Since ROAS is unreliable, and we know that ROAS is directly correlated to the AOV or the OV of the specific conversion tracked by Facebook, you’ll notice that the order value fluctuates significantly and unpredictably. This is exacerbated when you try to scale your campaigns—trying to have a “specific ROAS” just won’t work. The ROAS will inevitably drop as you scale, but you can control it, pushing buttons and pulling levers in marketing and operations like I mentioned in the second reason.
But that’s beside the point—as you scale your campaigns that reach $500-$1,000/day in ad spend, you’ll hit a new, more mainstream audience pocket, and this audience AOV is only $40 (vs your small pocket being $60). In this scenario, you can’t scale anymore because your ROAS is taking a hit. Whereas with CPA, you can run it back with an offer that has an AOV of $60 and test it. If it doesn’t work, keep trying at it with new offers/messaging/creative until you do succeed, and then you’ll be able to scale based on your predetermined CPA.
Lastly, now that you know your CPA on one advertising platform, you can easily replicate similar results on different platforms and maybe even get a lower CPA there (depending on the audience, of course). Since you already know to optimize for CPA instead of trying to figure out that platform’s ROAS calculations, you can expand to other channels. This doesn’t mean paid acquisition, this means doing PR, writing blog posts, having a robust affiliate network, etc. It all adds up to revenue, and if you can have a well oiled system at a consistent CPA, that’s how you scale to a million dollar brand.
While optimizing for ROAS may be working for you now, the days of its usefulness are numbered. Switching your focus to CPA not only provides you with a much more reliable metric, but is also both easier to work with and makes scaling your business a breeze. When working with CPA based optimization you can even have better results when working with an email design agency, as they can help generate more sales through the back end of email marketing. Remember: having a solid, scalable CPA is actually what’s going to drive your brand’s numbers up!
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