In the second half of 2018, Facebook released an addition to its value optimization tool box with Minimum ROAS (Return on Ad Spend) bidding with an aim to offer advertisers an additional level of control to reach higher value users.

Minimum ROAS was introduced for app advertisers to set the lowest acceptable return on ad spend, permitting Facebook algorithms to optimize ad delivery to reach those who will complete in-app purchases- in turn allowing more control over campaign value. Having tested this feature in the initial release stages, Bidalgo has seen that, in the right hands, this feature has the power to really deliver- and with the right best practices in place it can provide significantly higher ROAS compared to other value optimization campaigns.

Based on months of trials and tests, extracting best results possible, experts at Bidalgo deliver 3 essential driving factors for this new feature:

1. Don’t Set Your Minimum ROAS Too High

Success using this feature is dependent on determining the right Minimum ROAS value. At face value this seems easy enough, but not setting the right value can put results in jeopardy. We have seen strongest results when starting with a low Minimum ROAS value – this practice accumulates more conversions. To reach results sooner, it’s advised to increase this value over time to maximize profitability and scale up to an optimal value which can be determined by this strategic calculation:

A common pitfall is setting Minimum ROAS threshold too high as campaigns may not be able to meet this threshold or spend the campaigns full budget.

Min ROAS calculation

2. Targeting

To give campaigns the best possible chance for success using Minimum ROAS, the right audience targeting methodology needs to be put into practice. Facebook themselves advise that value optimization works best when reaching audiences of at least 2 million people, so app advertisers need to establish best practices to access a wide reach using Minimum ROAS. The best way to achieve this is to:

1. Opt-in to more placements (run on ‘automatic placements’);
2. Make sure any lookalike audiences are constructed based on purchase related custom audiences;
3. Use Minimum ROAS as a feature to explore new and unproven audiences- if Minimum ROAS target is not reached, spend will be reduced.

3. Platform

Trying to crunch data and manage campaigns around ongoing new features like Minimum ROAS without a third party platform can prove burdensome. Seeing the impact of Minimum ROAS in line with other key metrics and all other ad set data is essential for success. Using a third party platform like Bidalgo allows a clean all-in-one performance view, without the need to delve into each and every ad set, allowing users to see the direct effect of Minimum ROAS value changes. Being able to obtain a macro vision of new feature performance can prove make or break for campaign success, so it’s important to use a platform that can adopt important features like Minimum ROAS from the get-go.

Minimum ROAS is fast proving itself as another important milestone in Facebook’s arsenal of value optimization tools. Adopting it in the right way has been key to results for advertisers with PerBlue seeing ROAS surges of 93%, compared to standard activity, within a few weeks of usage.