Moteefe Live: How to Maximize your Return on POD Ad Spend
How do you know if your ads are working? Calculate your return on ad spend (ROAS). This marketing metric measures the amount of revenue your business earns for each dollar it spends on advertising. Knowing your ROAS helps you determine whether or not you are making a profit. In this week’s livestream, Thomas Gentleman and Aidan Kessell discuss everything you need to know about ROAS and what you can do to maximize it. Some of the topics they cover include:
- 01:24 – What is ROAS?
- 02:20 – How do you calculate your ROAS?
- 04:54 – What’s the big mistake that everybody makes?
- 07:05 – Why is it that if an ad is break-even or better you should always leave it running?
- 10:59 – How to leverage on your ROAS for Father’s Day
- 13:24 – The importance of targeting very big audience
Don’t have 30 minutes to spare? Here’s a summary of what you missed:
What is ROAS?
ROAS stands for return on ad spend. It is a marketing metric measures the amount of revenue your business earns for each dollar it spends on advertising.
How do you calculate your ROAS?
Essentially, you take your revenue and divide it by your advertising costs. For example, if you spend $20 on ads which results in selling one $100 product, your ROAS is 5—for each dollar you spend on advertising, you earn $5 back.
Why is it that if an ad is break-even or better you should always leave it running?
It’s better to leave breakeven and profitable ads running because it allows the Facebook pixel to collect more information about your audiences. Plus, this allows your old ads to gain more engagement like likes and comments. More engagement leads to more impressions and interactions. And you can always retarget your ads to people that may have interacted with the ad.
The importance of targeting very big audiences
Lately, there’s been great results when testing with big audiences. There’s an audience expansion button on Facebook to help you increase the size of your targetted audience. For example, if you’re targeting fishermen, using a targetted keyword like “fishing rod” may result in a fairly small audience. Hit the expand audience button and Facebook will expand that out to the entire population of the regional country or area that you’re targeting.
“Nothing works for everybody. Test, test, test. Every niche is different. Know your own numbers and go for it.”
If you are still aiming to increase your POD knowledge, use our free resources to help you increase sales in your POD business:
- Moteefe School – A free 13-video Teachable course taught by POD expert Thomas Gentleman. The course takes you through the process of how to create original POD designs, advertise your product and use Facebook Ads.
- Moteefe x Marcazo Global Facebook Group – Join our community Facebook group and connect with active sellers who are keen to share their experiences and knowledge on all things POD.
- Moteefe Live streams – Moteefe’s YouTube channel features live streams every Thursday with POD experts Thomas Gentleman and Aidan Kessell.
- Facebook Ads Translation Guide – A downloadable PDF containing common phrases in multiple languages for marketing purposes.
You can watch the full live stream on YouTube or read the transcription below. Want to be notified next time we go live? Don’t forget to tune in every Thursday for weekly live streams with Thomas and Aidan where they discuss all things Print on Demand!
You’ve got to know your numbers. You’ve got to know what you’re at.
— Thomas Gentleman
A: Good afternoon, everyone, and welcome to this week’s Live Stream, where we are going to be talking about ROAS or return on ad spend and how to max your return on your POD ad spend as always, and you’d expect nothing less. I’m joined by Thomas Gentlemen, resident POD expert. How are you doing, Thomas? OK?
T: Yeah, I’m good, thanks. I hope everybody’s doing well out there. And yes, this week return on ad spend something that I think a lot of people. Don’t look at if they do, they’re not looking at the right things. There’s but there’s a simple, fairly, relatively simple, we’d say a relatively simple calculation to overcome this. So let’s jump straight into it. As I say, smash up the likes, hit subscribe. We’re on YouTube this week.
What is ROAS?
T: So if you’re visiting, your support is appreciated. So when you’re driving traffic to your white label store on Moteefe.com. Moteefe.com, the interim print on demand solution we’ve got fulfilment centres all around the world, so that your items are locally produced and shipped to happy buyers with a low impact, it’s a great business model. Nothing has to be prepared for very low barrier to entry. But as with everything, you have to invest a little bit in either building a page or a blog or a traffic source or a Twitter feed or an Instagram account somewhere where you can drive traffic or a lot of people, a lot of our users do use paid traffic so that you can drive large amounts of traffic very quickly.
And when you’re doing that. You’re spending money and whenever you’re spending money, it’s a good idea to keep track of it. Now, not a lot of people do keep track of it, which is why we see some weirdness going on. But it is important to keep track of it. So let’s say that your your set up, you’re running. It can be any advertising platform is going to be the same. You can calculate your return on ad spend in the same way some platforms like Facebook will calculate it for you as a way of finding out.
How do you calculate your ROAS?
