.01 ROAS is everything.
ROAS or return-on-ad-spend are great metrics to use to determine the performance of ads and many of us are guilty of using them as key indicators to whether an ad budget should be scaled.
But they’re not everything.
When acquiring customers in different stages of their sales journey, the cost to acquire them will go up and down depending on how ready they are to go onto your website, browse products, and then checkout. Good ROAS usually tend to indicate that the users converted were likely to purchase because they were ready to buy and were actively looking when they saw your ad. However, this is only a small portion of users and it will eventually get saturated. There’s a larger volume of prospects as seen on the diagram above and to convert them, cost of ROAS can definitely be much higher but is crucial for long-term growth.
.02 My ads performed great last year, why are they so bad now?
A year is a long time in today’s world of marketing and in fact, there are almost changes every few weeks.
In the string of changes, Apple’s recent iOS 14 changes will significantly impact how Facebook can receive and process conversion events from the Facebook pixel. This means that much of the data we had access to previously is now under-reported if Apple users decide to opt-out of data tracking.
This along with increased competition from competitors is definitely driving costs of marketing with Facebook ads higher everyday. So if you were doing a 4x ROAS in 2020, you’ll be pretty lucky to come close to half of that in mid-2021.
.03 Facebook ads are expensive.
If there’s a more cost-effective channel out there, do let us know as we’ll probably love to move our budgets there.
Yes, ads on Facebook are getting more and more expensive. But they’re still one of the cheapest and most value for money marketing channels out there. Done right, they can convert well without heavy capital. You can’t compare organic channels to paid channels as they’ll always seem more expensive because you have to pay, of course.
.04 Boosting are real ads.
Many times when we ask a business owner if they have been running ads on Facebook or Instagram and they’ll nod their heads. They’ll also mention that their experience with ads hasn’t been great and this makes them hesitant about investing more money into ads. A quick peak and what they’ve done to date and you’ll see that they haven’t actually run any REAL ads. They’ve just spent 2 minutes and boosted their latest post. Sure, it’s still counted as an ad but there’s a reason why boosting on Facebook or Instagram isn’t quite effective.
- You have very limited targeting options, restricted to basic keywords.
- You have limited creative control since you are using a post that’s meant to be on your social media feed and not created to sell.
- Your objectives are probably wrong.
- Boosting is limited to profile visits, website visits and messages. They’re meant to build traffic and not actual conversions.
.05 My ads can run by themselves and I’ll check back at the end of the month.
One of the most common Facebook Ad mistakes that most business owners or markets make is launching ads and then only checking back at the end of the month or the campaign timeline to see results. Why? Ads are like trades, they can fluctuate depending on the environment and news. It’s also very common to exhaust a particular target audience within a period 3-4 days, especially if you work with bigger budgets.
It’s key to check in your ads every few days to look out for a few things:
- Link clicks
- Cost per purchase
This will help you move focus and budgets to campaigns, ad sets or ads that are better performing.
.06 Page likes will increase my sales because my fans will buy.
Less than 1% of users who like or follow a brand will actually visit that brand’s page. Since most users will only scroll through their news feed, banking on these numbers to drive business results is not the best idea and doing so is like trying to trade in-game credits for real-life purchases.
The journey from liking a brand’s page to purchasing a product is a long journey that has many hurdles every step along the way. Hence, if you’re looking to create conversions by increasing followers or likes, it’s surely not going to be cheap either.
.07 Link clicks and impressions are key metrics to success.
It’s important to know how the different metrics play a part in your success with Facebook ads. While looking at link clicks and impressions are essential, especially if your ads are not performing we must first realise that the different Ad Campaign Objectives can affect how your ads create these numbers.
A Traffic objective ad will be shown to users who generally click on lots of ads and the Conversion objective ads will be shown to users who are most likely to take action based on their behaviours in the past on the platform.
Below is a summary of how far a $500 can go with a Traffic vs Conversion
- Traffic: 5,000 link clicks, 15,000 impressions, $350 in sales
- Conversion: 1,000 link clicks, 8,000 impressions, $1,500 in sales
You’d notice that less users saw the Traffic ad and even less made clicks but you can see that the performance difference between these two ads is about $1,150 in sales.