… and how to interpret them

As any good marketer knows, the satisfaction of a boss or a customer who is a little too stressed is ultimately down to very little. Maximising the return on investment, more commonly known as ROAS. This small indicator, when it is greater than 1, is the indisputable sign that the strategy put in place is profitable. The marketer’s job is to optimise this key metric in order to obtain a satisfactory return on investment according to his objectives.

The other metrics, although important for analysing a social commerce campaign and defining a strategy, are all ultimately used to maximise the Facebook ROAS: a good CTR means, for example, lower CPCs, hence more qualified traffic and more likely to increase the conversion rate, and therefore the ROAS. We detail here all the marketing performance indicators to follow for your campaigns. Lower CPMs allow you to reach more people for the same amount of money, so you have a better chance of converting, and ultimately improving your ROAS.

As you will have understood, if you have reached this point, the ROAS is the main indicator of the profitability of a Facebook campaign. So how do you maximise your ROAS on Facebook (and sleep soundly knowing that your clients or bosses are doing the same)?

Facebook ROAS: definition and calculation

ROAS is the ratio of total revenues generated to total expenses incurred:

ROAS = Total revenue / total expenses

A ROAS equal to 2, for example, means that each euro spent on the platform will have brought you 2. Simple, isn’t it?

As a good marketer, you should now ask yourself what level of ROAS is satisfactory. The answer is that there is no answer: it depends on your business objectives and the amount you choose to invest. For example, a ROAS of 6 per €10 invested will ultimately have much less impact on your turnover than a ROAS of 1.8 per €100k invested. The key is therefore to define a target ROAS that makes sense for your objectives and budgets.

Solutions to improve your Facebook ROAS

Now that you’re a little more familiar with this all-important metric, you probably want to know how to get a ROAS of 2,4,12 or even 200 (don’t dream too much!). Follow our tips to become the profitability expert your clients can’t live without!

Work on your acquisition funnel in a relevant way

The first key to improving your Facebook ROAS is to have a consistent full-funnel strategy. It can’t be repeated enough, but a good Facebook ads strategy lies in the optimisation of its customer touchpoints and the adaptation of its messaging according to the level of engagement of the targeted individual.

For example, a person who has never heard of the product or service you are promoting will not be addressed in the same way as a repeat visitor to the site. Communicating in a personalised way with ads adapted to each stage of the conversion funnel is fundamental if you hope to achieve a satisfactory return.

But how does this translate into concrete action on Facebook?

• Address the top of the funnel: run engagement, video view or traffic campaigns depending on your objectives, to bring cold audiences into your conversion funnel.

• Run conversion campaigns optimised for cold traffic: Target by affinity, or via the Facebook lookalike tool for example. Also trust the Facebook algorithm by targeting broad. At best you will be profitable with these campaigns, at worst it will feed your retargeting base with qualified potential buyers.

• Do retargeting! Retargeting allows you to target people who already know your brand or product, because they have for example visited your site, added to your cart, or engaged with your Instagram account. Re-target these people with the right messaging! It is very often with this type of audience that we find the best conversion rates and ROAS levels. However, be careful with the size of your audience, always make sure you feed the top of the funnel enough to avoid saturating your retargetting.

Optimising your ads = improving your Facebook ROAS

As a marketing expert, you should know that another element is extremely important to the success of an advertising campaign. This is, of course, the ads that you run! Improve the quality of your ads, to increase your CTR and lower your CPCs (which improves ROAS, remember?)

Work on your creations

Produce creative that is consistent with your corporate identity. Show your product, make your value proposition clear. Show people, it often works better! Monitor your CTR to judge the relevance of a creative to a target.

Test, test and test again!

There is no secret to knowing what works on which target: you have to try! Test several types of advertising formats, content, static, video, GIF, carousel … Vary the communication angles, mentioning your main USPs: are you cheaper than the competition? Do you have a more innovative technology? Do you offer free delivery? Find the angle that makes the most sense for your audience and maximize its distribution to the most receptive targets.

Work on your offer and your website

You now address all individuals according to the stage of the funnel they are at, with adapted messaging and creatives. That’s great! Your number of visitors is skyrocketing, but you can’t convert them. Maybe it’s because you haven’t optimised your offer or your customer journey on your website enough.

