Your ROAS Explained | Social Nucleus | Blog

Monday, June 28th, 2021

Making sure you’re measuring and analysing the correct data is vital to success when it comes to the effectiveness of your Facebook advertising campaigns. The big one we marketers need to keep an eye on, is ROAS. Keep reading to learn what exactly ROAS is, why it’s important, how to calculate and how to improve it.

What is ROAS?

 When launching a new campaign, it’s important to keep track of certain key performance indicators (KPI’s), in order to assess the campaign’s effectiveness and make improvements where needed.

Most people like to monitor click-through rates (CTR), conversion rates, and cost per conversion and whilst these metrics are meaningful on their own, collectively they don’t give you an understanding of the overall success of your campaign.

ROAS does.

Return on ad spend (ROAS) Is the marketing metric that measures the revenue generated per pound (or dollar) spent in your campaign. Measuring this provides you with a complete understanding of whether or not a campaign is working effectively.

Your ROAS calculation is pretty straightforward. It is simply the cost of your campaign revenue divided by the cost of the campaign.

ROAS is more often than not expressed as a ratio. For example, if you generated £400 in revenue from your Facebook Ads campaign, and it cost you £100 to run, your ROAS would be 4:1, conveying £9 for every £1 spent. Are you keeping up?

Why does ROAS matter?

Tracking your campaign ROAS is one of the easiest things to do, but if you’re wondering why bother, let us explain.

Without tracking your ROAS, you might end up making decisions based on limited information. You should always treat revenue as the ideal outcome for all of your campaigns unless of course, you are focusing on raising brand awareness. Without correctly calculating and tracking your ROAS, you won’t be able to keep track of how much revenue each campaign is generating.

Tracking your ROAS also helps you analyse you’re the performance of your campaigns over time more effectively. You will be able to see if said campaign is performing effectively and whether you should renew the campaign or not.

Overall, ROAS helps you determine which campaigns are truly driving strong results and how you can improve upon your future campaigns.

4 ways to improve your ROAS

Optimising your ad spend is easier said than done and requires a lot of time and attention. However, there are a few things you can do to give yourself a head start when it comes to improving your ROAS.

  • Implement a marketing funnel

Marketing funnels are a great way to raise your ROAS. Remarketing efforts and creating lookalike audiences (to name a few) are great ways of implementing a funnel marketing system to your campaigns. Understanding where each ad set falls in the funnel and what each ad needs creatively to fit is sure to see an increase in your ROAS.

  • Run Dynamic Ads

Dynamic ads are a great way for potential customers to view unique ads based on their browsing activity on your site. It’s a much more personalised and targeted approach that We see dynamic ads bring in plenty of success for our clients and is definitely something we turn to when looking to raise ROAS.

  • Solve Problems

When it comes to your ad creatives, there are a few things you can tweak in your copy to raise your ROAS, one being solving your customers’ problems. In order to do this effectively, it’s important to understand your audience. This involves effective customer profiling and understanding their pain points so that you can target them in your ads.

  • Understand Ad Formats

One final thing that’s important to consider when attempting to raise your ROAS is your ad formats. Understanding which ad format best fits your content is crucial to converting. One way you can do this is to do your market research and lots of A/B testing!

Raise your ROAS with us

Feel like you need help raising your ROAS? Get in touch today and find out how our expert team can help grow your Facebook Ad Account.