The ROAS is calculated as follows. Revenue generated ÷ total amount spent on advertising = ROAS When your ROAS is positive (a multiple greater than 1), you generate more income than you spend on advertising. So you earn money for every euro invested in advertising. When your ROAS is negative (a multiple less than 1), you generate less income than you spend on advertising. So you lose money for every euro invested in advertising. To take our example … If you generated € 600 in revenue after investing € 200 in advertising, your ROAS is 3 (€ 600 ÷ € 200). However, the ROAS only takes into account your advertising expenses, and not the costs related to your production activity. To calculate the “real” ROI of your campaigns,

You need to add one last variable: all expenses related to Bahrain Email List your business (or the manufacturing and shipping of your products), which gives us the following calculation. Revenue generated ÷ (Amount spent on advertising + Costs related to the activity) = ROI To come back to my example … If each product sold costs me € 20, the “real” return on investment for my campaigns is 1.5. 600 ÷ (200 € + (20 x 10)) = 1.5. In the end, you multiplied your investments by 1.5x. Here is a real example. For Facebook, the turnover is presented by the indicator “Website – Conversion value of purchases” (I will show you how to find this indicator as well as the ROAS at the end of this article). You notice that some campaigns generate a higher ROAS than others.

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You earn money for every euro invested

This is often the case with retargeting campaigns because you are retargeting people who already know the brand or are already customers. Naturally, these people will tend to click on your ads more and buy more easily because they already know you. In addition, you invest less money in advertising to reach these people, which explains why the ROAS are much higher for remarketing and retention campaigns. If you want to increase the ROAS of your campaigns and at the same time decrease your acquisition cost while spending less time on them, I invite you to read this article on my blog .

Evaluate interest in your Facebook ads The last indicators that we are going to see in this article will allow you to understand a lot of things about the performance of your Facebook ads … The objective of this analysis is to understand why your advertisements are not profitable or why your acquisition costs are increasing. Very often, the decline (or lack of) profitability of a campaign is related to the decline (or lack) of interest in your ads. Remember the role of an advertisement on the Internet: to trigger a click. It is not to sell. It is to trigger a click to your website, where the conversion is happening. A good advertisement will generate a significant number of clicks compared to the number of impressions.

That we are going to see in this article

This ad is said to have a good click through rate (CTR). CTR is calculated by dividing the number of clicks on the ad by the number of impressions. For example, if your ad got 10 clicks per 1000 impressions, the ad’s CTR is 1% (10 ÷ 1000). Again, the ideal CTR varies by industry, audience, ad content, and offering. For example, the CTR will naturally be higher in a sector like beauty and lower in a sector like insurance… I’ll let you guess why. In general, a good CTR on Facebook and Instagram is at least over 1%. But, in itself, this estimate remains irrelevant, in my opinion. For some advertising accounts that I manage, my campaigns perform very well compared to other accounts… for a lower average CTR.

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