Why your Facebook ROAS sucks

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Editors Note: this article was originally written in March of 2021. It has been updated to include post-iOS 14.5 data.

So you’ve gone and done it. You set up an ad account on Facebook, you entered your credit card number, you added the Pixel to your website, and you made some ads. Now you’re watching the revenue pour in, right…?

For most wineries, that’s a hard no. In fact, the large majority of wineries that 5forests has consulted with came to us with an effective Return on Ad Spend (ROAS) of 0 to 1, and the ones with actual revenue were seeing a paltry 2 to 3 ROAS.

So why is this happening? Why are wineries consistently seeing such low ROAS numbers on their ad campaigns? We can’t speak for everyone, but there are some common mistakes we’ve found (and for our clients, solved, of course) over the past few years. We often say that 5forests specializes in “sending the right message, to the right people, at the right time”, and often this is where wineries get it wrong. There are also some technical factors that need to be addressed in order to properly track your efforts, and we’ll cover those as well.

Here are your key questions and takeaways:

The wrong message

  • What is your offer?
  • What’s in it for the customer?
  • Have you succinctly conveyed your value proposition in such a way that your potential customer is not only drawn to your ad, they’re also convinced to take action?

When it comes to ads, the messaging is super important. If you don’t get it right, the ad won’t perform well. You need to make it crystal clear what you’re offering and why the customer should care. And you’ve got to do it in a way that makes them want to take action. That’s called your value proposition – it’s like your elevator pitch for your product or service. You want to make sure that it’s short, sweet, and to the point, and that it speaks directly to what your potential customer wants and needs. And most importantly, you want to test new messaging and find the winners for your audience.

The wrong people

  • Who are your people?
  • Do you have personas?
  • Do they accurately reflect your actual customers?
  • Are you using a mix of broad targeting and remarketing to reach them?

When it comes to advertising, it’s not just about the message, it’s also about who you’re showing your ads to. It’s important to understand your target audience and ensure that your ads are reaching the right people. So, who are your people? Personas are fictional characters that represent your ideal customer, and they can help you understand their needs, wants, and pain points. If you don’t have personas, it’s a good idea to create them so you have a clear idea of who you’re targeting.

But creating personas is not enough. You also need to make sure that your personas accurately reflect your actual customers. Otherwise, you’ll end up showing your ads to the wrong people. One way to ensure that your personas are accurate is to use data to inform your personas. Look at your customer demographics, their behavior, and their interests to help you create more accurate personas.

Once you have a clear understanding of your target audience, you need to use the right targeting methods to reach them. Using a mix of broad targeting and remarketing can be effective. Broad targeting can help you reach new customers who may be interested in your product or service, while remarketing can help you target – or exclude – people who have already shown interest in your brand. By using both methods properly, you can ensure that you’re reaching the right people at the right time with the right message.

The wrong time

  • Where is this customer in your funnel?
  • Where are they in a buying journey?
  • Where are they, literally, when they read your ad… at home, at work, on a computer, on a phone?

Timing is critical when it comes to advertising. You want to make sure that you’re showing your ads to potential customers at the right time in their buying journey. So, where is this customer in your funnel? Are they just becoming aware of your brand? Are they considering your product or service? Or are they ready to make a purchase? Understanding where your potential customers are in their buying journey can help you tailor your message and offer to them appropriately.

A customer journey is the path that a potential customer takes from awareness of your brand to becoming a customer. It typically involves several stages, including awareness, consideration, decision, and post-purchase. Understanding where your potential customers are in their journey can help you tailor your message and offer to them appropriately. For example, if someone is just becoming aware of your brand, you might want to focus on building brand awareness and educating them about your products or services. On the other hand, if someone is in the decision stage, you might want to focus on convincing them to choose your brand over competitors.

A funnel is a model that represents the steps that a potential customer goes through before making a purchase. The funnel typically includes several stages, such as awareness, interest, consideration, intent, evaluation, and purchase. Similar to the customer journey, understanding where your potential customers are in the funnel can help you tailor your message and offer to them appropriately. For example, if someone is in the awareness stage, you might want to focus on introducing them to your brand and products, while if someone is in the evaluation stage, you might want to focus on providing them with more detailed information about your products or services.

By understanding both the customer journey and funnel, you can create targeted ads that are tailored to where your potential customers are in their buying journey. This can help increase the effectiveness of your ads, as you’re providing the right message at the right time.

It’s also important to consider where your potential customers are physically when they see your ad. Are they at home, at work, or on the go? Are they on a computer, a tablet, or a mobile device? The answers to these questions can help you determine what type of ad and messaging will be most effective. For example, if you know that your potential customers are primarily viewing your ads on mobile devices, you may want to specifically create mobile-friendly ads that are easy to view on a smaller screen, and point them to mobile optimized landing pages.

