You want to establish a ROAS benchmark for your eCommerce store or simply want to match your Facebook ads performance with the ROAS that other eCommerce advertisers get. I am sure you would agree with me that all answers out there for “What is a good ROAS for Facebook Ads?” are truly subjective.
As a Facebook marketing expert with over 5 million dollars in managed ad spends, my short answer would be that the overall ROAS for Facebook ads should be in the range of 4 to 10.
Key factors that determine Facebook ROAS
- The efficiency of Facebook ads – A more profound understanding of customers, target market, Facebook ad strategies that work best for your business, and rapid experimentation at all levels, are key for ROAS optimization. Lower the cost per purchase, better the ROAS.
- Average Order Value – A lower cost per purchase alone will however not result in a good ROAS unless it is backed by average order value.
- Unicorn products – The ability to identify and promote unicorn products is critical, as they push the ROAS upwards.
- Geography of your target market – In mature markets like the US, Europe, Australia, etc, the ROAS tends to be lower than that you get in developing markets like India.
Scalability, profitability, and ROAS
Not all eCommerce clients have the same goals for Facebook advertising. eCommerce clients we have worked with can be grouped into the following 2 classes based on their Facebook advertising goals –
- Clients who focus on scaling eCommerce sales at a defined minimum ROAS. The focus here is to scale while keeping Facebook advertising sustainable. Here ROAS is the key metric.
- Clients who focus on acquiring new customers fast, probably use predatory pricing strategies and want to capture a percentage of their target market share at the earliest. The number of new customers acquired is the key metric here.
Good luck to you with Facebook ads.