. Facebook’s tracking pixel can send back purchase data to Facebook, so when a sale is made from a customer who has clicked on, or seen, a Facebook Ad, it will attribute that sale, and its purchase value, to Facebook.

    For websites that don’t make sales, this is a little trickier. For example, if you’re generating leads that will be followed up by phone, email, in-person meetings or whatever, you could attribute a value to each of those leads within Facebook and it could report your ROAS based on that. So if a lead is worth an average of £10 to you, you could attribute each lead as being worth £10, and Facebook could report the revenue you generate from using ads.

    What is a good ROAS, though? Generally speaking, a good ROAS is considered to be 4:1. That means for every £1 you spend, if you return £4 in sales, you’ve done well.

    This isn’t what we’re seeing with Facebook Ads for our clients. A recent client for whom we started managing Facebook Ads saw an ROAS of 16:1 in the first week. This prompted them to leave the following feedback for us:

    “I have checked the performance of the Facebook campaigns this morning and I am amazed at how quickly we have got results!

    To only have been running the campaigns for a week or so and to see ROI of 1600% is honestly incredible!”

    Now, that sounds good. An ROI of 1,600%, 16:1 ROAS, sounds incredible when a good ROAS is generally considered to be 4:1. Yet that’s not the highest we’ve seen for our clients. In fact, it’s not even close.

    One client we manage the Facebook Ads for has an ROAS over the past month of 64.6. That means for every £1 they have spent on Facebook Ads, they have generated £64.60. Additionally, not all of the ads for this client are targeted at sales. We have some ad sets for them, which are exclusively going for video views in order to build a targeted audience for retargeting.

    However, that’s going into specifics. We don’t need to do that here. With this client, we have created a number of different ad sets, aimed at different audiences. The highest performing ad set in terms of ROAS is seeing 97.67… that’s just shy of 100:1.

    Would you like to receive £100 for every £1 you spent on Facebook Ads?

    But what if my business isn’t ecommerce?

    So, does this work for b2b (business to business) websites as well? Absolutely! One client for whom we’re managing Facebook ads is seeing leads – containing name, email and phone number – being generated for just £3.12 per lead. Again, this uses a number of different ad sets targeted at very specific audiences.

    How we do this, you might be asking, when most people who try Facebook Ads end up spending money for little or no return?

    Firstly, running a Facebook Ad campaign is easy to set up. It’s easy to get going and it’s easy to start spending money with Facebook. It’s not, however, easy to convert your spends into sales or leads. At Engage Web, we start by going into fine detail on the target audience, as targeting is one of the most important factors in a successful ad campaign. We research your target ‘Avatar’, which is your ideal customer or client. Who are they? Where do they live? What do they do? What TV shows do they watch? What magazines do they read? What problems do they face? With these, and countless more in-depth questions, we build up a picture of your ideal client or customer. This allows us to target them accordingly.

    We then use other methods to build up a retargeting list. This is an audience list on Facebook of people who are most likely to convert, whether that means buying your products, enquiring with you, downloading your brochure or whatever conversion you want them to make. It’s this retargeting list that will yield the true conversions, and make you the most money.

    We track EVERTHING. You cannot run any Facebook Ad campaign with tracking, so don’t even try. Without tracking, you don’t know how many people have done what on your website, and you can’t retarget any ads. Without retargeting ads, you may as well just throw your money in the bin.

    We use conversion targets. There’s no point running ads for clicks, or likes, or comments or shares. That gets you nothing. We run ads with specific conversions that return you results, such as for website purchases, contact form enquiries, brochure downloads or whatever you need people to do.

    We build funnels. Once someone has clicked on your ad and done what you want them to do, that’s not the end of their journey. You have paid for that lead or sale, and you need to get a decent return on your investment. What happens next? How are they followed up? What ads are they shown next? How do you maximise the value of that lead or customer?

    You may have heard this phrase before: the value is in the list. This is how we get such great returns with Facebook Ads. If you’d like to see how your business could benefit from this sort of return on investment, get in touch today.

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