As a D2C brand, reaching the right customers while controlling your ad spend is crucial. However, many businesses struggle with Meta (Facebook & Instagram) ads because they don’t have a clear strategy. They set up campaigns, but they often waste money on ads that don’t convert. This is where a structured approach can make all the difference.
In this blog, we’ll walk through a 2-phase strategy that has helped many D2C brands significantly improve their ROAS (Return on Ad Spend). The goal is to start small, test often, and scale smartly. Let’s break this down in simple terms with real-world examples.
I. The Exploration Phase: Laying the Foundation for Success
Why the Exploration Phase Matters
The first 30 days of running Meta ads should be focused on testing. This phase is like doing a “trial run” to see which ads and strategies work best before you start spending big money.
Common Problem: Imagine a brand that starts running Meta ads without testing—They might put up one ad with one image, one message, and expect it to perform. But this is risky. What works for one brand might not work for another.
Solution: The exploration phase involves testing different ads, creatives, and targeting options so that you can find the winning combination.
Step-by-Step Breakdown:
1.Identify Your Marketing Angles:
- Start with 3-4 ad types: Video, static image, and carousel. Different formats perform differently depending on your audience.
- Example: A supplement brand may create a video ad explaining the benefits of their product, a static image ad showing before-and-after results, and a carousel showcasing customer testimonials.
2.Campaign Structure:
- Create one campaign, and for each ad format, create a separate ad set. For example, you’ll have one ad set for the video, one for the static image, and one for the carousel.
- Campaign Budget Optimization (CBO): This is a strategy where Meta decides how to allocate your budget across the ad sets. However, for now, use Ad Set Budget Optimization (ABO) so you can control how much budget goes into each ad set.
- Budgeting Tip: Set the daily budget for each ad set to at least 2x the price of your product. For example, if your product costs $50, the daily ad spend for each ad set should be $100. This helps collect enough data for testing.
3.Targeting:
- During this phase, keep your targeting constant. Use relevant multi-interest stacks. For example, for a skincare brand, you might target people interested in “natural skincare,” “health and wellness,” and “beauty products.”
- Avoid Advantage+ Targeting at this stage—this is Meta’s automated targeting option. You want to keep control and gather insights.
Key Metrics to Track During Exploration:
- Impressions: Aim for 10,000 impressions per ad set. This ensures you’ve gathered enough data.
- Cost per Purchase (CPP): You want to see a reasonable cost per sale. If it’s too high, that ad is likely not working.
- Purchase-to-Checkout Rate: If your ad is getting clicks but no purchases, pause it. Something’s off with the offer or the landing page.
When to Pause Ads:
After reaching 10,000 impressions, pause ads that don’t lead to conversions (sales). You want to end up with 3-4 high-performing ad sets that show a minimum of 2x ROAS.
II. The Targeting Phase: Refining and Optimizing for 3X ROAS
Why the Targeting Phase is Crucial
Once you’ve identified your best-performing ads from the exploration phase, it’s time to build on what’s already working. The goal here is to find the best audience targeting options that will help scale your campaigns while maintaining high ROAS. By narrowing in on the right audience, you can significantly improve conversions and get even better results.
Common Problem: Many advertisers, after finding a good performing ad, simply boost the ad without refining their audience. This leads to audience fatigue, ineffective spending, and a decrease in ROAS.
Solution: We need to optimize targeting by testing new segments, customizing the audience, and refining messaging while scaling. This ensures you are only showing ads to the most likely converters.
Step-by-Step Breakdown:
1.Pick the Best-Performing Ads:
Review all your ads from the exploration phase and choose the top 2-3 that generated the best purchase volume and engagement.
Key Metrics to Review:
Cost per Purchase (CPP): The ad with the lowest CPP is a strong candidate.
Return on Ad Spend (ROAS): The ad that delivered the highest ROAS (above 2x or 3x) should be prioritized.
Click-Through Rate (CTR): A high CTR indicates good interest and engagement with the ad. If your CTR is under 1%, this ad might not be effective.
2.Example: Let’s say a supplement brand runs three ads—one video explaining benefits, one static ad with before-and-after images, and one carousel with testimonials. The carousel with testimonials brings in more sales and has a 3.5x ROAS. This ad should be the focus for the next stage.