• Try to increase your average basket: As you know since you have obviously read the previous paragraphs assiduously, the ROAS depends on both your expenses and your income. Obviously, the best way to maximise it is to increase your income. To do this, you have two options: increase the number of units sold, or … increase your average basket. This is the lever on which you can act the most: you can, for example, set up a discount coupon, a bundle offer or a promotion with a product offered for the purchase of another product. These types of promotions often encourage people to buy more units and therefore increase your average basket.

• Vary and adapt your landing pages: Many studies prove that the more in tune a creative message is with the landing page it refers to, the higher the conversion rate. Define your LPs strategically to improve your conversion rates, and therefore … your profitability! If you bring in people via a specific business angle, make sure you have an associated LP so that you don’t “lose” your visitors.

• Identify potential blocking points: Put yourself in the customer’s shoes: you are interested in a product, the price suits you, and you decide to place an order. You add the product to the shopping cart with a view to initiating payment, and there you have it. Additional delivery charges are added! The price goes up a lot and dissuades you from making the purchase. Here you will have lost a sale because you were not transparent enough in your delivery charges. So, it is important to identify the potential reasons why a customer may abandon a purchase, and to work on them to avoid a high rate of loss. Here are some of the most common blocking points in e-commerce: delivery costs, a payment method not taken into account, a bug in the application of a promotion, a delivery time that is too long, etc.

Accepting a lower budget in certain cases

If as a marketer you have many cards in your hand to influence a bad trend on your Facebook ROAS, you have to keep in mind that you are not a wizard straight out of Hogwarts. There are factors outside of you and your involvement that can work against you. For example, some periods of the year are traditionally quieter (July/August!) while others see ROAS explode (hello end or beginning of month pay!)

• Study the market: If your ROAS is down, check whether there is an exogenous cause: school holidays? a promotional period on which you are not positioned? an upset geopolitical situation? Many everyday factors can impact your ROAS, and a good Facebook indicator to see this is the CPM. Often, your CPMs will increase or decrease depending on what is happening in the market.

• Accept to lower your budgets: This can be frustrating, especially when you manage to spread a budget over a long period, but sometimes it is important, even necessary, to lower your expenses in order to hope to see your ROAS increase. One of the indicators that can be interesting to look at before making the decision to lower the budget is the frequency of your ads: if this is too high over a long period of time, then your market may be saturated, you have reached all the potential people and spending more is no longer useful.

Conclusion

As you can see, there are a lot of levers you can play with to maximise your Facebook ROAS. Optimising your funnel, your ads and your website are all solutions that will allow you to improve your Facebook performance and become the number one expert on the profitability of your campaigns.
If you want to go even further, and understand everything about how the Facebook ads market works, we also recommend this article on the factors that can influence your CPM.

As social networks continue to evolve, Instagram is launching two new advertising options. The first, Reminder Ads, allows users to opt-in to alerts for specific events within the app. The second, Promoted Results, ads in search results. Both of these new formats help advertisers better connect with users who are actively searching for content. In this article, we will take a closer look at these new advertising options. We will also explore the impact they can have on Instagram Ads

What are Reminder Ads?

Reminder Ads are a new option on Instagram Ads that allows users to opt-in to alerts for events on Instagram. Once a user has opted in to this option via the ad’s CTA, they will receive three subsequent notifications about that event. The first reminder is sent one day before the event, the second 15 minutes before the event starts, and the last at the start of the event. The time of the event is also displayed according to the user’s time zone. This ensures that users do not miss events of interest to them.

What are the benefits of Reminder Ads for advertisers ?

• Reminder Ads contribute to anticipation and awareness of upcoming events. With an effect on engagement and participation.
• They offer a new way to promote live events. Through live feeds, TV shows, sports events, etc., advertisers can set up campaigns to promote the event.
• Advertisers can set up reminders for multiple posts about the same event. They do not have to add new details about the event.
• Reminder ads can help advertisers stay top of mind for their audience. They increase brand awareness and potentially lead to more conversions.

What are the benefits of Reminder Ads for users ?

