Here is a simple formula to adjusting your daily Facebook Ad budget towards a target ROAS based on past performance.
| NumberOfDays | The time period for which you want to base performance. |
| AmountSpent | How much did you spend during the time period. |
| ActualROAS | The ROAS performance of your ads during the time period. |
| TargetROAS | The ROAS target you are trying to achieve. |
How I use this
- I maintain an evergreen campaign structure so that I can easily measure past performance.
- My performance target is generally an ROAS of 4.5
- My lookback time period is generally 7 days
Once a week (or sometimes daily if we are in a period of high activity or if we have launched a new promotion), first thing in the morning, I look at the past 7 days and run the above formula for each of my campaigns.
- If my target ROAS is very close to my actual ROAS, then I don’t bother with the calculation, nor with adjusting budgets.
- If the results call for a decrease, then I decrease the budgets.
- If the results call for an increase, then I increase budgets, but usually by no more than 10%.