Let’s say that you’re running on Facebook and you’re running to a product on Moteefe, the way that you calculate your break-even return on ad spend is quite simple. So let’s say that you were selling a digital product, a product that didn’t require any cost, no base cost at all. If you have if you’re selling the product for ten dollars. Then it doesn’t it doesn’t for every ten dollars that you spend, you want to get ten dollars back, that’s your break even point.
So your return on ad spend needs to be one. But if you’re setting a print on demand product or any other physical product where you have to pay something towards the cost of the product yourself, you need to a very simple calculation for that. What you do is you take the price that you’re selling the product at. So let’s say you’re selling at twenty six dollars and 99 cents for a T-shirt. The base price of Moteefe is around six dollars. There’s some discounting going on if you if you sell more, but it’s around six dollars, just just use that for the simpleness of calculation is about the right price.
You take the 26 dollars and ninety nine cents that you’re selling the product for, and then you take away the six dollars that the. Product costs you. Then you take the original, so that gives you twenty dollars and ninety nine cents spoiler. So you’ve got your twenty six point ninety nine cents. That’s your product. The price you’re selling at. Take away the price of the product. Then you go back to having your twenty six, ninety nine, the price you’re selling and you divide that 26, 99 by the 2099 that you’ve got left, and that will give you your breakeven return on ad spend number.
Aidan? Aidan’s here poised with the power of the Internet, Google machine.
A: Power of the Internet. This week is different it’s the power of the calculator, the calculator. So the ROAS as or the indication there would be 1.285. 1.2 to keep it simple.
T: 1.285 is what you need to hit. Don’t keep it simple. They need to hit this number to break even so, it’s critical that they know, you know, exactly what this is and you’re hitting it. So 1.285 is the minimum return on ad spend that you want to see from selling that product to be in profit.
What’s the big mistake that everybody makes?
T: Now, what’s the big mistake that everybody makes here, they look at the cost per purchase. But the cost per purchase doesn’t tell you the full picture because the cost per purchase will only show you the. That’s per purchase per checkout. It doesn’t tell you how many items were ordered at checkout. And I can tell you that a lot of our sellers here at Moteefe.com are making more than one sale per checkout, not every checkout, but more than one sale per checkout, basically more than one sale per checkout, selling more than one item per checkout.
So we see a lot of sellers with a what we call a PPO, a product per order ratio. This is the number of products that you’re selling per checkout per order that comes in of anywhere between one point three to one point five, some even above one point five, some all the way up right towards two, which is great to see. Well done to the people that are doing that. Now, if you’re using Facebook, Facebook will calculate that for you into the return on ad spend, because some of the data that we send through to Facebook when there’s a purchase made includes the items in the basket and their cost.
But what we don’t send through is the base price. So that’s why you’ve got to do a little bit manually yourself. If you just rely on the cost per purchase, let’s say that you were making 15 points on a sale. Let’s just say that you’re making 15 dollars on the sale and you’re getting all of your sales on Facebook fo $15.50 cents. So that’s the cost per purchase. And you think, oh, are making fifteen dollars per T-shirt I sell.
So I’m losing 50 cents per purchase? Well, no, because actually if you check, you’ll see that more than you’re selling more than one product per order. It could be one point two could be one point five, whatever it is all of a sudden now you’re in profit. Right. It’s very important to understand which products you’re setting, where you’re selling them, what your normal order looks like, and then calculate your return on ad spend. And then if it’s at breakeven or better, then you always leave it running.
Why is it that if an ad is break-even or better you should always leave it running?
T: Why do you leave it running? Two reasons. One, the more times the pixel fires, the better. It’s great. You’re using Moteefe have white label stores, which means that you’re building brand awareness. When people get the product, they will remember the domain name that they bought from return and then buy more stuff later on. And also, if you’re driving traffic, that means that some people are going to land on the page or engage with the ad or leave a comment.
You know, that kind of engagement hit the hit. The page may be add to cart, maybe get all the way to check out, but for some reason they don’t buy. The train arrives, the cart explodes, dinner’s ready in microwave pings, the microwave pings.
Why microwaves have to ping, I never know. But they do. Ping it is a thing. So something happens, they don’t complete the purchase and you can retarget all of those people very easily with a platform like Facebook, many advertising platforms have the same thing. So actually, even more of those people from that had even more of that ad spend will actually be going towards making you money. When I first started out, I didn’t know any of this.
I it was just, oh, I’m losing money. I break, even break even so good, I want to be making at least X percent or I can’t scale this because it’s not above that. Actually, when I look at the numbers, it’s ah, hang on. I compare the money that I’ve spent today on my ads and the money that I’ve got on my Moteefe dashboard. And I seem to have a lot more money on my Moteefe dashboard than I would have thought I should have had from the ads.