• Users can stay informed of events that interest them and avoid missing them.
• Users can set reminders up to three months in advance. This allows users to plan their schedule accordingly.
• Reminder ads are a convenient way for users to keep track of events in the application, eliminating the need to use other applications or reminder tools.

What is the purpose of using Reminder Ads ?

Brands can use reminder ads to promote their live events, build anticipation and encourage engagement. Among the various applications of Reminder Ads are these:

• TV shows and movies: A TV station or movie studio can use reminder ads to promote the premiere of a new show or movie, allowing users to set reminders and tune in at the right time.
• Sports events: A sports team or league can use reminder ads to promote an upcoming game or match, encouraging fans to tune in and watch live.
• In-app events: A brand or influencer can use reminder ads to promote an in-app event, such as a live stream or Q&A session, and encourage users to participate.
• Sales and promotions: A retailer can use reminder ads to promote a special sale or promotion, allowing users to set reminders and take advantage of the offer before it expires.

Overall, Reminder Ads can be a useful tool for any brand or person looking to promote an event or offer on Instagram. They offer a convenient way for users to stay informed and engaged with the app.

What are Promoted Results?

Promoted Results is a new advertising option that allows advertisers to engage with users based on contextual keywords. Much like Search with Google Ads, when a user searches for a specific term or phrase on Instagram, they will be presented with a feed of posts that match their query. Promoted Results will appear in this feed as sponsored content relevant to the user’s search.

This new location gives advertisers another way to draw users’ attention to their promotions when they are searching for specific content. This is one of the factors that can influence the CPM leading to higher engagement and conversions.

What are the benefits of Promoted Results?

Compared to the ads in Explore, which appear in the user’s News Feed as they scroll through suggested content, Promoted Results offer a more targeted approach. Users are more likely to be interested in relevant ads, since it is based on their search intent. Advertisers therefore have the opportunity to capture users’ attention at a time when they are most receptive to their message.

What are the benefits of Promoted Results for advertisers?

• Increased visibility: Promoted Results allow advertisers to place their content in front of users who are actively searching for related content. They can therefore take advantage of this to increase the visibility of their brand or product.
• More targeted approach: Compared to other advertising options on Instagram, Promoted Results are more targeted because they are based on contextual keywords. This means that advertisers can reach users who are more likely to be interested in their products or services.
• Higher engagement: Users who search for specific keywords or phrases are likely to be more engaged with relevant ads that appear in their search results. This can lead to higher engagement rates and potentially better conversion rates for advertisers.
• Better return on investment: With the ability to target users more specifically and potentially achieve higher engagement and conversion rates, advertisers can see a better return on investment with Promoted Results.

Reminder ads allow users to opt-in to alerts about specific events in the app. They offer advertisers a way to better promote their live events and encourage engagement. Promoted Results offer a more targeted approach for advertisers as they are based on user intent. They allow for higher engagement and better conversion rates. These new advertising options can have a real effect on your Facebook ROAS by offering increased visibility, more targeted ads, higher engagement and better returns on investment for brands advertising on Instagram Ads.

With the TikTok Smart Performance Campaign (SPC), it’s clear that the social network is looking to join the race of advertising campaigns using machine learning.

After Google with the Performance Max campaigns and Meta with the Advantage + Shopping Campaigns, it’s Tiktok’s turn to join the dance of performance optimized campaigns.

In this article we will see in more detail what are the TikTok Smart Performance Campaigns, how they offer new opportunities to advertisers to develop their business! Finally, a quick guide to get started with the tool and the best practices to adopt!

What are TikTok Smart Performance Campaigns?

The TikTok Smart Performance Campaigns are the first type of TikTok campaign using machine learning. They arrived at the beginning of 2023 with one objective, to improve the performance that the ad network is able to generate. This is a big issue for the TikTok platform, which now accounts for nearly 25% of advertising spending.

In order to reach the right people and maximize results, Smart Performance Campaigns are designed to incrementally scale performance. All this while reducing the number of manual actions to complete.

Who is Tiktok Smart Performance Campaign for?

