Categories
Digital Marketing Facebook Ads

Adjusting Facebook Ad Budgets towards a target ROAS Goal

A simple formula to adjust your Facebook Ad budgets towards a target ROAS based on past performance.

Here is a simple formula to adjusting your daily Facebook Ad budget towards a target ROAS based on past performance.

NumberOfDaysThe time period for which you want to base performance.
AmountSpentHow much did you spend during the time period.
ActualROASThe ROAS performance of your ads during the time period.
TargetROASThe ROAS target you are trying to achieve.

How I use this

  1. I maintain an evergreen campaign structure so that I can easily measure past performance.
  2. My performance target is generally an ROAS of 4.5
  3. 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%.

By Alex Czartoryski

Alex is the director of digital marketing for Manitobah Mukluks, Canada’s fastest growing footwear brand, where he helps the luxury winter boot manufacturer accelerate growth profitably via digital marketing. Alex has over 20 years experience in e-commerce and digital marketing.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s