3.Create New Ad Sets with New Targeting:
Layering New Audiences: Take the best-performing ads and test different audience segments. You’re now looking for groups of people who are more likely to convert based on behavior, interests, and demographics.
Retarget Website Visitors: Start with people who have visited your website or viewed specific pages (such as product pages or landing pages). These users are already familiar with your brand and are more likely to convert.
Example: A customer visits a skincare brand’s website and views the “anti-aging serum” page. You can target them again with a specific ad for that product.
- Lookalike Audiences: Create Lookalike Audiences based on your top 10% of converters or website visitors. These audiences are more likely to resemble your best customers and are great for targeting at scale.
Example: A hair care brand can create a 1% Lookalike Audience from people who have made a purchase, which will mirror the behavior of your best customers.
- Interest-Based Targeting: Layer different interests to build more granular segments. For example, for a fitness supplement brand, target people interested in “Weight Loss,” “Gym Equipment,” “Health and Wellness,” and “Natural Supplements.” The more precise the targeting, the better the results.
Example: In the case of the fitness supplement brand, targeting people who are interested in both “Yoga” and “Protein Supplements” can increase the likelihood of conversion.
- Demographics: Don’t underestimate the power of demographic targeting. While age, gender, and location might seem like basic categories, using them in combination with behavioral or interest-based targeting can significantly boost ROAS.
Example: Target women aged 25-45 who are interested in “Organic Beauty” products for a skincare brand. You can even add occupation targeting like “healthcare professionals” if your product is wellness-oriented.
- Time-Based Retargeting: If a potential customer has interacted with your brand in the past 7 days, they may need a nudge. Retargeting people who engaged with your brand but didn’t purchase in the last week, 14 days, or 30 days with a different offer or ad can bring them back.
Example: After the initial visit, offer them a 10% discount for a product they viewed in the last 14 days.
III. Scaling for Success: The Path to Consistent High ROAS
1. Gradual Budget Increases
- Once you find your top-performing ad sets (with at least 3x ROAS), slowly increase the budget by 20-30% every few days.
- Avoid drastic budget increases, as Meta’s algorithm may struggle to optimize if the budget increase is too large.
Example: If your ad set is performing well with a $100 budget and getting a 3x ROAS, increase it by $20-$30 per day, but keep monitoring to ensure performance stays stable.
2. Refreshing Creatives and Ad Fatigue Management
- Ad fatigue can cause your performance to drop once people start seeing the same ad repeatedly. To avoid this, refresh your creatives every 7 days.
- Creative Ideas:
- Use Reels with engaging content like customer stories, product demos, or behind-the-scenes footage.
- Static Ads with “Before and After” comparisons, such as product usage over a month (Day 1 vs. Day 30).
- Carousel Ads featuring real customer testimonials that tell a story about how the product improved their life, rather than just directly promoting the product.
Example: A supplement brand might show a 30-second Reel of a doctor explaining the benefits of their product, then a customer testimonial, and finally a “Day 1 to Day 30” journey.
3. Use Strong Offers for Bottom-of-Funnel Audiences
- Focus on the bottom-of-funnel audience who have already engaged with your brand but haven’t converted yet. These users are closer to making a purchase.
- Strong Offers: Use exclusive offers like 10% off, free shipping, or buy one, get one free to create urgency.
Example: For a fitness supplement brand, you can run a “24-Hour Flash Sale” targeting people who added items to their cart but didn’t complete the purchase. Offering an extra discount will push them toward conversion.
4. Monitoring and Optimizing During Scaling
- After scaling, always monitor metrics like ROAS, CPA, CTR, and conversion rate. If the ROAS starts to dip, pause the underperforming ad sets and focus on the ones that are still profitable.
Example: If a new Lookalike audience ad set starts performing poorly after budget scaling, pause it and focus on the high-performing interest-based targeting set.
Conclusion:
By following these steps, you can refine your Meta ads strategy, optimize your targeting, and scale efficiently while maintaining a solid ROAS. It’s a dynamic process, and by constantly refining your ad sets, creatives, and audience targeting, you’ll be on your way to consistently achieving 3X or higher ROAS.
