What Should Your ROAS Target Be?

The Andrew Faris Podcast

Jun 21, 2023•32 min

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Episode description

Here's a conversation that everyone in DTC has had too many times:

Agency: "What's your ROAS target?" Brand: "Well, what's a good ROAS on Meta?"

That conversation is broken on both sides. Great agencies help brands determine that answer; great brands know it isn't as simple as that.

In this episode, I'm helping you answer this question the only way you really can: with a hard look at your unit economics and customer lifetime value.

IMPORTANT NEWS!

The Andrew Faris Podcast is now available on YouTube! If you prefer to watch your podcasts, ⁠click here⁠ or head to www.youtube.com/@andrewfarispodcast to visit the AFP channel and subscribe.

EPISODE HIGHLIGHTS

[00:00:11] Determining target is crucial.
[00:04:33] ROAS target depends on CAC.
[00:10:09] Profitable ecommerce: first order profitability.
[00:14:06] Focus on first purchase unit economics.
[00:18:51] LTV affects target setting strategy.
[00:23:51] Forecast LTV for business success.
[00:28:04] No takeaway.

EPISODE SPONSOR

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EPISODES REFERENCED IN THIS SHOW

"With $10M In Revenue And $0 In Ad Spend, Isaac Medeiros Is In A Class Of His Own" (⁠Apple⁠, ⁠Spotify⁠)