Understanding ROAS: Why You Might Be Obsessing Over The Wrong Metric

When you're running ecomm ads, ROAS (Return On Ad Spend) is obviously a metric you need to keep a very close eye on. 

However, one of the most common misconceptions I come across with clients is that Meta Ads having a lower ROAS than other platforms - especially Google Ads - is a problem they need to fix. 

Comparing ROAS across two platforms can be very tempting 🤔

On the surface, Google almost always comes out looking like the clear winner 🏆 

But it isn't a fair comparison and you're doing poor old Meta a massive disservice. 🥺

Meta’s lower ROAS isn’t usually a problem and is perfectly normal in a healthy ad strategy. Not only that but a lower ROAS probably means Meta is doing a better job at top of funnel than a Meta ad account with a high ROAS. Let me explain...

😃 Meta Drives Discovery, Google Captures Demand

Meta's greatest strength is finding your people, even if they don't know they want to be found. The scale of recent investment in AI is eyewatering and much of that has gone into refining the awesome targeting machine that Meta puts at your disposal. If you get your creative right and put your trust in Meta, it will find new people, just waiting to fall in love with your brand. But they won't convert immediately. Meta woos them and gets them ready to convert. 

Google is an entirely different beast. Most Google conversions come from people already searching for what you offer or even searching on your brand name. They are a good few touchpoints into their journey - a journey that often began on Meta. Without Meta fueling that initial interest, many of those Google conversions might never have happened.

😶🌫️ ROAS Alone Doesn’t Tell the Whole Story

A lower ROAS on Meta doesn’t mean it’s less effective. It isn't doing the same job as Google. Lower ROAS just reflects the fact that Meta is speaking to a colder, broader audience. It is doing alllll the heavy lifting in your top of funnel. It is persuading and convincing and working its pants off making cold people turn warm. Cut it some slack! These early interactions are harder to measure but are essential for driving Google’s bottom-of-funnel success.

🤑 Meta Builds Long-Term Value, Not a Short-Term Fix

Meta builds your brand - organic and ads work hand in hand to nurture new customers and build brand loyalty. That takes time. Google might deliver more immediate conversions, but Meta is always working hard behind it, cultivating stronger bonds, encouraging repeat buyers and building higher customer lifetime value (LTV). Judging it solely on short-term ROAS doesn't take that into account - and is just a bit mean tbh. 

🤔 Attribution Challenges Obscure Meta’s Impact

 When navigating the maze that is ad attribution, most models favour last click - this give Google far more credit than Meta as most of us convert after a quick search in the browser of choice. Third-party acquisition tracking tools like Triple Whale or Thought Metric can help you see through the triumphalism of Google and see the true value Meta is bringing to your customer journey. 

😬 Still Not Convinced? See What Happens When You Turn Meta Off

Don't actually do this - not if you value your revenue - but cutting back on budget in Meta or turning it off completely will usually lead to a drop in conversion volume across ALL your channels. If you don't believe me, give it a go, and watch Google, organic, direct and email struggle to bring home the bacon. They need Meta, even if they don't like to admit it. 

So, What Should You Do?

🔍 Focus on total business growth and your blended ROAS. If they are all good, don't waste energy on kicking Meta for a high ROAS. 

📊 Be Holistic. Explore tools that measure cross-channel performance to understand how Meta and Google work together. Triple Whale is great for this. 

 🧪 Test and Learn: Much as I am Meta's cheerleader here, don't assume it is helping or hindering. Keep on testing to see what works - but look at results across all your platforms, not in isolation. 

⚖️ Stay Balanced: Allocate budgets strategically across Meta and Google based on your goals and each platform's strength. It is totally normal to be spending much more on Meta than on Google, with a big difference between each platform's ROAS. 

So you see, Meta’s lower ROAS really isn’t the problem you think it is. It is all part of the plan! And that plan leads to a comprehensive strategy for growth. 

If you'd like to know more about how this understanding can help inform your ads strategy and take things to the next level for your business, drop me a DM. 

#DigitalMarketing #ROAS #AdvertisingStrategy