Advanced Meta Media Buying I:

5.1) Your KPIs Panel

Structure of this module:

1. Definitions
2. Create Your Own Spreadsheet

Find the spreadsheet here: KPIs Panel

1. DEFINITIONS

Breakeven ROAS = (Unit Price / (Unit Price - Unit Cost))

If the product price is 35€ and the product cost plus shipping (if you are the one paying for it) is 12€, then 35/(35-12) is 35/23 which is 1.52 as the breakeven ROAS.

If the breakeven ROAS is 1.52, that “means” that 1.53 is profitable.

But if you do ROAS 1.53 for 30 days and at the end of the 30 days you have to pay 5 salaries and you have to pay the warehouse, there’s no way you make a profit.

Therefore, the minimum tolerable ROAS would be a little bit above the breakeven ROAS and it takes into account other factors like your fixed costs, your salary, etc.

That means that your minimum tolerable ROAS is probably 1.7-2.1 but this number is impossible to calculate in a general way, and it will be unique to each case. You also don’t need to make it an exact number, it’s an approximation to use as a reference when you’re scaling.

Your target ROAS must be realistic, but also very profitable.

It’s the north star, it’s what we’re chasing.

Anything equal or above the target ROAS will be considered a super winner.

In my opinion, with a breakeven ROAS of 1.5, a solid target ROAS would be 3 to 3.5.

And therefore, a good target ROAS at scale would be 2.5 to 3.

If it’s above 3 it means you’re not scaling hard enough.

Breakeven CPA

If the CPA is the product price divided by the ROAS, then the breakeven CPA will be the product price divided by the breakeven ROAS.

UNIQUE EXCEPTION WHEN THE DIFFERENCE IN BETWEEN THE PRODUCT PRICE AND THE AOV IN YOUR STORE IS BIG

Calculate all those KPIs based on the AOV not product price.

That’s a weighted average.

You will find how to do it in the second tab of the spreadsheet.

2. CREATING YOUR OWN SPREADSHEET
   

KPIs Panel