There must be something going on here and that’s all about return on ad spend. So one point hitting a ROAS a return on ad spend of just 1.285. I believe that was the number is very, very doable.
A lot of products, you’ll see some gurus out there and they like my return on ad spend is like three, three point five. Yeah, it has to be because they’re cost goods, their cost of their goods. Maybe they’re getting the goods for like twenty dollars and they’re selling for like 25 or 30 dollars. So, of course, it has to be high because that’s just their break even point, they don’t tell you. Actually, I was just at my break even point and I was running.
I was running it. So 1.285, it’s only 28 percent more. It’s very, very doable. Say, this is why another reason why print on demand is a great thing, a great thing to to to get into, especially now because your margins are great. You’ve got a huge amount of room from six dollars all the way up to twenty six. Ninety nine. To and that’s saw your profit, so you’ve got all of that to play with, so you’ve just got to get over that little bit.
You’ve just got to get above getting the same amount back as you spent on the ads to be in profit. And then, as I say, you’ve got retargeting, you’re building a page, you’re building a brand. You can be target everybody that liked it. You can be target everybody. The viewers viewed the product but didn’t end up buying. Even if I was at 1.3 there, I’d be like, actually, this is fine because I know that I’m retargeting people.
Ads also have little dips in performance and they come back up. I might not scale that one up if I was at 1.3, but I’m not going to turn it off.
I know that with my products per order ratio and everything else that’s going on, that I’m pretty good there. So you’ve got to know your numbers. You’ve got to know what you’re at. You’re going to have different products. You might be you’ve got a T-shirt in that you’re selling in the campaign. But maybe there’s also a mug. Maybe there’s also a sweatshirt. You’re going to have different orders, structures around there, so you’ll never get it perfectly like, oh, I always sell this much or that much, but just work out exactly what you need for your for your main driver product and then get everything else set up to work with that.
How to leverage on your ROAS for Father’s Day
So you want to select two products that work with work with that product. So if you’re sitting in the dad nasch, you would want to drive the traffic to say a cushion cushions are very popular. Great product to sell. Father’s Day is coming up. You covered that as ad nauseum on the channel that Mother’s Day, but that’s because it’s such a huge sales opportunity. So you’ve got your main products, a customised custom text. We have custom text at Moteefe.
It’s great to check out personalised cushion for a father within that cart. You can use a collection tag. To show other products that a father might like, so you would want to use one collection tag for the main product and also that collection tag on two other products so that you can control what’s in the cart there. And then you add all of that one collection tag into the store. Now, in the store, you’re going to have your general tag that everything in the stores got, but you want more control over it.
So just use one tag. For three products, three campaigns at that tag to the store as well, remove all of the other tags from those three products and then you’ve got the control there. And that’s when you can start to say, oh, actually, I’m selling a cushion, but maybe a mug would work well with that cushion let’s put a mug in there. That’s OK. Let’s put it. I’m selling a mug. But people are coming in, they want to buy the mug, but let’s show them a hoodie for $39.39
$39.39, $39.99. Always use charm pricing. That’s whole other thing, great books out there on that kind of stuff anyway. $39.99, because they might they might put that in as well. And all of a sudden my return on I spend that I need for selling mugs because mugs are normally cheaper, is going to be higher than a T-shirt. But if you can if every fourth order you’re getting a sale for a hoodie at $39.99, all of a sudden that changes the game.
That’s, that’s a that’s a huge boost to average order value and it adjusts all your numbers so supercritical. Know where your money’s going. Don’t turn off ads that are making money or break even, even if they’re slightly losing, you’re still going to hit people up on the retargeting, your pixel still firing and the other final tickets. The other final tip of the week.
The importance of targeting very big audiences
T: What’s the final tip of the week, Aidan? I haven’t told him so he doesn’t know.
A: Put me on the spot there. Uh, final tip of the week…
T: Big audiences. Aidan what is it?
A: Big audiences. Huge ones.
T: How big?
A: The biggest.
T: Very, very big audiences, we’re seeing some very good data coming in. I’m seeing some very good data coming in excuse me, of hitting up big audiences is something that I’ve always played with. It normally works more in Q4, but even now I’m saying big is beautiful. Big audiences work great. Five million, 10 million, 20 million, 40 million. 50 million, 70 million.
Millions and billions, you do need probably a better pixel data and you need to get maybe the first 50 100 sales on your pixel first, I’m not a big fan of thinking about, oh, I can’t do this because the pixels.. try it, especially in big nations like Families Father’s Day. You can push it right out there because of they’re seeing some very interesting results with big audiences. Also, there’s a little button audience expansion in Facebook. So let’s say you you’re targeting a fisherman, always like a fishing rod is your interest target. Fairly small interest target. Well, it’s a fair interest target if you hit the expand audience button, that will then expand that our Facebook expand that out to the entire population of the regional country or area that you’re targeting.
