How can I improve my Facebook ads? You may not even be able to tell the difference between ROI and ROAS
If you have experience with Facebook advertising, you must have heard of ROI and ROAS, because when we calculate the effectiveness of ads, we must be inseparable from these two words.
Many new friends in the advertising, will be in various groups to listen to the "big guys" talk about their ROI how much, in fact, most of the time, they are talking about ROAS. In order to enable everyone to understand the big talk, xiaolan for your new friends prepared about ROI and ROAS literacy basics, in addition, if you have any questions about overseas promotion, welcome to ask questions in the message area, Lanhan interactive senior optimizer will answer for you.
What are ROI and ROAS
ROI and ROAS are data metrics that are discussed when measuring the effectiveness of advertising.
ROI:Return on Investment, return on ad delivery and total cost-to-investment ratio.
ROAS:Return on Ad Spend, a measure of how much revenue each group of ad spends will bring.
How ROI and ROAS are calculated
ROI - Total ÷ total cost of 100%
For example:
A product costs $40, sells for $100, and sells 10 pieces, with sales of $1,000 if the ad costs $300.
Total revenue: $1000
Total cost: 40 x 10 x 300 x $700
Profit: 1000-700 - $300
ROI=300÷700*100%=43%
For e-commerce Facebook ad delivery:
Total Revenue - The value of the site's shopping conversion
Total cost, advertising fee, product purchase cost, freight, handling fee
The higher the ROI, the higher the proven profit, if the ROI is greater than 0, it means that it is profitable, if the ROI is less than 0, it proves that your advertisement is in a loss-making state. So with ROI, a data indicator that calculates the profit and loss of your ads, you can clearly understand your profit and loss.
ROAS - Total revenue÷ ad spend of 100%
For example:
A product costs $40, sells for $100, and sells 10 pieces, with sales of $1,000 if the ad costs $300.
ROAS=1000÷300*100%=333%
Total Revenue - The value of the site's shopping conversion
Advertising expenses - The advertising fees that are paid to generate these orders
This indicator is mainly to measure the effectiveness of Facebook ads, generally can not directly see the profit and loss status of ads from ROAS, but the advertising performance of the reference. Generally ROAS is greater than 2 to indicate that your ads are profitable.
How to improve ROI or ROAS
ROAS effect is better to track, you can directly use Facebook background tracking data, you can also use the value of the site shopping conversion divided by the amount of advertising spend to calculate, in general, only ROAS in 2 or more, we decided that advertising is effective (this value also varies according to the cost of each product). How to upgrade ROAS, blue sail out to sea with specific examples for you to explain.
First of all, we have to calculate according to ROI how much profit and loss line each product is, ROAS to maintain more than how much is to make money, as long as not losing, you can slowly increase the budget, until ROAS began to decline, we can basically determine the maximum profit on how much.
For example:
If a product costs $40 and sells for $100, the cost of selling a single item can be profitable as long as it is less than $60, that is, $60 advertising fees out of a single, it is just in the profit and loss line, that is, ROAS more than 100÷60 x 100% x 167% is earned.
So we generally see ROAS as a red line for the product's profit and loss, not as a measure, of course, the higher the ROAS, the better.
In addition, in the terms of ROI, because ROI is a profit ÷ total cost of 100%, so to increase ROI, either reduce costs, or increase product prices, increase profits. But if the price of the product is certain, you need to control the cost of advertising as much as possible. Of course, there are many factors that affect ROI in particular, and here we have a brief look at the two key factors, audience and material.
Optimize your creatives to boost CTR
Facebook's optimization logic is user experience-driven, when a post comments, likes, share a lot of time, will get Facebook's attention, and the quality of the material is to determine whether customers click, comment on ads on the key, so we have to spend time on the material.
But if the use of good material is too high, users of this type of advertising has been aesthetic fatigue, the effect of the later is not good, which requires us to regularly more advertising creativity. When your idea attracts clicks and comments, Facebook distributes more traffic, more accurate audiences, higher relevance scores for ads, and err on ROI.
Understand your audience and market to increase your ad performance
There are no products that can't be sold, but you don't find the right person, the audience precision, the effect of advertising will be greatly improved.
Therefore, we should learn more about overseas users' media usage habits, language and cultural characteristics, and which categories of products, which forms of advertising are of interest to overseas users. Blue Han Interactive senior optimizer suggested that we should learn to analyze the user's shopping habits and product characteristics, when each time you get a product, you can analyze the product suitable for the population, so as to carry out targeted delivery.
On the other hand, we can learn from the data we already have, for example, whether our products are only of interest to people of a certain age, or whether the ads are performing well in a particular country, optimizing the ads according to the measurement data and enhancing the ROI.
The above is all the content of this issue - the text mentioned in the "test", we will be in the push to teach you how to choose, test, release, welcome to pay attention to the blue sail out to sea public number timely check Oh
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