How You Can Control and Dramatically Improve Your ROAS | Digital Distillery by 8Loop

How You Can Control and Dramatically Improve Your ROAS

Author: Ad Hacks November 9 | Blog

How You Can Control and Dramatically Improve Your ROAS

Author: Ad Hacks November 9 | Blog

Undoubtedly the most important metric you’re going to have inside your ad account is your ROAS (Return on Ad Spend). But before you can learn how to control and improve this number, it’s important to understand what it’s made up of, and what factors you have direct control over in a Facebook ad campaign.

Your ROAS is made up of AOV (Average Order Value) as well as CPA (Cost per Acquisition).

While there are some metrics inside your ad account that you don’t have direct control over, because they’re highly dependant on external factors such as other advertisers on the platform, how you perform in the auction process, etc., AOV is a metric you can control and therefore optimize. And optimizing your AOV is the first step into optimizing your ROAS.

The first thing you’ll want to look at is how to improve your AOV – how do we increase that average order value? What package deals can we set up? What upsells can we offer? For example, how do you ensure customers buy more than just a single item on the website? You can do this within the ad copy, by offering package deals, or by extending your funnel, by sending customers to an upsell or downsell before reaching their checkout point.

Another thing you have direct control over within your ad account is the conversion rate of your funnel. This is super important, because your CPA is made up of your conversion rate and your cost per click. 

So after you’ve looked into optimizing your average order value, shift your focus to improving your conversion rate. If your landing page is converting at 3%, what can you do to bring that number up? What happens if you change the colours on the buttons? If you change the wording of your headlines? It’s very important that you never stop split testing this, because there is always room for improvement. 

And these improvements are going to have a dramatic impact on your conversion rate, which will directly improve your CPA. 

So while at first sight, you might not have total control over the ROAS, if you break down the stats your ROAS is made up of (AOV + CPA), there are two directly controllable metrics in there (AOV + conversion rate) that can significantly improve your most important metric.
Breaking down your metrics this way into controllable and uncontrollable can seriously help you improve your campaigns, a fantastic tip which was shared by ecommerce marketing wiz Depesh at the Agency Accelerator event in Fiji.

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