A good Facebook Ads ROI is between 4x and 5x of your spend, but can go even higher with the right strategies. Learn how to calculate and improve the return on your FB ad campaigns.

If you’re running ads on Facebook, you’re one of 8 million advertisers taking advantage of this popular platform. And, like those other 8 million advertisers, you want to ensure you’re getting your money’s worth.

To calculate the success of your Facebook ads, you must determine your overall return on investment (ROI).

Throughout this article, we’ll discuss what Facebook ads ROI means for your business, how it differs from another popular metric (ROAS), how to calculate your own ROI, and more.

What is Facebook ads ROI?

Facebook ads ROI is a metric brands can use to determine how profitable their Facebook ad campaigns are.

It’s a basic calculation that uses the following formula:

ROI = ((Total Revenue – Total Investment) / Total Investment) x 100

So let’s say you’ve spent $5,000 on the month’s Facebook ads and generated $20,000 in profit. The formula would look like this:

ROI = (($20,000 – $5,000) / $5,000) x 100

Your total ROI, or return on your investment, would be 300%. That means you’ve tripled your investment, which is a pretty good ROI. We’ll talk more about the type of ROI you should look for below.

What is the difference between Facebook ads ROI vs. ROAS?

Another metric to consider for your Facebook advertising is ROAS, or return on ad spend.

Your ROAS is part of the ROI equation, giving you the following formula:

ROAS = (Total Revenue / Total Ad Spend) x 100

So if we use the above example, you’d have an equation that looks like this:

ROAS = ($20,000 / $5,000) x 100

This means you’d have an ROAS of 400%.

ROI is a bigger-picture metric, often used to track return on investment for all Facebook endeavors, while ROAS may be used for a specific ad campaign.

As David Gaglione, founding partner of PS212 says, “ROAS gives a direct report of the profit you gain for that specific ad campaign. A high ROAS equates to a high ROI, while a low metric would alert you that the campaign isn’t successful and might be a poor use of funds to continue — at least without making any adjustments to your strategy.”

How to calculate Facebook ads ROI

Now, let’s talk about how to calculate ROI for Facebook ads Understanding your digital ads ROI is important for your digital marketing strategy because it tells you whether your ads are successful.

Follow these four steps to calculate your Facebook ads ROI:

  1. Set your goals
  2. Put together your tracking capabilities
  3. Measure your results
  4. Calculate your ROI

1. Set your goals

The first step in nearly any type of ad strategy is setting goals. What do you want to achieve through your Facebook campaigns?

Facebook Ads Manager allows you to create ads for different objectives, including:

  • Getting phone calls to your business
  • Increasing website visitors
  • Boosting Facebook content to reach a wider audience
  • Getting more Facebook messages
  • Increasing your Facebook Page follower count
  • Generating more leads
  • Increasing app installs
  • Generating sales on your website or Facebook Shop

There’s even an AI option that will automatically create personalized ads that choose the most relevant goal for your Page based on your current settings.

You’ll build Facebook ad campaigns based on your objective. If you want phone calls, the CTA and button will lead viewers to your phone number. If you want to increase website traffic, you’ll lead people to a landing page on your website.

Your goal or objective will help calculate your ROI since you’ll use metrics surrounding that objective to find your data. For example, the number of calls you receive through your ad.

2. Put together your tracking capabilities

The next step is to set up your tools to properly track your Facebook ads performance. There are several tools available, but the most basic stack will include a Facebook Pixel and your Google Analytics dashboard.

Tony Mariotti, CEO of RubyHome, explains, “Attributing ROI can be complex, especially with cross-device tracking issues. We’ve refined our approach by integrating Facebook Pixel data with our analytics tools to gain a more comprehensive view of ad performance.”

3. Measure your results

Once you’ve started tracking, you can easily measure your results. To do this, look back at your initial goals and objectives. The metrics and KPIs you use to measure your ROI will depend on your goals.

For example, if your goal is to generate website traffic, clicks or cost per click (CPC) may be the main metrics you monitor. Or, if you want to boost brand awareness, you may monitor your ad’s reach or the number of new Facebook likes you’ve received.

Matthew Montez, founder of MBC Group, states, “Measuring the ROI of Facebook ad campaigns can be somewhat tricky, but it’s absolutely doable with the right metrics. I usually look at click-through rates (CTR), conversion rates, and the number of high-quality leads generated for specific indicators.”

Montez continues, “One specific campaign that stands out was one where we directed ad viewers to a landing page that collected email addresses for a new product launch. By using a clear call-to-action and visually appealing ad creatives, we saw a significant ROI associated with customers obtained from that list.”

Keep an eye on your Facebook insights or your Google Analytics to measure your results and use them to calculate your average ROI.

4. Calculate your ROI

Finally, calculate your Facebook marketing ROI. To do this, assign values to different types of conversions.

For example, what’s a new like on Facebook worth? What’s a new customer worth? Calculate your overall customer lifetime value (CLV) to determine what value to assign to each new lead, conversion, or website click.

