A common question from advertisers is, “Why isn’t Meta pushing more spend to ads with ahigher ROAS?” The answer lies in Meta’s focus on estimated action rates and how itsalgorithm prioritises user experience over isolated ad performance. In this white paper, we’llunpack how Meta’s system works and explain why high ROAS doesn’t always guarantee more ad spend.
Understanding Estimated Action Rates: The Core of Meta’s Auction System
Every time you publish an ad on Meta, the platform runs an ad auction. At the heart of this process is a prediction model that calculates your ad’s estimated action rate (EAR). This metric is essentially a prediction of how likely your target audience is to take the desired action, whether that’s a purchase, sign-up, or click-through.
Meta’s prediction system looks at the following factors to calculate your EAR:
- Bid (Budget): How much you are willing to spend per action.
- Creative: The quality and engagement potential of your ad’s visuals and copy.
- URL Destination: The relevance and quality of your landing page.
These elements are evaluated together, allowing Meta to forecast how your ad will perform against others competing for the same impression. The stronger your estimated action rate, the more Meta’s system will favour your ad in auctions and allocate higher spend to it. This explains why certain ads receive more budget even if they don’t deliver the highest Return on Ad Spend (ROAS).
Why Meta Prioritises Estimated Action Rates Over ROAS
Meta’s primary objective is user experience, which means the platform prioritises showing ads that align with user interests and are likely to drive engagement. This explains why ads with the highest EAR—not necessarily the highest ROAS—receive the lion’s share of spend.
How does this impact your account?
- The ads that drive the most spend are often those with a strong estimated action rate, even if they don’t produce the highest ROAS.
- Meta is designed as a volume/awareness tool, meaning the ads that can handle large amounts of traffic and spend will be prioritised.
This often leads to confusion for advertisers, as the ads with high ROAS typically represent efficient, low-spend campaigns. However, Meta’s system is volume-based; it pushes budget to ads that are scalable and can generate the most activity.
Why Higher ROAS Doesn’t Always Lead to More Spend
It’s important to understand that high ROAS ads are not necessarily the best performing from Meta’s perspective. The system is optimised for delivering large-scale reach, engagement, and volume of sales, rather than focusing purely on efficiency. Ads with high ROAS may be performing well, but they are not able to handle high spend. If they could, Meta’s system would allocate more budget to them.
Key points to consider:
- ROAS vs. Volume: Meta’s platform pushes spend toward ads that can scale with increased volume at the best possible efficiency. Ads with lower spend but higher ROAS might not be capable of handling larger budgets.
- Ad Prioritisation: Meta will continue to prioritise ads that drive higher engagement and volume, even if these ads deliver a lower ROAS compared to your more efficient ads.
The Consequences of Turning Off High-Spend Ads
One of the most common mistakes advertisers make is turning off the highest-spend ads in their Meta account in pursuit of higher ROAS ads. However, turning off high-spend ads triggers Meta to shift the budget to the next best-performing set of ads—ads that inherently have lower estimated action rates. This can lead to:
- A drop in efficiency, as the system reallocates budget to ads that aren’t as capable of generating volume.
- Reduced scalability, as the remaining ads struggle to handle the increased spend, ultimately decreasing performance across the account.
Meta’s machine-learning system optimises based on the potential for engagement and conversions. If lower-spend ads had the potential to scale effectively, Meta would already be pushing more budget toward them. By turning off high-spend ads, you disrupt the balance Meta has optimised for, leading to immediate drops in performance.
Key Takeaways
- Estimated Action Rate is Key: Meta’s auction system relies on predicted user behaviour, not just ROAS. Ads with the highest EAR receive the most budget because they are expected to generate the most engagement.
- Meta is a Volume/Awareness Tool: Meta’s platform is built to prioritise ads that can scale with volume. The ads driving the most spend are doing so because they can handle high volumes of traffic at the best efficiency possible—not necessarily because they have the highest ROAS.
- Don’t Turn Off High-Spend Ads: Turning off your highest-spend ads disrupts Meta’s optimised budget allocation and pushes spend toward ads with lower estimated action rates, leading to a decline in overall efficiency.
Conclusion
Meta’s platform is optimised to prioritise volume and engagement, which means the ads receiving the most spend are the ones that the system predicts can handle it—regardless of ROAS. The goal is to drive conversions and engagement at scale, not simply maximise ROAS. By understanding and leveraging Meta’s estimated action rate system, you can maintain consistent, scalable performance across your ad campaigns. If you need help optimising your Meta campaigns for scalable growth, reach out to us today. We’re here to ensure you’re making the most of Meta’s system to drive both volume and
profitability.