Tiktok in its press release about Smart Performance Campaigns says that the TikTok SPC are convenient for advertisers who are just starting out with TikTok or those who don’t necessarily have the control over the day-to-day monitoring of their campaigns that a paid media agency might have.

These campaigns can also be used by performance-oriented advertisers because of the promise of results that it is able to bring. It can provide a significant performance gain.

What are the benefits of the TikTok Smart Performance Campaign?

Soon to be available on all mobile OS

To date, TikTok’s Smart Performance Campaign is only available on Android, but to boost the new campaign new OS availabilities will be available (iOS, … )

Saves time

TikTok SPC saves significant time on campaign creation. The system will make combinations of creative assets (Text, Video) for each auction. It will find the optimal combination that will maximize the performance of your account.

The performance reports can also inspire you for your next creations. They therefore allow media buyers to spend less time optimizing campaigns. TikTok Smart Performance Campaigns also allow for easier reporting with a simpler account structure.

Better performance observed on TikTok SPC

Smart Performance Campaigns allow for better budget allocation. In the first tests that TikTok has launched with Bolt, SPCs are performing well. Up to 80% of campaigns perform better than traditional campaigns. For the acquisition of new drivers in South Africa, the TikTok Smart Performance Campaigns reduced the CPA by 27% and generated 40% more purchase actions.

How to create a Smart Performance Campaign?

“Through leveraging machine learning, getting started with Smart Performance Campaign is as easy as it sounds. All you need is a marketing objective, budget, country, and creative assets to begin.”

TikTok

To create a campaign you just have to

• Select your campaign objective
• Select the budgets allocated to your campaign

After this step, you will have the opportunity to select the Smart Performance Campaign option

Then the classic campaign creation process

• Select targeting and audience
• Set up a distribution schedule
• Set up the tracking
• Upload the videos & texts
• You will then be able to access the reporting where you will find the detailed performance by campaign or asset used (Video/text)

Please note: As in Meta’s ASC campaigns, retargeting has been removed from the advertisers.

Best practices for a TikTok SPC

Respect the learning phase

Leave a large enough budget to allow sufficient exploration for the machine learning to prove itself. It is recommended to have about 50 conversions for the AI to be fully operational and pass the learning phase without major adjustments.

Creative assets play a key role in Smart Performance Campaigns

Creativity is the ultimate lever for Smart Performance Campaigns by TikTok. Knowing that the entire media buying process is automated, the difference with your competitors will be the quality of the creations you propose.

Adding at least 3 creatives on the different TikTok Smart Performance Campaigns will boost performance. Using UGC on TikTok is a type of creative content that works quite well to create performance. It’s a relevant practice for social media (Snapchat, TikTok, Instagram). The more videos added the better. This also leaves room for the algorithm to choose the best performing creative at the given time.

The CPM is one of the most important metrics to follow in your paid media campaigns. You must  always keep an eye on your CPM, along with the ROAS, the revenue, and the conversion rate.

However, as opposed to the other metrics, the CPM can be rather volatile. The metric can be influenced by many factors, starting with the platform on which you choose to place an ad, the geolocation, the seasonality, etc. 

In this article, we have listed and analysed 8 factors that influence your CPM. Enjoy the reading. 

What is CPM?

As a reminder, CPM stands for Cost per Thousand Impressions or Cost per Mille. 

The CPM in calculated as following:  CPM = (Total Ad Revenue/Total Impressions) * 1000

To put it even more concretely, the CPM determines how much an advertiser has to pay for its ad or banner to be seen by 1,000 Internet users. 

Sounds easy, doesn’t it? It’s not quite.

In a perfect advertising market, the CPMs would be low and everyone would reach exactly their target audience. In reality, things are a little different. 

As mentioned, the CPM is influenced by many factors, some under the direct control of the advertiser, and some that aren’t as easily manageable. We have managed to find, categorise them and give you the best advice as to how to maintain low CPMs.

8 factors that affect your CPM

1. Supply and demand 

Does your product or service abide by the law of supply and demand in advertising? 

Okay, I’ll make it less theoretical: is there an ad space available for the product you are selling?  

In digital marketing, advertisers have a demand for publishing space, where they can place their ads (also called creative assets). 

