Most marketers today have realized that running ads on social media is a failsafe way to gain brand visibility with Instagram alone accounting for a potential reach of 1.48 billion people. Since this statistic is only increasing along with the year-on-year ad spending, it has led to a lot of competition for consumer attention.
Not only is holding people’s attention becoming increasingly difficult, but the ever-changing algorithm can be unforgiving to marketers and advertisers across the globe.
So if your return on ad spend has been decreasing over time, we have some tips that will teach you how to increase ROAS and ad optimization tips.
What is social media ads ROAS?
When you are working on launching a new ad campaign, it is essential to be able to measure its success. One way to do this is by looking at the key performance indicators or KPIs. Commonly used KPIs of marketing and advertising campaigns are conversion rate, click-through rate CTR, and cost per conversion (CPC).
These metrics paint part of the picture but do not give you much perspective on the overall campaign success. This is where the return on ad spend (or ROAS) comes into the picture. ROAS is a vital metric used by digital marketers that measures the revenue generated per every dollar spent on an advertising campaign.
It takes into account not just the efficiency and quantity of results but also the holistic monetary impact it has making it an effective method within your campaign evaluation process.
So, how to calculate ROAS? Here is the formula:
ROAS = Revenue generated / Cost of the campaign
The value you derive from this formula will be expressed in the form of a ratio. For example, if you spend $2,000 per month on your ad campaigns and generate a revenue of $12,000 per month due to clicks on the ad, your ROAS will be 12,000 / 2,000 or 6:1.
So, what is a good ratio?
A good ratio will depend on factors like your industry, campaign, platform and intent. However, it is generally assumed that getting a ratio of 4:1 means that the campaign is successful.
Tips on how to increase your social media ads ROAS
Looking for ad optimization tips? Here are some tips to consider when trying to improve your campaign’s Return on Ad Spend:
1. Track campaigns in real-time
Most marketers run ad campaigns on multiple platforms. However, to stay on top of the investments going into the campaign and assess its performance, you need to track the data in real-time. Unfortunately, logging into and switching platforms often to measure each can be tough and you may miss out on crucial data points.
To combat this difficulty and more, a tool like Radarr will bring in much-needed efficiency to your ad tracking as it monitors all insights and data on a single dashboard. This way you can focus your efforts on social media optimization strategies to get more mileage.
2. Get more strategic about data segmentation
A common mistake marketers may make is over segmenting their audience. The problem with it is that it provides limited data and can make the results less reliable due to inconsistent performance.
Start your campaigns by removing filters that over-segment your audience and narrow your reach. This is mostly because the initial stage is all about testing your campaign and you won’t drive hard data by targeting super specific audiences.
In case your ad needs to have a limited focus, combine audiences to get more usable data and drive higher conversions.
3. Catch the outliers
A common mistake many marketers might find in an audit of their marketing strategies is that once something is launched, the targeting does not get tweaked. You can improve performance by making some strategic changes.
For example, if your campaign performed better on one platform versus another, try testing only using that channel to maximize your dollar spend. If targeting options become too granular, it’s sometimes worth it to trim back by merging an ad set with another to see which delivers the best results.
4. Try differing objectives
When reassessing your goals, you may want to consider testing new objectives. Brand campaigns often experiment with a combination of different types of campaign objectives, like dynamic remarketing or static remarketing.
While one brand may see higher success using dynamic methods by using custom tagging and optimizing for ROI, another may be more successful using static methods to boost their conversion rate.
5. Experiment with bid strategies
While most marketers enjoy complete control over their campaigns, it may not always be the best route. By manually doing your bidding strategy and setting a cap on costs, you are limiting the audience you are reaching and end up receiving an unsatisfactory ROAS.
While this strategy may work for some businesses, Facebook tends to favor volume for better bidding. Opt for a low-cost bidding wherein you can let Facebook know the goal of your campaign and the algorithm will set out to help you achieve those results.
Of course, you won’t have as much control if you use this method and you will also have to place your trust in the algorithm but you may see great results. If you are still wary of this method, it is best to start out with a small budget.