You’ll then use that value to calculate your total revenue for your Facebook ad campaign.

So let’s say you have a revenue of $75,000 and you spent $30,000 on your campaign. Using the formula we covered above, your ROI calculation would look like this:

ROI = (($75,000 – $30,000) / $30,000) x 100

That gives you a 150% or 3x ROI.

What is a good Facebook ads ROI?

According to our data, a solid ROI from Meta is between 4-5x ROAS. Some companies may get a lower ROAS, while still being profitable while others see 10x+ ROAS. It depends vastly on your products, services, and industry.

However, working with an experienced team is key to achieving the highest ROAS and ROI possible.

Aside from strategies like A/B testing, competitor analysis, and audience research/refinement, we’ve seen two things stand out when improving Facebook ads and social media ROI:

  1. Working with an experienced team that stays on top of the latest social media platform and marketing changes, and knowing the target audiences’ needs/pain points in the respective industry.
  2. Tracking performance on a granular level to clearly determine marketing ROI.

At HawkSEM, we use our proprietary tool, ConversionIQ, to granularly track the customer journey and help our clients achieve a better ROI.

How to improve your Facebook ads ROI

If you want to improve the ROI of your existing Facebook ads, consider these five tips as you build your campaign:

Understand your target audience

First, learn everything you can about your target audience to build the right targeting for your Facebook ads campaigns.

Phil Strazzulla, founder of SelectSoftware Reviews, explains, “For businesses looking to improve their Facebook ads ROI, focus on audience segmentation and personalized ad content. Tailoring your ads to specific audience segments can significantly enhance engagement and conversions.”

And we’ve seen that proven true with cold, hard results. Our team helped Apotheke create personalized Facebook ads that increased conversion rates by 25% and grew ROAS year-over-year by 62%.

Build out a comprehensive audience, use lookalike audiences, or upload a list of your existing leads to create your ad’s target audience.

Optimize your landing pages

If your landing pages don’t immediately continue the experience from your Facebook ad, you’ll lose your new website visitors before converting them. So optimize your landing pages with messaging that matches the ad and guides new website visitors to take action.

Stephen Keighery, CEO and founder of Home Buyer Louisiana, has a tip for improving lead generation.

“Once a customer is directed to the company website, adopting an opt-in form in the homepage is the best way to generate leads,” shares Keighery. “A potential client will put in their details, and can be later notified with the latest developments you offer, boosting the conversion rate.”

The things you need to optimize on your website will depend on your ad’s objective and the actions you’re hoping the new website visitor to take.

Create compelling messaging

Your messaging should help to make your sale. Make sure your Facebook ad copy makes viewers want to take action.

Like Draven McConville, CEO of Klipboard, says, “If the content of your ads is related to the wants and needs of your audience, they’re more likely to be interested and make a purchase, which will increase your return on investment.”

Once someone has clicked through your ad, the copy on your landing page should be just as compelling to entice them to complete the action.

Flynn Zaiger, CEO of Online Optimism, recommends creating different ads based on where your target audience is in the customer journey.

“Businesses should also employ a full-funnel strategy, creating specific ads for different stages of the customer journey, which allows for a more comprehensive evaluation of ad effectiveness and better ROI optimization,” explains Zaiger. “At a minimum, the business should create three sets of ads for awareness, consideration, and the conversion stages.”

Test different ad formats

Try different ad formats to see what works best for your goals and audience. Use different objectives, test image vs. video, and other adjustments to find the best ad combo for your business.

Joe Amaral, founder of Anthem Software, explains, “I can’t stress enough how significant the impact of a singular change in the ad copy or image can have on ad performance. Continuous testing leads to better understanding of what resonates with the audience, and importantly, optimizes ad spend.”

Campbell Tourgis, COO at Wainbee agrees, saying, “Strategically experiment with different Facebook ad placements to better connect with users and optimize ROI. Don’t simply default to the automatic placement option. Instead, assess which platforms within the Facebook ecosystem align most effectively with your campaign objectives and target audience.”

Facebook allows you to A/B test certain ad elements within a campaign so the best-performing ad set appears to your audience instead of lower-performing ad sets. Or you can run smaller campaigns before investing in a larger campaign.

Use retargeting ads

Finally, use retargeting ads to remarket products and services to people who’ve already seen your ads or visited your website. Retargeted people are much more likely to convert since they’re familiar with and interested in your business.

The takeaway

Want to ramp up your Facebook ads’ ROI? Focus on your targeting, optimize your copy and landing pages, and test different ad types.

Another option to improve your ROI is to work with a team of experts who can manage your ad campaigns for you.

Learn more about how HawkSEM can help you create next-level Facebook ads that get the return on investment you’re looking for.

Chloe West

Chloe West

Chloe West is a digital marketer and freelance writer focusing on topics surrounding social media, content, and digital marketing. She's based in Charleston, SC. When she's not working, you'll find her reading a book or watering her plants.