A significant decline in Return on Ad Spend (ROAS) can be worrying for any business, but it’s important to take proactive steps to turn things around. When Meta’s automated ad targeting tools report an average 32% increase in ROAS, it’s clear that optimizing your campaigns is essential. So, if you’ve noticed a dramatic fall in your ROAS, it’s time to dig deeper.
Key Areas to Analyze for ROAS Decline
Meta suggests examining your ad funnel on a weekly basis to spot the specific areas where the drop is occurring. Could it be your CPM, CTR, or conversion rate?
Step 1: Tackling Low Clickthrough Rate (CTR)
CTR is crucial for gauging your ad’s initial appeal. However, it can vary greatly depending on your niche. For example, the beauty industry may see better engagement with visually compelling ads, while healthcare ads might require more informative content to attract clicks.
If CTR is low from the start:
Image or Thumbnail Issues:
If your visuals are not capturing attention, you might have an audience mismatch, or the creative may not be appealing enough.
Fixes:
- Analyze competitors’ ads to see what’s working for them.
- Experiment with new creative concepts (e.g., “Before & After,” “3 Key Reasons,” etc.).
- Alter your messaging to be more engaging.
Low Video CTR:
If your video isn’t grabbing attention, it could be that the hook is misleading, or your CTA is unclear.
Fixes:
- Align your video’s hook with the rest of the content.
- Review metrics like the “hold rate” to determine if users are staying engaged.
- Strengthen the call-to-action.
Decreasing CTR Over Time:
High frequency of an ad can lead to ad fatigue. Ensure your ad frequency is balanced:
- For prospecting ads: Weekly frequency < 2 and Monthly frequency < 8.
- For retargeting ads: Weekly frequency < 4 and Monthly frequency < 8.
Proven Solutions:
- Introduce new creative.
- Use urgency or scarcity tactics.
- Incorporate social proof and highlight more pain points.
Step 2: Managing High Cost Per Thousand Impressions (CPM)
CPM can be influenced by several factors, including the overall demand for ad placements and the quality of the customer experience.
How to lower your CPM:
- Consolidate Campaigns and Ad Sets: Avoid over-segmentation. Consolidate campaigns and ad sets to help Meta’s algorithm gather data faster, making it more efficient. Aim for no more than 5 campaigns, 3 ad sets, and 5 ads.
- Monitor Frequency: High frequency leads to higher costs. If your ad frequency exceeds 2 over a 7-day period or 4 over 30 days, expect to pay a premium.
- Optimize Ad Placements: Stop over-segmentation. Allow Meta’s algorithm to use more signals by enabling all placements.
- Use Stop-Motion Videos: This type of video works well for engagement as users often rewatch to catch the “perfect moment,” which Meta counts as interaction and helps lower CPM.
- Leverage Long-Form Carousels: These ads divide a single image across several cards, creating an engaging experience that can drive more interactions.
Step 3: Addressing Declining Conversion Rates (CVR)
A drop in conversions might not only be an issue with Meta ads, but also with other marketing channels (like organic or direct). You can investigate through tools like Google Analytics to see if the problem is specific to your Meta ads or if it’s a broader trend.
If your conversion rates are dropping:
- Dig Deeper into Your Ads: Analyze which ads are underperforming. Consider testing new ads to see if they perform better.
- Optimize Landing Pages: Ensure that the messaging in your ads matches the content on your landing page. Use tools like Hotjar or Microsoft Clarity to track user behavior and identify pain points where users drop off.
- Focus on Specific Drop Points: Is the drop in the add-to-cart stage, or do users abandon their checkout process? These insights can help you adjust your strategy.
Quick Recap: Steps to Improve Your Meta Ads ROAS
- Dive Into the Data: Scrutinize your campaign data to identify trends or issues contributing to a ROAS drop. Look for changes in target audience behavior, ad copy, or external market factors.
- Review Your Ads: Ensure that your campaigns align with your business objectives and that ad copy, targeting, and bidding strategies are optimized.
- Optimize Landing Pages: Make sure your landing pages are designed to convert—simple, clear, and mobile-friendly.
- Refine Targeting: Adjust audience targeting to ensure you’re reaching users who are most likely to engage and convert.
- Test Various Ad Formats: Experiment with different formats such as carousels or videos to identify which performs best for your audience.
- Monitor Competitors: Keep an eye on competitors’ strategies and adapt your campaigns accordingly.
- Consult Experts: If you’re still struggling, seek advice from a digital marketing expert to get tailored solutions.
By taking these steps and continuously monitoring your performance, you’ll be better equipped to regain control over your ROAS and drive more profitable results for your business.
