According to research by Databox, it is found that more than 60% of companies want to increase their investment in the performance of their ad campaigning in 2022. As they stated, Facebook and social media platforms are leveraging great epitome in success and valuable results for brands. $84M sales brands have made with advertising on social media platforms.
Facebook is one of the most iconic platforms for doing social activities on it. From its initial till now the social media giant has earned a high incline in the growth percentage of users and its usability. The company started in the year 2010 and now in 2023, it transform into META (a parent company) including other giants like Instagram and Whatsapp in it.
Why do we talk about Facebook today? Do you have any idea about it? One primary reason would be its strong impact on almost every sector of business. The company has deeply connected with its users and gives them a way to connect with their friends and connections. In the nature of business, this connection alignment effectively counts. This mutual sharing about likings, daily activities, latest happenings, etc would act as a catalyst for businesses that want to use advanced technology like AI and ML to bring good decisions from it. The technology works in sync with analytic tools provided by the Facebook platform.
Facebook Platform has given a great spectrum of tools for analyzing the nature of users. That understanding of users’ needs would incline businesses to think on what is their user’s type and how to serve them. When the business meets with user’s needs, then the business profit will eventually grow. That’s the whole purpose of Facebook ads to improve the performance marketing of a business or brand.
So in this blog, we are going to understand one important factor in Facebook Ads i.e. ROAS, return on ad spend. What is a good ROAS and how the performance marketing of any brand can improve its ROAS? Let’s see how?
What is ROAS in Performance Marketing?
ROAS is the return on ad spend that will be decided based on how much investment you have made for advertising an ad. It will help you to make conclusions about the ad and the areas where to invest on budget.
A good ROAS helps in improving the performance marketing of your brand belonging to B2B or B2C. The ROAS can be prepared for various campaigns like display campaigns, app campaigns, discovery campaigns, and video action campaigns.
Every brand has a different sales cycle, campaign creation strategy, advertising strategy, and conversion goals. So the measure to evaluate ROAS varies with these metrics. Based on the spending the conversion rate and profit decide. So to measure good ROAS a good profit margin is the dominating factor. Ideally, a 10:1 ($10 earned for every $1 spent) ratio is considered a great ROAS for business advertising.
How to Calculate Facebook ROAS?
The Facebook ROAS can be calculated as:
Facebook ROAS= Ad revenue/ Ad spend
Suppose you have spent $10,000 with the sale of $100,000 then the ROAS for your ad is 10x. That means you have gained $10 for an expense of $1.
How to Increase the ROAS of Facebook Ads?
Every brand works in improving its performance on giant social media platforms like Facebook. As Facebook has incredible potential to improve brand vision and deliver results in time. One important metric is ROAS which will improve the sales funnel and conversion rate of ad campaigns. What are the factors that should be focused on the target audience? Mentioned below.
1. Ads should match with Audience’s Taste
The audience always loves those brand that knows what they want. Either the brand help users to solve their problems. In both, the audience connects with your brand or shows interest in it. Otherwise, the audience does not show any interest to stay on your platform.
Any tactic like brand positioning would help you out without an accurate delivery of context on what the audience is looking for.
2. Know Your Target Audience
Never throw your bulk of ideas to people. You should always know your audience in depth. A better group or narrow user target audience would be interested to buy. And you can do this by using Facebook analytical tools. Hyper-targeting is perfect for positioning your brand to potential audiences.
The performance marketing funnel for hyper-targeting focus on key areas of your audiences: demographics, interests, habits, and brand selection. How much-personalized targeting have you prepared for your audiences will give you more accurate activity of them in digital platforms.
3. Test Your Audience Data
Every brand should learn something new about their audience’s taste. In order to performance improve in return ads or ROAS you should track and analyze your audience’s behavior. Track and monitor their activities on social media and other platforms, find the areas where you are lacking, and optimize your ad campaigns. While optimization of your ad campaigns, switch off or eliminate unwanted or underperformance ads to manage the cost of your ad campaign.
After optimization, you should keep testing on results of your ad. The Facebook ad dashboard gives a better analysis of ad campaign posts like headlines, promotions, audiences, and ad copy.
4. Specific Target Audience
Suppose you have an e-commerce brand for clothing like Myntra or AJIO. These brands have a strong presence in the clothing and fast fashion industry. If your brand has a similar fashion and you want to utilize Facebook ads for performance marketing of your brand to target specific audiences. Then you should prepare a specific and narrow target audience campaign. That includes specific age groups, age, gender, source of income or financial status, etc to emphasize better the specific potential audience.
For international campaigns and for national campaigns; the user target needs and demand would vary. Therefore when you prepare the Facebook Ad campaign for them you should focus on what you mean to calculate with running your campaign.
Facebook tools provide specific targeting of the audience and will bring you laser-sharp results in a faster time helping to improve your ROAS.
5. Retarget Your Audience
Why retargeting your audience is good exercise? One reason could it will decline the price for conversion. When the user has a past history of visiting your platform and has satisfied with your brand aesthetics, then there would be more chances to retarget the audience again. Facebook Audience Insights (FAI) is a great tool to analysis deeper about your past audience and convey better strategies to invite them for buying this again.
6. Optimize Your Campaign
The Facebook ad dashboard gives a quick insight into the various ads run on it. In order to achieve conversion, your ad campaign should have a relative purpose. The fashion clothing brand should focus on conversion rates goal through their ads rather than on sales. The more conversion like “ Add To Cart” gives your ad maximum chances to buy rather than “Purchase”. It will increase the ROAS of the ad campaign as well.
Therefore it is a great practice to focus on how to optimize your campaign to create a great ROAS.
7. Create a lookalike audience
Multiple brands of similar branding are available digitally, therefore you can prepare a selective look-alike audience to target and achieve results in a faster time. The arbitrary list with similar fashion goals like e-commerce for clothing would help your brand to target new audiences that have similar tastes to your existing potential customers.
8. Conversion Tracking
The Facebook Ad tool gives a way to analyze the number of conversions in the ads. The number will help you to examine the performance evaluation in a better way. Facebook provides Facebook Pixel, which would help the brand to know its Ad Lead, ROAS Value, etc. You can test your number of ad campaigns and get a better analysis and vision of ad performance.
Conclusion
To improve your ROAS the performance marketing company would help you with guaranteed results. You should meet with such a company in person or connect with their brand representative. The ideal company helps you achieve results in a given time.
Verve Online Marketing is a Digital Marketing Company in India, where you can meet your clientele’s performance in the desired time. We help you to improve your revenue of ad spend and tally other metrics as well. We maximize your ROAS and optimize the CAC value to give better conversion rates for you.