In other instances, you may even opt for a bidding based on value where you define your goal with a value. The Facebook algorithm tries to help you reach your ROAS goal by helping you reach a larger volume of accounts.
6. Use different creatives
Creatives are at the center of Facebook advertising. If a specific target audience isn’t resonating with your ad, it could be that the creative seems irrelevant or unappealing to them. Create a pool of different creatives and test various formats on such an audience where you can gauge if the creative resonates with it or not.
Another reason for working with multiple creatives is that most audiences view your ads a handful of times. If they see the same visuals multiple times, they may get bored of it and not take the action you are expecting them to. So, to break the monotony of higher frequency ads, you must refresh the creatives.
You can deploy different creative assets into different placements based on where your target audience spends their time-consuming content. Don’t forget to create multiple versions of your ads if you have the resources to do so. This will help boost visibility and credibility among unfamiliar prospects faster; so they may start engaging earlier on than anticipated.
7. Optimize for mobile
Since a major chunk of traffic your ads will get will be through their smartphones, it is extremely important to optimize all your marketing efforts to be mobile-friendly.
You can do this by following the steps below:
- Keep your copy short yet punchy
- Use optimized media (i.e., smaller file size, visible text, subtitles for videos, etc)
- If the user has to click on a web address, be sure to optimize that page for mobile too
- Include a clearly placed call-to-action (CTA)
- Use easy to remember URLs or go for URL shorteners
- Bookend with your brand
Most importantly, if your campaign’s end goal is for a viewer to purchase from you, ensure that the page speed for mobile is fast and there are fewer clicks involved to make the purchase since this is where most people can drop off the marketing funnel.
8. Focus on reducing friction
This is one of the best ad optimization tips to follow. You can reduce friction in your campaigns by creating systems that nurture potential customers and existing customers to a higher funnel. This reduces your costs greatly and can even ensure return clients if executed well.
An example of this is turning people towards your email marketing efforts where they can take the desired action at a lower cost. You may get the best results if you do this in conjunction with retargeting. So, if someone adds items to their cart due to your ads but doesn’t checkout, you can gently nudge them to do so with retargeting or emailing them about the same.
9. Analyze journeys for cost-effectiveness
When trying to find ways to save money on your marketing campaigns, it’s important to test against different customer journey types and optimize the campaign based on real-time results rather than tweaking based simply on assumptions.
By mapping out possible journeys, you can see how people might interact with your ads differently due to how they found the ad, when they saw it, where they saw it or even who they are.
No matter what the length of a customer journey is, you have many unique paths a prospect can take during their research and interaction process before converting or showing interest in your company and its products.
So instead of optimizing solely for cost-effectiveness or conversions only, try using heatmap tracking that provides insight as to which ones are the high-performing assets on your website as well as which assets should be updated for optimal engagement.
10. Try out new audiences
Even if you’ve had a disappointing return from an ad campaign, remarketing can help increase the effectiveness of your next campaign.
You can even reach new potential customers who are similar to those most likely to already be interested through custom audience retargeting by making use of Facebook’s ‘lookalike audience’ feature. This makes sure your ads are more effective overall and lower both the frequency and cost per click.
11. Do a sentiment analysis
When you’re using tools to assess the results of your social media ad campaigns, it is also important to regularly analyze the sentiment behind your marketing efforts. By doing so, you can learn more specific information about how people are feeling about what you are sharing on online platforms.
To offer a complete analysis, try combining qualitative and quantitative information. You can do this by using tools to measure emotion since they will allow you to spot trends that are occurring underneath the surface and provide insight into what is really going on with your efforts.
In closing – Time to improve your social media ads ROAS
If you want to make educated decisions about where to spend ad money on social media and what the potential ROAS could be, you need hard data. These numbers help marketers control the expenditure on campaigns, tweak them as they go and even stay ahead of competing brands.
Hopefully, the above ROAS tips prove to be helpful and insightful. There are always ways to improve your ad spend and the way you measure it.
As you continue to experiment with new approaches, keep an eye on the ROAS ratio and monitor how they change. This will help to validate your efforts while demonstrating their effectiveness over time.
Ready to explore how social listening and media monitoring can help improve your social media ad performance?