4 Ways We Improved Our Return On Ad Spend With Facebook Ads

The Facebook ads platform has been continuously changing since its inception. It is therefore a constant battle for Facebook advertisers to keep up with the new features, changes and best practices in order to maintain a positive Return on Ad Spend (ROAS). In no year does this seem more true than 2021.

We at CardenRowe saw a sudden and dramatic decrease in our ROAS in the beginning of the year. This was due to a number of factors, including greater competition in the Facebook Ads space and enhanced data privacy protection (mainly the new Apple iOS 14 software update, which essentially allowed users to opt out of being tracked by Facebook’s algorithm).

Nevertheless, over the past few months we have managed to regain a lot of that ROAS by focusing on 4 key areas;

1. Rejuvenating our ad creative & product offering

2. Examining our audience funnel & optimizing for different objectives

3. Targeting a broader audience & avoiding audience overlaps

4. Testing Different Budget Controls

Let's now look at each area in more detail.

1. Rejuvenating our Ad Creative & Product Offering:

Excessive repetition of the same ad or ads can not only lead your audience to ignore your adverts but actively resent them. This may sound obvious - we all know how irritating it can be to get bombarded with the same old ad over and over again – yet it is a mistake that many companies continue to make.

This is what is known as ad fatigue and it’s not only causing your ad performance to decline but perhaps even worse, it can cause negative mental associations with your brand.

One of the main issues we had at CardenRowe was that we offer an extensive number of products in our catalogue and creating new induvial, or ad set level creative would simply be far too time consuming.

However, after many hours spent searching for a creative solution to this problem on ‘Facebook Ads inspiration’, I decided that it would be more efficient to create a select number of brand new product offerings and then generate individual creative for those few ‘high performing products’. As for the rest, we decided to let Facebook jazz up our standard creative by selecting the ‘Dynamic Creative’ tool within Facebook Ads Manager as well as tinkered with Facebook's Instant Experience options.

By doing this, we not only managed to re-engage our audience through new and dynamic creative but by creating a completely different product offering (out of the same products) than they had ever seen before. We included a number of specials and managed to maintain a decent profit per purchase through bundling a number of products together.

If you are a small company starting out, I would highly recommend using the design tool Canva in order to spruce up your ad creative. Canva allows you to choose from hundreds of pre-made templates as a starting place to design new and engaging Facebook ads in just a few minutes. Whilst there is a free version, I’ve found the enhanced features on Canva Pro well worth the subscription fee. It is relatively inexpensive for what you get and super user friendly. Unlike other programs like Adobe Illustrator or Photoshop, you don’t need any design experience to work out how to use the program!

2. We examined our audience funnel & optimized for different objectives:

The conventional Facebook Advertising wisdom, as many self-proclaimed YouTube Facebook experts will tell you, is to create and nurture your audience funnel.

Simply put, you are supposed to set up a number of different campaigns to target each stage in the customer purchasing journey - Awareness, Consideration, Conversion. Starting with your Reach and Awareness Campaigns, the aim is to get as many people clicking through and engaging with your website as possible (without intention to purchase yet). Then ideally spending the majority of your budget on Retargeting Campaigns, where you finally manage to convince that initial customer who clicked on your website to purchase (hopefully).

We quickly realized that this conventional funnel was being severely hampered by the new data protection and privacy laws, including the Apple iOS 14 system update (over 60% of Wayfare customers use Apple). This effectively meant Facebook could no longer (or less efficiently) track these top of funnel users in our re-targeting campaigns.

In effect the Facebook algorithm was showing our ads (in the traffic campaign) to as many people as possible who were likely to click on our advert, (instead of purchase) and we no longer had the ability to retarget this person in a later campaign. This ultimately meant we were wasting our (limited) budget on Top of Funnel Traffic campaigns.

We decided to experiment by doing away with the top funnel campaign objectives all together. We chose to focus the majority of our budget on Conversion Campaigns and then shoot straight for the end goal by selecting Purchase as our Conversion Event.

We still kept our retargeting ads alive but on a much lower budget. In this way we weren’t dispensing with the Ads funnel theory completely but rather modernizing its precepts to make it more appropriate for our changing business environment. By doing this many of our conversions started appearing in the ‘top of funnel’ campaigns instead of chiefly relying on retargeting ads.

