If you’ve ran Facebook ads before, you’ll know how this feels.
You’ve spent some money on ads, and you’re getting more sales from them. Awesome.
So the next logical step is, of course, scaling more of your ads’ spend, so you can get even more sales. Right?
It rarely ever works how you want it to.
Most businesses that have tried to scale on Facebook have had to watch their returns actually decrease the more money they put in.
That’s what makes the dreaded Return on Ad Spend (ROAS) dip one of the hardest things to overcome in Facebook marketing.
Today, I’m going to show you how you can solve it.
Here’s a real-life case study of how SlimDelivery, a weight-loss meal plan business, overcame their dip in ROAS whenever they tried spending more money on Facebook ads.
Read on to find out how they went from peaking at 1.2MIL THB a month to 2.6MIL in just their second month of applying this solution:
Need more help with your Facebook ad campaigns? Click the top-right green button to get a free audit from us!
SlimDelivery’s founder had been running Facebook ads for years, and managed to get an average ROAS of 9 all by himself.
To put that into perspective, for every 1,000 baht he put into his ads, he was getting 9,000 baht back. That’s a fantastic return.
Plus his page already had a huge following by industry standards:
So what on earth was the problem?
Whenever he tried increasing spending on his ads to get more orders, his cost per order kept increasing. That meant if he touched his daily budget at all, he always ran the risk of getting fewer returns.
Here’s why that was happening:
Facebook normally shows your ads to people who are most likely to do what you want them to do.
Whenever you set up a Facebook ad campaign, they’ll force you to select a Campaign Objective.
They’re these choices in the red rectangle here:
Whether you want people to buy (Conversions), send you a DM (Messages) or comment on your posts (Post engagement), Facebook shows them to those who are most likely to do it. Within your budget.
If your budget is low, Facebook targets a smaller, more concentrated audience.
If you increase your ad budget abruptly, without making other changes to support the higher budget, Facebook automatically targets a larger pool of people.
Larger audiences generally mean there’s a higher chance you’ll be reaching a lot of people who aren’t ready to buy from you.
That means you’ll generally have to spend more on average to get someone to buy. This is partially why your ROAS dips if you inject too much money in at once.
Another reason is how fast Facebook ads die off. This is when well-performing ads gradually—or suddenly—get more expensive to run and eventually get so non-profitable that you have to stop running them.
This is something called Ad Fatigue.
The main reason why ads die off when you increase your budget is because your existing ads continuously get shown to the same people who already aren’t interested in your product.
If someone’s already seen the same ad before, and constantly aren’t interested, it makes the ad less profitable as a whole.
So unless you create enough ads to prevent ad fatigue, chances are you will lose money from abruptly increasing your ads’ spend.
SlimDelivery’s main challenge, like many business, was they didn’t know how to switch up the strategy to scale the budget.
Although the founder clocked in an average monthly revenue of 1,260,000 THB at his peak, he never could increase his budget to beat the figure.
He needed to make more to cement his business in the super-competitive and rapidly-growing health food delivery industry.
Now that we’ve understood what the source of the problem was, we identified SlimDelivery’s goals and challenges to determine the best solution for the business.
The primary goal was to be able to scale their budget without losing money.
An existing ROAS of 9 was better than most businesses, but SlimDelivery’s founder needed to find a surefire way to make more money from Facebook ads, as soon as possible.
1. The founder didn’t have a working strategy to increase his budget without watching his returns suffer.
2. He was also doing all the marketing himself, in addition to all the managerial duties. That’s why he needed someone to get him better results and eliminate the need for him to get involved.
Most marketing strategies don’t work because they’re way too complicated to begin with.
Many plans will bombard you with tons of metrics for you to constantly keep an eye on.
How many purchases are you getting? How much website traffic? Clicks? Comments? Shares?
While there is a time and place for all of those metrics, it’s always useful to ensure your strategy uses KPIs that are congruent with your goals.
And for SlimDelivery, the main KPI to help them reach and exceed their goals was none of the above.
It was the amount of messages they were getting in their inbox. Why?
SlimDelivery’s primary audience are middle to upper middle-class Thais looking to lose weight and/or live a healthier lifestyle.
These members of the audience have probably seen several weight-loss meal courses before. They needed to know why they should choose SlimDelivery over all the other brands.
And messages are the best way to get most Thai audiences to ask, get their answers, and make a purchasing decision then and there.
We’ve learned through years of serving clients globally that tuning your social media ads for direct purchases doesn’t always result in more sales.
People aren’t always ready to buy; And that’s what makes direct messages so powerful.
The KPIs for SlimDelivery were thus simple: Get more high-quality messages, while decreasing the average cost per message.
The number of messages and the cost per message were then tied back to the amount of sales they were getting.
