Facebook Return on ad spend (ROAS)

Facebook Return on ad spend (ROAS)

Ever wonder how your Facebook advertising is doing? Well, there’s a metric for that, and it’s called return on ad spend. Calculating this Facebook metric can allow business owners, community managers, and digital marketers to optimize their Facebook campaigns and achieve their marketing objectives better. 

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What is the Facebook return on ad spend?

ROAS stands for return on ad spend, or return on advertising spend - a marketing metric that calculates the amount of money your company gets for each dollar it spends on advertising. It is very similar to return on investment (ROI or ROMI).

ECommerce businesses and social media managers track ROAS to evaluate the effectiveness of their Facebook marketing campaigns. We recommend tracking your Facebook ROAS alongside Google ads metrics or other social media marketing channels to get a better bird's eye view of your total return on ad spending.

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How to calculate return on ad spend on Facebook?

ROAS is simply the total revenue generated from your Facebook ads (your return) divided by your total ad spend. To measure your ROAS, you must set up a Facebook pixel and conversion tracking in your Facebook ads manager account.

The Facebook ads ROAS calculation

 

Facebook ads total revenue/Facebook ad costs: ROAS

What is a good ROAS for Facebook?

Although the benchmark varies according to industry, type of business, etc., an average ROAS of 3X or more is generally considered "good". This means that every dollar spent on advertising generates three in revenue. It's also influenced by the overall health of the business, profit margins, and other operating expenses. 

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What is a bad Facebook ROAS?

A low ROAS is generally a ratio below 2:1. Other metrics to consider when looking at the bad impact of marketing investment are the churn rate, organic sales, and click-through rate. These can easily be found in your Google Analytics ad account or any CRM you use.

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Facebook ROAS KPI examples & templates

From digital marketing, PPC and social media, these reports give you a good view of all your online marketing strategy metrics and overall online performance. 

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Facebook ads report template Facebook ads report template

Track your Facebook ad campaigns, optimize ad performance, and display your Facebook Ads data with our comprehensive report template. Spend less time gathering your data and more time growing your community and generating valuable traffic to your website.

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Social Media Report Template Social Media Report Template

Track your performance, optimize your social media campaigns, and show your social media strategy measurable results in real time with our comprehensive social media report template. Spend less time reporting and more on growing your community, becoming an influencer, or building your social media strategy.

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Digital Marketing Report Template Digital Marketing Report Template

Track your marketing efforts in an all-in-one report. Our digital marketing report lets you track organic search traffic, email marketing campaigns, PPC results, and your social media presence in one spot.

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Facebook Return on ad spend cost best practices

Here are some best practices you should remember to achieve your target social media ROAS. 

Return on ad spend cost best practices

step 1 icon Get to know your target audience

When advertising on Facebook ads and wanting to optimize your ROAS, you should know who you're talking about. Get to know your demographics and potential customers by testing ad targeting with custom audiences. This will improve your bidding strategy since you will know which keywords to track, and this will maximize the results of your ad campaign. 

step 2 icon Use A/B testing

If you aren't split-testing your marketing strategy, think again. Although looking into a crystal ball to determine what will convert new customers would be nice, it’s not possible. Instead, we recommend A/B testing, creating different format ad sets or landing pages to see which converts best. You can also explore multiple ad copies by trying different messaging or retargeting. You will get different ROAS data and determine which ads work best for your target market. 

step 3 icon Track it alongside other metrics

Like most metrics, tracking it by itself could be a mistake. To get a more accurate big picture of your Facebook ads lead generation, you should track your ROAS alongside other metrics like cost per lead, acquisition, conversion rate, click-through rate (CTR), cost-per-click (CPC), and cost per thousand (CPM). 

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ROAS Synonyms

Although return on ad spend (ROAS) is widely used, there are multiple synonyms that can be used. Here are a few: 

Ad spent ROI, Advertising ROI, Return on ad spend, Return on ad spent, Revenue per cost, ROAS $, ROAS %, Return on marketing spend

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