Instead of ‘wasting’ money trying to optimize for as many link clicks as possible, we ended up generating less traffic to our website but at a much higher conversion rate. We further noticed that by targeting Facebook users most likely to purchase, we also improved the ROAS on our retargeting campaigns.

Changing our approach here, leads us into our final two changes,

3. We targeted a broader audience & avoided audience overlaps

If you come from an agency background or even just approach your advertising in a data driven manner (as we do), you probably have an extremely tidy and highly segmented Campaign and Ad Set layout. This then allows you test one variant at a time and optimize your ads by knowing exactly what is or isn’t working.

However, especially if you are running on a smaller budget, this can often lead to the Facebook algorithm not having enough data to optimize your ads for success, resulting in the magical algorithm never really getting out of the learning process. Furthermore, the more segmented or specific your audience is, the higher Cost per Mile (CPM) you are going to pay. This is because you are bidding to show your ads to a much smaller and specific audience.

What we did was target much broader consumer interests and included a variety of product adverts in one larger Ad Set. Instead of having a specific Ad sets for Luggage, Backpacks and Induvial Brands, we created one broader audience & ad set (at a combined higher budget) and lumped all the different individual ad creatives together. This allowed Facebook to select the better performing ads and show them more often.

However, this approach had a downside which we had to accept. Certain product categories that didn’t perform (such as our Backpacks) stopped being shown as often, resulting in minimal sales in those departments.

At the other end of the spectrum, we had to be careful of Audience Overlaps which, for various reasons, can cause performance issues chief of which are the following:

  • Ad creative fatigue (mentioned above) can set in much quicker: If you are serving ads across multiple ad sets with overlapping audiences, your ad will be showing up to the same users more often but will not reflect on the Facebook frequency tool as it only correlates to the individual campaign.

  • It can be unclear which targeting options are working best: If your audience is overlapping, Facebook will allocate the ‘conversion’ to the most recent audience, which isn’t always the one which had the greatest impact.

  • You end up bidding with yourself for ad placements: Perhaps the worst part of an audience overlap occurs when your ads end up competing with each other in for impressions. You basically end up bidding against yourself (and others) in the Ad auction. Yes Facebook, take all our money!

So, by violating marketing agency orthodoxy and bundling similar product categories in one ad set, we not only managed to streamline and promote our better performing ads but also ended up with a much lower CPM.

4. We Tested Different Budget Controls

I must admit, I had to conduct a lot of research and testing in order to understand and refine the nuances of Facebook budget controls. Facebook Ads have some of the most extensive options in the digital advertising space and can be confusing to both seasoned and unseasoned advertisers alike!

This means that most people choose the standard daily budget instead of divulging into the many different budget options. Therefore understanding and perfecting the different budget controls represents perhaps the greatest opportunity to get one step ahead of the ever-increasing competition! Going through the nuances of each option and how we tested to optimize our budget is probably an entire article in itself but here’s a brief overview of the two main budgeting options we changed and optimized.

We moved from the Standard Daily Budget to a campaign Lifetime Budget. The benefit of lifetime budgets over daily ones is that Facebook will adjust daily spend levels based on the results of the campaign.

This resulted in our Facebook ads hardly performing on some days. Nevertheless, the money saved by this meant we had the reserves in our budget to enable Facebook to fully capitalise on the days where we saw strong performance.

When switching to Lifetime Budget, Facebook also allows you to schedule the hours of the day and days of the week that the campaign will be running. We dived into some Facebook and Google analytics to work out the best times for our ads and scheduled our campaigns to run during those times. You do however need to be careful when playing with scheduling as it will impact on how Facebook prioritizes your budget. You also need to have been running Facebook ads for awhile in order to have the required data to make these decisions. If you are new to Facebook ads, you better off letting Facebook choose when to show your adverts!

These 4 simple changes greatly improved our ROAS during a time where there seems to be much uncertainty around Facebook Ads’ ability to perform in the iOS 14 era. Some of the techniques we tried went against the conventional Facebook advertising wisdom but hey, that’s what testing is all about. Its working for us, it may well work for you!

If you would like to reach out for some help on Facebook Advertising, please contact us and we'd be happy to assist.

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