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What’s considered ‘good’ when it comes to E-Commerce ad performance?

Firstly, you might simply be asking this because you want to know how your results compare to other E-Commerce brands. 

To answer this I’d give you some hard data. 

If your brand is tracking at greater than 1.78 ROAS on Facebook then you are doing better than most E-Commerce brands, based on a set of data produced by Statlas. 

This stat is taken from their compiled data from a data set of 230 ecommerce brands totalling $2.39b+ in online revenue over the last two years. 

I think we can safely assume this is a pretty good representation of the eCommerce market!

The trouble with this comparison is that it doesn’t capture the nuance of each brand’s individual strategy and where they are at in their evolution. 

The second way (and in my opinion the best way) to figure out if your ads are ‘successful’ is to tie your targets back to your goal as a business. 

Start with what you are aiming to achieve in the long term. 

Some brands choose profit over growth – they might be relatively mature, have strong organic channels, and choose only to invest in paid advertising to top up their organic revenue. 

For them ‘good’ might be a 5X ROAS that allows them to profit on every single transaction. 

Other brands might be aiming to scale to 100M users and be VC backed, with high potential for repeat purchases and low Average Order Value (AOV). A brand like this might be extremely happy with 1X ROAS. 

Do you need profit now, are you happy to break even, or can you stomach a loss if it leads to long-term profit? 

This will help you figure out what is your highest possible Cost per Acquisition (CPA).  

Your target ROAS is your AOV divided by your CPA. 

So if you can afford to pay $10 per sale and your average order value is $25 then your target ROAS is 2.5. 

Now you have your own benchmark to define success by, and this becomes your criteria for whether to spend more or less on a given channel.

Source: https://www.webtopia.co/blog/ad-performance