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4 Tricks: [Return On Ad Spend] Calculator – Formula, In 2020

Return On Ad Spend Jagadeesh Chundru

A few simple tricks everybody can use to get a better “return on ad spend” with targeting, creatives, social proof, automation, & Re-targeting by calculating & formula

#1 Get your targeting & creatives right:

I can not say that I was doing this right when I started with Facebook Ads. But after going through hell and wasting 10’s of thousands of dollars, I realized that it doesn‘t matter how many small ad hacks I pull out of the head if my targeting & creatives aren‘t at least decent.

I worked with enough clients that had bad results in FB Ads before working with us just because they didn‘t enough time into the creative process, had a bad marketing ankle or any other mistake that could have been fixed by adjusting this

#2 Get Social Proof on your ads:

Have you ever asked your friend for their opinion of something? I think like I don’t even need to ask for this because everybody has and it’s in human nature. If you aren’t sure about buying something you ask somebody who you either know or who has already bought the product.

So if it’s that important how do I get it on my Facebook Ad? What I like to do is just copy the Ad I’m using in my Conversion Campaigns and dupe it into a PPE Campaign with about 5-10% of the Ad spent I have on my Conversion Campaign. That way it gets engagement and on the other side your CPA goes down

#3 Use automation and systems:

Did you ever want to kill an Ad or Ad set that was working well for you and now it started dying down but you gave it a few more days because you thought it will get some positive ROI for you again?

Well, that has happened to the best of us. You got emotionally attached to it and that can be deadly because it wastes money some of us may need to keep advertising. That’s why it’s important to keep some proper rules in place to protect us and our ad spent form ourselves.

Here are a few rules I always keep in place! Normally I sell this knowledge for a few hundred dollars, but let me give you a little sneak peek:

Early Pull Out Rule (Ad set Level):

If Ad set spent 2x your CPA and Purchase < 1 then Turn off Ad set

Pull Out Rule (Ad set Level) :

If Ad set spent 4x your CPA and return on ad spend < target return on ad spend then Turn Off Ad set

Early Pull Out Rule (Ad Level):

If Ad spent 1x your CPA and Purchase < 1 then Turn off Ad

Pull Out Rule (Ad Level):

If Ad spent 2x your CPA and return on ad spend < target return on ad spend then Turn off Ad

These first rules are to protect you from losing money while giving the Ad set & Ad enough chance to bring in positive results.

Revive (Ad set Level):

If spending is > 100.Rs, and return on ad spend > Target return on ad spend then turn on Ad set

Revive (Ad Level):

If spending is > 100.Rs, and return on ad spend > Target return on ad spend then turn on Ad

This Rule is important because of the delayed attribution of Facebook. An Ad or Ad set may be under performing for a few hours or days but if someone that clicked on the ad a few hours ago decides to buy that sale will still be attributed to your ad set or ad so you still remain profitable with that one. Which means it will turn on your Ad again.

Keep in mind this is just a little sneak peek of the Rules we are using to automate and secure our Ad Accounts in order to get better results.

#4 Use Proper Re-targeting:

This one was probably the part where we made the most money because we had proper Re-targeting in place. Make sure to target every possible audience where people had contact with your business.

Starting with as little as a 3-second Viewers going to people that typed in all their Credit Card Information and forgot to press the „Buy now“ button. Every one of them already had contact with your brand and has a higher potential of becoming a customer than anyone that is being reached in your cold audiences.

That’s why I always allocate about 25% of my Budget into Warm and Hot Re-targeting. But there are a few rules you should follow:

Segment each step of your Re-targeting, everybody left at some point and it’s your job to grab them at the point they left and get them to the point you want them to.

For example, if someone added something to card use a phrase like:

„Didn’t you forget something? Buy Now and get 5% off with the Code XXXX“ combined with a dynamic product ad it will recover so many abandoned carts it’s insane.

These are few tricks from my past experience.

Return On Ad Spend Formula:

Conversion Value/Cost = Return On Ad Spend

Return On Ad Spend Caliculator:

“Conversion value calculate” the amount of revenue your business earns from a given conversion.

If it costs you $.40 in ad spend to sell one unit of a $200 product, your return on ad spend is $10 for each dollar, you spend on advertising, you earn $10 back.

Cheers,

Jagadeesh Chundru