And it says if we can find buyers extra to this audience, then we’ll hit them up too with the ad. So with that, we’re seeing I’m seeing that start to work more and more. Now, it won’t work for everybody.
Nothing works for everybody. But it’s something again to test, test, test, test. Every niche is different. Know your own numbers and go for it.
A: That’s huge. It’s just I had this idea hanging on to it went from something you could do daddy’s chair and then have a similar similar style with Daddy’s mug as the up-sell himself. Bang, that’s going to put your product right up. Or like my dad, for example, has a fishing chair so you can have daddy’s fishing chair for the cushion for his back. Then Daddy’s fishing coffee mug. Right. Similar design. So you can definitely bump up your average order value.
And I just want to take a quick second. Say hi, Robert. Good afternoon to you too. Robert says hi to us both.
T: Hey, Robert.
A: Yeah, it’s definitely something that’s easily overlooked. You can’t just look at the cost purchase and just that’s it. And big mistake cause, I dare say people who haven’t tuned into this one could potentially turn off some profitable winners and crazy days. That does happen. But no, this one formula to rule them all.
T: Happens all the time. Don’t make sure that you know what your return on that spend is. What’s the calculation? Again, I’d make the calculation is you take the … you want to do it? you can do it. You know it.
A: It’s the selling price divided by the product price minus the base cost.
T: Yes. So get your product price, what you’re selling at. You’re selling at $26.99. Find out what the cost per the cost of goods are. All of that’s showing very clearly when you’re building the products on Moteefe. Take that away, so 26, if your base price is a six dollars, you take the six dollars away from the $26.99, leaving you twenty dollars and ninety nine cents. Then you go back to your original $26.99 and you divide that between, you divide that into $26.99 and that will give you a return on ad spend that you need for break even of 1.285.
That’s your target.
A: Yeah, so I’m going to take it, take a second us to do a bit of shameless plug, if that’s OK.
T: Well, I don’t know. Let me check with. Yes, apparently shameless self plugging is allowed on the Internet. You might I thought, I know this is new ground for the Internet, but yes, apparently shameless self plugging is a thing on the Internet.
A: I dare say I’m not the first and I’m definitely not going to be the last. So for you guys and gals who are watching on YouTube, there’s a link in the description for two things. If you’re new to POD, there’s a Moteefe Facebook ads course with start to finish to get set up and running. Secondly, there’s also a group to the Moteefe Global Group, which is a group where you can find myself and my colleagues, Anna and Flor, who are Success Managers and our jobs are to help you find success on Moteefe.
So go on there. Add me. Send me a message. If you’ve got questions, guys, about ROAS, what does it mean? What’s the equation again, Aidan? Message me. Message Ana. Message Flor and we’ll be more than happy to help. And if you have found something that’s showing initial good promise, a potential winner that you could scale into other countries, let me know. I want to know what countries you want that translated to so we can scale and take over the world.
And also, would it be better to scale it into different niches sometimes doing well in the nation? Let’s do it to the cat niche. Iiu jitsu. Let’s do taekwondo. Let me know and I can help you with free design, support and translations at your fingertips. Just send me a message, OK, guys? Thomas, that is my self-plug. Over.
T: Fantastic. Yes, please do exploit all of Aidan’s, surplus value in the group. That’s what he is there for. He is very good at having his value extracted.
So get in there and get all over him, as I say. Well, I hope that everybody’s found this super helpful. Thank you for joining us on YouTube this week. Smash up the likes. Leave a comment. Subscribe, bell icon. That’s it, that’s it. So just very quickly to wrap up, this is this is super, super important topic. If you’re running, if you’re spending money, know what you’re spending money on, make sure that you’re not turning stuff off.
That’s absolutely already working. It’s always a process of testing to find something that works. And I see a lot of things, a lot of people message me all of the time and. They’re turning off stuff that’s working and they’re moving on to stuff that’s actually worse than the last thing that they’ve got, and then that’s when you start to. You know, keep the right mindset, this does work it’s 2021. It’s a great time to start.
It’s always been a great time to start. I’m seeing people getting absolutely amazing results. Yeah, but you do need to know what you’re doing to the extent of where your money’s going and what money you’re getting back for that spend. And all of that is laid out. Very simply, find out your base price, set a selling price, take the base price from the selling price, divide the original price, the selling price by the new to the new number that you’ve got from taking away the base price from the selling price.
That will give you a return on that spend if you break even your gold and let it run. Retarget, make money. Moteefe.
A: Thanks, guys. Yeah, we’ll see you next week. Have a good weekend.
T: Thanks very much.