This demand is impacted by macro (economic stability) and micro (demand, product attractivity)   economic factors.

The supply is therefore represented by places (websites, or feed in this matter) where those assets can be shown. The supply is also called Inventory. 

Any company that has a product or a service to sell and is interested in digital marketing makes part of the demand. The same principle applies for those who provide the supply. 

So where does the CPM stand in relation to these factors? 

Every advertiser wants to place his product on a website that his potential customers frequent. The issue is, in a busy market, he won’t be the only one. The more advertisers try to bid on the same inventory spot, the more expensive it will become, hence influencing the CPM. 

This problem also depends a lot on seasonality, which is explained in the section below. 

2. Seasonality

Your CPM tends to increase in certain periods of the year. Retailers bid hard to win traffic around these periods: 

• Holidays. The gift buying season is definitely going to spur your CPMs up, especially around major holidays such as Christmas, Easter, Valentine’s Day etc. 
• Sales. The two major sales waves (winter and summer) make advertisers invest more into their campaigns. Using discounts, they are able to get rid of stocks and make place for new items or collections. 

Seasonality is hard to make sense of or try to control. Every advertiser is going to bid around those times of the year to try to sell their products. The best thing you can do is foresee these seasonality peaks and grant the correct budget to your campaigns, so you can make sense of those numbers. 

3. Choice of advertising platform

Your CPM is going to be influenced by the social platform you place your ad on. Your CPM will vary, from most expensive to least on the platforms as following: 

1. Instagram 
2. Facebook 
3. Snapchat 
4. TikTok 

This is however bound to change. Keep in mind that Facebook and Instagram are already the reference platforms for placing ads, however, TikTok is rapidly growing. The balance of forces might soon switch.

Kind reminder that you should be on the platform that best corresponds to your audience, not where the hype is. 

4. Audiences size 

If you want to advertise to everyone, your CPM is going to be low. But, you won’t reach the right people, your conversion and sales rates will be very low as well, and the most you will get for so little money is frustration. 

The more your target audience is precise, the more your CPM will increase. Audience restrictions that influence your CPM are: 

• age
• sex
• geographic location 
• interests 

However, targeting the right audience will make your ads be seen by your ICP’s (ideal customer profile) which will increase your sales. 

5. Campaign target 

Your CPM is influenced by your campaign target. The question to ask yourself is what do you want to achieve through your campaign? 

There are three types of campaign targets, with a funnel like organisation. 

On the top of the funnel, your campaign target will be Awareness. What you want to get from that campaign is brand awareness and reach. 

In the middle of the funnel, your campaign target is Consideration. There are plenty of variables you can target in this category: traffic, engagement, app instals, video views, lead generation etc.

At the bottom of the bottom, your campaign will focus on Conversion. What you want to get is obviously conversions, catalogue sales, store traffic, etc. 

The CPM will be lower for top-funnel targets and will increase the more you try to fix on bottom-funnel. 

We recommend you focus on doing a mixed focus, depending on the seasonality and your targets, so you can maintain a fairly stable CPM. 

6. Geography

Your CPM is directly influenced by how developed the online industry is in the country you’re targeting. The relationship between high value CPM is therefore directly proportional to the power of the online industry. 

Another geographical factor that influences your CPM is the spending power of the population in the country you are targeting. Germany, the United States, France, or the UK will generate higher CPMs, therefore the bidding will be more aggressive.

7. Creative efforts and Ad format 

Video gets more attention than static. It’s a fact. More attention means more impressions, which will automatically lower your CPM. 

As a general rule, make sure your ad, static or not, corresponds to the correct format and size. 

There is also the matter of quality when it comes to ads. If your creative asset doesn’t correspond to decent graphics and doesn’t convey a good message, then your audience will often report it, which will lower the ad quality. 

8. Device

Choice of device can influence your CPM, depending on what your audience is prone to use. Conversion rates are still a little lower on mobile compared to tablet or desktop. 

Conclusion 

To conclude, measuring your CPM and retiring most of that data can be a challenge, given all the factors that can be taken into account. 

Nonetheless, this metric helps improve your campaigns and with a good repartition of your budget, it can be proven a most useful tool.