This happens oftentimes, and is scary, and upsetting.
Why does the Facebook’s ROAS drop when we increase the ad budget of a winning campaign or ad set?
It is not a Facebook bug, but an advertiser obstacle and it can be fixed.
The biggest mistake new Facebook advertisers make is that they increase budgets of existing winning campaigns and attempt to scale vertically. When the budget is increased by more that 20%, it is likely that the learning of your campaign will reset and it will start underperforming. Although budget increases within 20% are recommended by Facebook, but even a little change to the budget can destroy a nicely performing campaign.
The best thing to do is to let the good campaigns run as they are and not make changes to them. These can be paused when ROAS drops consistently for 2 to 3 days.
So, how do we scale then?
Before you scale ensure that you have a few creatives (3 – 6) that give exceptional results consistently.
Create many campaigns with various targeting options that are most likely to perform and a daily budget of around 1.5 to 3 times your target CPA. Use winning ads only in the new campaigns. This is also referred to as horizontal scaling.
Keep the new winning campaigns running and pause which do not perform.
Repeat till you have stable campaigns for your entire daily budget.
It is important that you take the ads creatives to the next level with lots of testing.
When we increase the budget, we compete with more advertisers for conversions.
If the ads do not resonate very well with a large buying audience, they start getting delivered to audiences that are not right now in the buying mode (based on the intelligence and predictions of Facebook algorithms).
Only the best performing ads get delivered to audiences that Facebook has predicted will buy now.
A good way to diagnose this is to keep an eye on the checkouts initiated to purchases ratio. If this ratio increases, it would suggest that the ads are not winning and thus failing to get delivered to audiences that buy now.
Here are some more tips to mitigate this –
- Do not make any edits to a winning campaign/ad set, instead simply duplicate, make necessary edits, publish and see if it takes off.
- Ensure your audience is large enough for your budget and the ad frequency does not rise too much (i.e same people getting to see more of your ads)
- You can use target cost, cost control, or target ROAS bidding strategy, but in my experience it really slows down the delivery of ads and minimizes the number of purchases. But it makes sure that the ROAS/cost per purchase is in control, if it is not, the ads will almost stop delivering.
- Promote the best sellers.
- If sales do not increase proportionately with the budget, simply focus on the creative and communication, with the above tips in the back of your mind, and you should be able to control ROAS as you scale your campaigns.