What is ROAS? Maximize Your Return on Facebook Advertising Spend

When it comes to customer acquisition, few platforms make the process as simple as Facebook.

By using Facebook advertising, businesses can literally connect to a potential half of the planet’s population! In addition, everyone is using Facebook, so it can be an excellent tool to maximize your RoAS.

To find out more about what RoAS is and how you can increase your profits through digital advertising, read on.

What Is RoAS?

RoAS is an acronym for return on ad spend. You might wonder if this is the same thing as ROI or return on investment, and while RoAS is linked and often helps maximize ROI, RoAS is directly related to advertising.

Simply put, this is how much you make from a product or service in response to how much you spend on a given ad campaign.

For example, you can calculate your ad spend by taking what you earn in response to the ad or ad revenue and then dividing that by the ad’s cost.

If you run an ad and it earns you a total of $5,000, you only spent $1,000 to run the ad, which divides into 5 times. Multiply it by 100 to get your RoAS percentage, and you can see that that is an incredibly successful ad with a 500% return or a 5:1 return.

Essentially, you always want your ad spend to be as small as possible versus your returns.

How Do You Maximize Your RoAS?

Facebook is an incredible platform for marketing. In fact, we detailed 31 statistics that dive into just how good it is, but you need to use it right.

Advertising a product or brand has evolved a lot alongside the internet. Today, 70% of internet users say they want to learn about products through content instead of traditional advertising methods.

Consumers today don’t engage with static ads unless they really stand out, so companies need to get creative.

So how do you get creative, and what is the best way to put out really effective content that will improve sales?

There are three important elements when it comes to maximizing your RoAS:

1. Reduce Cost 

Cost is the first thing you should examine when figuring out how to improve your ad spend and return.

If you find yourself paying $1,000 for one type of ad on a platform and don’t see a good return on that, you should consider using other platforms or varying the type of advertising.

We mentioned Facebook for being one of the largest platforms, but you can also purchase advertising on Google, TikTok, LinkedIn, and Amazon, to name a few. Find the platform and ad type that works best for you, and the cost will start to lessen in relation to the results.

2. Review and Update Your Target Audience

Ads have built-in targeting features, and you can set these to automatic. The issue with allowing it to choose your audience automatically is you learn less about them, and you likely hit some people who won’t become customers.

With targeting, you can choose an audience according to location, age, interests, and even their web history if they share it.

What this means is that if you have a website, you can choose to target people who have visited your site and potentially not made a purchase the first time.

This act of warming leads is incredibly effective, so use targeted audiences to your full advantage by playing around and learning more.

3. Update Your Campaign

As a result of your work with cost and audiences, you should be utilizing different ad types and reaching new customers.

With that in mind, you need to be refreshing your ad campaign. Check the analytics to see what works and recreate something similar to test what works best. 

Many platforms like Facebook allow you to run multiple campaigns at once so you can get your results side by side and see what your customers like best.

Ready to Increase Your RoAS?

This post has been a whistle-stop tour of the benefits and ways to increase your RoAS with services like Facebook advertising. 

But if you have more questions or would like to speak to an expert on how you can make the most of your ads, give us a call.