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Higher return on ad spend
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ROAS optimization in 2025: 5 proven methods for higher ROAS on your ads
At a time when ad prices are rising and customer attention is more fleeting than ever, it's crucial for e-commerce businesses to maximize their Return on Ad Spend (ROAS). This article explores five proven ways to improve your ROAS by 2025, based on data from the best performing ad accounts in the industry.
Audience segmentation: The key to effective ads
The most successful brands invest time in understanding their target audience "to the bone". This goes beyond traditional demographic segmentation and focuses on understanding customers' language, aesthetics and tone.
One of the most effective strategies is to match your content creators with your buyer persona. Outdoor brand Huckberry demonstrates this perfectly by using male content creators aged 40-60 with a masculine look that speaks directly to their core target audience.
"The buyer persona is often = the type of content creator you need," industry experts point out. By speaking the language of your target audience and showing situations they can relate to, you significantly increase the relevance of your ads.
Holistic sales funnel: From sales-focused to customer-centric
Analysis of top-performing ad accounts shows a clear pattern: the best results come from a holistic approach to sales funnels rather than focusing solely on conversions.
Data shows that companies that allocate their budget with 15% to awareness, 10% to engagement and 75% to conversion achieve an average ROAS of 4.3 compared to 3.9 for those that focus primarily on conversions.
Here's how each phase of the funnel contributes to overall performance:
Brand awareness (15% of budget): Builds recognition and trust with potential customers. Video and reach campaigns are effective in maximizing exposure.
Engagement & traffic (10% of budget): Warm up potential customers through interactions such as clicks, comments and visits to the webshop. Retargeting and lead generation are essential strategies.
Conversions (75% of budget): Focuses on converting interest into actual purchases through targeted campaigns, retargeting and dynamic product ads.
This balance between the funnel phases ensures a constant influx of new potential customers while maximizing conversion rates.
Content rotation: Keep your ads fresh
One of the most surprising insights from the analysis is how quickly ads lose their effectiveness. Data shows that ad performance drops by as much as 50% after just one month.
The solution is systematic content rotation. Top performers produce a minimum of 10 new creative assets every month, while poor performing accounts typically only produce 5.
"Don't: Go with your gut feeling about what performs. Do: Keep testing creatives and build on concepts that work," experts recommend.
Create separate ad sets to test new creatives, as Meta tends to favor existing "winning ads" and allocate less budget to new ones.
Ad account optimization: Avoid classic mistakes
The structure of your ad account has a direct impact on your ROAS. Here are the most effective best practices for ad account optimization in 2025:
Avoid competing ad sets: Multiple ad sets with overlapping audiences compete against each other and push up the price.
Allocate budget to one ad set at a time: This helps the ad set get out of the learning stage faster.
Use 2-3 campaigns that match your sales funnel: Structure your campaigns by awareness, engagement and conversion.
Advantage+ campaigns: Data shows that Advantage+ is the most effective campaign type on Meta in 2025.
Implementing these best practices can have an immediate impact on your ROAS without requiring major changes to your creative assets.
Focus on lifetime value over short-term ROAS
A paradigm shift among top performers is to manage by Customer Acquisition Cost (CAC) in relation to customer lifetime value (LTV) instead of focusing solely on ROAS.
A ROAS of 1.2 can actually be very profitable if the customer lifetime value is high. It's about seeing the entire customer relationship, not just the first purchase.
To maximize customer lifetime value, it is crucial to implement strong win-back strategies:
Email marketing
SMS retargeting
Active organic growth on social media
Loyalty programs
Conclusion
The path to higher ROAS in 2025 is less about one-off tactics and more about a holistic approach to your ad strategy. By implementing these five proven methods - audience segmentation, holistic sales funnels, systematic content rotation, ad account optimization and focus on customer lifetime value - you can achieve significantly better results with your ads.
The companies that adopt these best practices will not only see better short-term ROAS, but also build a more sustainable business model with loyal customers and stable growth.
