Want more profit from your Facebook ads? Wondering how to improve your return on ad spend (ROAS)?
In this article, you’ll discover four ways to improve your Facebook return on ad spend.
Why Increasing Return on Ad Spend Is Important
Before diving into ways to increase your Facebook ROAS, we first need to define what exactly it is and why it’s the most important Facebook advertising metric.
ROAS is a measure of your Facebook advertising success and how profitable your advertising is. It’s the online advertising equivalent of return on investment (ROI) and the cornerstone metric that guides your decision-making within your ad account.
It’s calculated automatically in your ad account by taking the purchase conversion value metric (the value of your purchases generated from your advertising) and dividing it by your ad spend. The resulting value is a multiple.
Let’s say your purchase conversion value was $10,000 and your ad spend was $2,000. To get your ROAS, you would divide 10,000 by 2,000, which is a 5X return. So for every $1 you invested in your Facebook advertising, you generated $5 in revenue.
You can increase your ROAS through on- and off-Facebook actions. We’ll look at both of these in turn and explore how you can improve your Facebook advertising from both perspectives. You need to focus on both to get the best results from your advertising and generate the highest ROAS.
Increase ROAS via On-Facebook Adjustments
First, let’s look at the activities you can implement on Facebook to increase your ROAS.
Increasing your ROAS by reducing your cost per purchase in your ad account is correlated with improving what are called on-Facebook metrics, the primary being click-through rate (CTR).
There’s a direct correlation between the CTR of an ad, the cost per click (CPC), and the number of clicks. By increasing engagement with your ad, you can drive more people to your website for the same ad spend, which reduces your cost per link click.
In the image below, you can see that the higher the CTR on an ad, the lower your CPC, and the more people you can drive to your site for your ad spend.
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Facebook actively rewards advertisers by lowering CPC for ads with a higher CTR. The reason is that your target audience is engaging more with your ad, creating a positive ad experience.
Here are some ways to create more engaging Facebook ads to improve your CTR.
#1: Tips to Improve Your Facebook Ad Copy
You can create more engaging Facebook ad copy by improving what I call the “snap,” which is the opening sentence—the first 125 characters—of your ad copy. The snap needs to grab your audience’s attention when they start reading the ad. You want to hook them so they immediately understand the ad is for them and consume the rest of it by clicking on the Read More text.
There are three main types of ad copy snap you can use.
The first is to focus on a pain point and ask an opening question such as, “Still buying overpriced, low quality Home Fragrance products that don’t last?” By calling out a problem your target audience relates to the product or service you sell, you get them to start thinking about the problem, agreeing with your ad copy, and making a micro-commitment.
The second type of snap is benefit-focused ad copy. This involves the benefits of your product or service and the outcome your customer will achieve.
Continuing with the home fragrance example, the ad copy could talk about the transformation that occurs when people use these products—their home will smell amazing.
The final ad copy snap you can use is a testimonial, which is designed to increase social proof and trust with potential customers. This works for both cold audiences and hot audiences lower down in the funnel when used for website remarketing.
With this tactic, you write the testimonial directly into the ad copy. I recommend adding star emojis at the beginning of the testimonial, which will help grab your audience’s attention more effectively than just text alone.
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#2: Tips to Improve Your Facebook Ad Creative
The second way to increase CTR is to improve your Facebook ad creative.
The images and videos you use in your ads need to stop the scroll via a pattern interrupt. The right creative will make people more likely to click on your ad, go to your website, and find out more about what you’re positioning in your ad. Looking at the two ads below, which one would you be more likely to engage with?
Improving your ad copy and creative can improve your on-Facebook metrics and increase your ROAS by lowering your cost per purchase. It’s all about driving a better CTR, getting more people to your site for your ad spend, and ultimately reducing your cost per purchase.
Increase ROAS via Off-Facebook Adjustments
Now let’s look at the off-Facebook activities you can use to improve your ROAS. These are actions that happen on your website with the aim of improving your conversion rate and increasing your average order value.
#3: Tips to Improve Your Conversion Rate
We’ll start with how to improve the conversion rate on your website. For eCommerce businesses, the typical conversion rate is around 2%. However, with the right tactics, you could potentially get 4%-8% coming from your Facebook advertising.
High-converting sales pages can successfully move a prospect from being problem-aware to understanding you have the solution—a great offer that can’t be missed. It can then lead them seamlessly through the purchase funnel (from seeing the product, adding it to cart, and finally checking out and completing the purchase).
One of the fastest ways to improve conversion rates is to create an irresistible offer because your offer has the greatest impact on whether someone purchases.
You’ll also want to consider installing heatmap software like Hotjar to understand how people interact with your website. This will show you how far down people scroll and what elements on your web page they interact with. You can then adjust your landing page experience based on that data to improve the experience and increase the conversion rate.
#4: Tips to Increase Your Average Order Value
You also want to increase your average order value (AOV). I can’t stress enough just how important this metric is. It’s the forgotten element of the advertising equation that can take you from a 3X to 4X ROAS or a 4X to 6X ROAS just by getting people to spend more on their first transaction with your business.
The best way to increase your AOV is to use one-click upsells pre-purchase (before people get to the initiate checkout stage) and post-purchase (immediately after they purchase but before they get to the confirmation page).
An example of a pre-purchase upsell is bundling products to get a greater discount or free shipping. A potential customer will then add more products to their order to get your offer, which increases the value of their cart. As a result, the conversion value of the purchase is higher, which means the ROAS recorded in your ad account will also be higher.
The other method to increase AOV is to use a post-purchase upsell. Here you can present the buyer with a limited-time offer to add something just before the purchase confirmation page to increase their AOV.
Let’s look at an example to highlight the impact of increasing AOV.
Suppose you have a $10 average cost per purchase on Facebook. If a customer spends $30 on their first transaction buying one of your products, your ROAS is $30/$10, giving you a 3X return. For every $1 you’re putting in, you’re getting $3 back.
If you wanted to go from a 3X to a 4X ROAS, one of the best ways is to get people to spend $40 or more on their initial transaction.
So when people are looking at your $30 product, show them a complementary product or offer a discount for buying multiple products to take that AOV from $30 to $40. Because your cost of acquisition stays the same, you’ve just gone from making a 3X to a 4X ROAS and your Facebook ads have become a lot more profitable.
Increasing your AOV can be the difference between profitable Facebook ads and ads that lose money. Take the time to evaluate what you can position as pre-purchase and post-purchase upsells.
You can increase your ROAS in two ways, categorized as on-Facebook and off-Facebook actions. On-Facebook actions aim to improve your advertising by reducing your cost per purchase, and off-Facebook actions occurring on your website with the aim of improving your conversion rate and increasing your AOV.
By making the right adjustments to both on- and off-Facebook activities, you can significantly increase your ROAS.