If sales were increasing, it meant our messaging ads were working. If not, we tested with more different approaches (more on this in Step 3.2 below).
SlimDelivery’s founder was actually already using messages before he started working with us. But they got more expensive whenever he scaled his budget.
So here’s what we did to ensure that didn’t happen:
Ad testing was one of the crucial pillars that allowed SlimDelivery to scale their ad spend without losing money.
And it’s way simpler to do than most marketers/agencies make it out to be.
For SlimDelivery, we applied an A/B testing approach. This kind of testing is basically a comparison among different ad approaches to determine best practices that make the most money.
In summary, we created Facebook ads, each focusing on SlimDelivery’s different unique selling points, and showed them separately to the same audience.
We then compared the ads’ performance, to see which approach received the most high-quality messages, for the least cost.
We chose several customer benefits to test SlimDelivery’s meal plans with. These include:
Value Point 1: Lose Weight Without Exercising
Value Point 2: Healthy Food that Actually Doesn’t Taste Bland
Value Point 3: Super-Convenient Healthy Meal Plan
Value Point 4: Try First, Pay Later
After getting the initial results, we narrowed the options down to the two best-performing approaches: Value Point 2 and Value Point 4.
Here are the ads so you can see how different they were and how we executed them:
Value Point 2: Healthy Food that Doesn’t Taste Bland
And Value Point 4: Try First, Pay Later
We then tested them against each other to find out which of the two approaches received the most messages at the least cost.
And we had a winner:
Now that we knew people were wowed by healthy food that doesn’t taste bland, we made more variations of the winning ad.
This ensured SlimDelivery was not wasting most of their budget on “what if” approaches.
And that meant they could spend most of their budget on best performers, and leave a smaller budget to test with new approaches to minimize the chances of ad fatigue (from Step 1).
The better the ads, the less likely they’ll die fast.
Talking about budgets though, here’s a crucial tip on scaling your ad budget: Don’t scale an ad’s budget by more than 20% per day.
In other words, if you plan on increasing your budget for a well-performing ad that’s spending 100 THB, you shouldn’t add more than 20 THB to it per day (so the budget now becomes 120 THB).
Then when you want to add to it again the next day or a few days later, observe the same rule.
So 20% of 120 is 24 THB. That means you’ll most likely be safe adding anywhere from 20 to 30 THB to the ad at that stage.
I know it’s tempting to add twice as much money to an ad that’s already getting so many sales. But the 20% rule is in place so that all the problems in Step 1 don’t happen to you.
20%, we’ve learned, is the sweet spot for safely scaling ads to gradually get to the ad’s peak performance.
Of course you can be a little more adventurous, say, with 25% or 30% daily scaling.
But the higher you go, the higher chance you risk to ruin your ads’ performance.
Prior to working with us, SlimDelivery’s founder had all the ads made himself. He was his own art director, and that meant he didn’t have the time to make all the branding elements consistent.
He needed a design team to ensure that his branding was professional and always congruent with the objective of getting more sales. But why a team?
Designers and art directors in professional teams practically exist to help your brand become something the audience can recognize and remember.
Design teams don’t only help you create the brand; They also use their expertise to find creative approaches to market the brand better.
For SlimDelivery, we helped them establish consistent branding across all ads that were produced, to build trust with the audience.
This process wasn’t immediate. We tied new designs back to the messaging KPIs specified above, to make sure the new designs were actually increasing their sales.
There’s no point to rebranding if it doesn’t increase your sales.
Here’s what our initial ads for SlimDelivery looked like:
And here’s what our recent ads looked like:
This step helped increase both immediate, first-time purchases and repeat purchases from audiences who had already signed up for SlimDelivery’s courses before.
These 3 steps worked together to finally help SlimDelivery scale their budget and BEAT their all-time revenue peak.
Before working with us, SlimDelivery’s founder was never able to achieve more than 1,260,000 THB in revenue per month.
This is what happened to his monthly revenue after he started working with us:
By keeping the cost per message at an average of 89.12 THB, we were able to ensure the gradual scaling would bring more returns.
We also hit a peak in the second month, more than doubling the founder’s all-time best, all with this safe, scale-friendly strategy!
1. Focus on 1 KPI at a time and tie it back to increasing your sales.
Driving messages with a clear cost per message benchmark made it super simple to see which ads or tests were working and which weren’t.
That’s how we kept things lean and moved quickly to find winning practices to help SlimDelivery scale safely.
2. Never stop testing.
One approach will never cut it forever. Ad fatigue is real and you have to continue testing in order to scale without losing money.
You need better ads on standby for when your best ads die. That’s how you can keep reaching and exceeding your target revenue every month.
3. Scale your budget gradually.
Make it a practice not to increase the budget of an ad more than 20% at a time.
Otherwise your audiences will become more saturated and Facebook will find you audiences that are less likely to become your customers.