The wrong setup

  • Are you properly tracking sales and sending data back to Facebook for reporting with the Facebook Pixel?
  • Are you utilizing the Facebook Conversions API (CAPI) to increase your ability to record conversions both on and off the web?
  • Are you creating your ad sets to properly use conversion as the optimization event?
  • Do you have a secondary tracking method in place like UTM parameters for Google Analytics to gain deeper insights into your sales?

Once the fundamentals of your marketing have been corrected, you still have these technical hurdles ahead of you.

We recommend using Google Tag Manager (GTM) to implement your Facebook Pixel. Not only is that now a requirement on advanced winery ecommerce platforms such as Commerce7, it inherently gives you more control over the data you’re sending and where it’s going. The only downside to GTM is the fact that it is not built to be beginner friendly, most wineries will end up hiring someone like us to do this for them.

The Conversions API utilizes backend signals being sent based on user conversions, and it’s not prone to Javascript browser issues that face the Pixel, such as errors or ad blockers. This means 100% of your conversions are being sent to FB for tracking, not just 75% (based on 25% of users nationally using an ad blocker). Not only that, the Conversions API allows you to track POS sales, reservations, and club registrations. Have a tasting room? Wouldn’t it make sense to track those sales that resulted from an ad? We think so. Commerce7 wineries are lucky, they can use our Facebook Conversion Tracking for Commerce7 app, built in partnership with Treefrog Digital.

With GTM and the CAPI in place, you can monitor your Events Manager in Facebook to ensure data is being sent and recorded. From there, create your ad sets with a goal of conversions, and make sure you select the right Pixel and Offline Events set on each ad. Using Facebook’s Ads Reporting tools, track your progress and compare to previous ads to formulate a plan that works for your brand.

There’s a caveat though: iOS 14.5 introduced new anti-tracking capabilities for its users, and Facebook has had to adjust to these. What does this mean? As of now, it appears as though most of your iOS conversions will simply not be recorded. To make matters worse, these same users can’t be used for remarketing campaigns, lookalike audiences, or custom audiences, all of which are the primary tools in most marketers’ belts. With these limitations introduced, more now than ever you need to make sure the aforementioned fundamentals are solid.

Edit for 2023: the Aggregated Event Measurement tools inside of your Facebook Events manager might be able to help track iOS sales properly, but only for the first configured event. Ensure you have your domain verified in your Business Manager and set up the purchase event inside of Aggregated Event Measurement.

Setting up secondary tracking schemes like UTM parameters on links can help alleviate the gap left in tracking iOS users. Using the same GTM account, wineries should also have a comprehensive Google Analytics tracking setup to record and measure the success of Facebook Ads traffic.

The wrong partner

  • Who’s running your ads?
  • Do they understand the regulatory issues that can impact alcohol ads?
  • What benchmarks are they using?
  • Are they watching and adapting (better for your budget), or do they simply set-and-forget?

Choosing the right agency partner to run your ads is critical to the success of your campaigns. If you’re not an expert in advertising, working with a knowledgeable and experienced agency partner can help you navigate the complex landscape of digital advertising and make the most of your advertising budget.

One important consideration is whether your agency partner understands the regulatory issues that can impact alcohol ads. Advertising regulations can be complex, and it’s important to work with an agency partner that has experience working within the specific regulations that apply to your industry. This can help you avoid potential legal issues and ensure that your ads are compliant with all regulations.

Another important consideration is the benchmarks that your agency partner is using to measure the success of your campaigns. Are they using meaningful KPIs, such as conversions or ROI, to measure success? And are they adapting their strategies and tactics based on the performance of your campaigns? It’s important to work with an agency partner that is proactive in monitoring and optimizing your campaigns, rather than simply setting them up and forgetting about them.

5forests gets it right

With an approach based in research, strategy, and iteration, 5forests spends your ad dollars with care. Because we know your industry, audiences, and market, we can work on target and at speed to get your advertising campaigns going asap.

Even better, we’ll help you set realistic performance expectations and whether social media advertising is right for you.

Ready to get started? Get in touch.

5forests A black-and-white headshot of a man with short, dark hair and a light stubble. He is wearing a textured jacket with a high collar and looks directly at the camera, displaying a neutral

Michael Bourne

Michael is the VP of Engineering at 5forests, which means he’s in charge of all things tech. He oversees new product development, data discovery and strategy, SEO, analytics, and anything else we throw at him.