eCommerce marketers need to measure and analyze data to see how effective their advertising campaign is. And if your end goal is to increase revenue, you must calculate your ROAS.

Read on to find out more about ROAS, what the average ROAS for Facebook ads is and what you can do to improve it. 

What Is ROAS?

ROAS, or return on ad spend, is a way for an eCommerce brand to gauge the success of its advertising.

Comparing how much you spend on advertising to your revenue, you will be able to gauge how healthy your business is and how much return on investment you are getting. 

If your advertising messages have more impact, your ROAS will be higher and your performance will be better.

How to Calculate Your ROAS for Facebook Ads?

Your ROAS can be calculated if you divide the revenue that you earn from ads by the total cost of the ads.

Facebook ROAS= Advertisement revenue/Advertisement spend

For example, if you spend $100 on Facebook ads, and you make a total profit of $300, then your ROAS is 300%. 

Today, many eCommerce marketers are using the ROAS benchmark for their advertising campaigns to know whether they are optimizing their campaign spending or not.

Average ROAS for Facebook Ads for eCommerce

The average ROAS for Facebook ads can be different for each brand, depending on:

• The type of company you have
• Your brand
• Your product
• Your target audience.

On average, experts suggest that eCommerce businesses get 6 to 10 times the return on ad spend. For instance, if a business invests $20,000, it will get back between $120,000 and $200,000. 

The minimum ROAS that you should get back is at least four times what you spend. In other words, it should be 4:1.

Databox reported that at least 30% of marketers get back a return of between six and ten times. 

They also reported that 25% of marketers get back a return of at least four to five times, whereas only 5% have a ROAS of more than 80 times. 

How to Make Your Average Return on Facebook Ads Better?

Here are some ways in which you can improve your average Facebook ROAS.

Cut down expenditure on ads

If you are able to reduce your ad campaign costs, your ROAS will increase. The total cost of your ad goals can be lowered by reducing labor costs: for instance, reducing in-house ad development and outsourcing it instead. 

Also, using automated testing to see what works for you is significant before you spend too much on a single ad.

Narrow down your targets

If you target a specific audience, you can tailor your ads to reach a certain:

• Demographic
• Age
• Behavioral group
• Group of people with the right interests.

This will increase the response rate and the number of leads. 

When your audience is wide but not well-targeted, you have to spend more on ads and the results may not be convincing enough. On the opposite, better ads, created for a specific group of people, can drive more sales.

Touch upon your audience’s pain points

Your advertisement should solve the problem of your customer and touch upon their pain points.

This will decrease your cost per conversion and increase your ROAS. Rather than conveying a message to your customers about what you sell or what service you offer, focus on how you can help them.

Use click-to-messenger

Facebook offers click-to-messenger ads where the CTA is ‘Send Message’.

This is how it works: each time a person clicks on your ad, they will be redirected to Facebook Messenger. 

This encourages users to have a conversation with a chatbox or with a real person. It creates an opportunity to establish a real bond with your customer, which can be more efficient than usual click-to-website ads.

Use the right ad format

Depending on your eCommerce brand and target audience, you must utilize the right ad format on Facebook.

For instance, on Facebook, you can create:

• Image ads
• Video ads
• Carousel ads
• Instant experience ads,
• Lead ads
• Slideshow ads
• Etc.

Before you create an ad, research your target audience.

Monitor your data

It is important to continuously track and monitor your data on Facebook if you want to optimize your ROAS.

You can then abandon the ads that do not perform well and continue to work on the ads that are performing well.

Use the Facebook pixel

The Facebook pixel is a code you can place on your website. This allows you to monitor conversions from your ads on Facebook and build targeted audiences. You may also retarget people who have already visited your website. 

The Facebook pixel gives you precious information to make your Facebook ad better.

Facebook pixel can also help you report your website visitors' interactions. For instance, when a customer takes a certain action on your website after seeing your Facebook ad, you will know it through the Facebook pixel.

Use retargeting

The first time someone sees your ad, it is less likely that it will convert, as a person will need to see it at least three times before they can take a certain action.

Using Facebook Audience Insights, you can get important information about your Facebook followers and target your ads accordingly by including useful details and information.

This will help you to repeatedly retarget potential customers and build trust.

Use Facebook Dynamic Ads

Facebook dynamic ads let you promote relevant products to people who have shown interest in a certain item on your website or app.

If you want to create a dynamic ad, upload your product catalog and set up your ad campaign. Dynamic ads will run on autopilot and show up-to-date pricing and availability to viewers.

Once you begin tracking your ROAS for Facebook ads, you will be in a better position to see in which direction you are heading and plan better.

Take a look at other marketing optimization tactics as well so that you can get a better overall return on investment for your eCommerce brand.