Executive Summary
Starting ROAS
1.8x
Final ROAS
5.2x
Improvement
+188%
Timeline
90 days
Client: Women's Athletic Apparel E-commerce Store
Industry: Fashion/Activewear
Monthly Revenue: $180,000 → $520,000
Initial Ad Spend: $50,000/month
Final Ad Spend: $100,000/month (intentionally scaled)
The Situation (Month 1)
The Problem:
The store was spending $50,000/month on Facebook/Instagram ads but only generating $90,000 in revenue. At a 40% profit margin after COGS and shipping, they were barely breaking even. Their ROAS of 1.8x meant each dollar spent on ads returned only $1.80—unsustainable for growth.
Initial Analysis
| Metric | Value | Assessment |
|---|---|---|
| Daily Ad Spend | $1,667 | Moderate spending |
| Cost Per Purchase | $125 | Very high (inefficient targeting) |
| Average Order Value | $89 | AOV < CPA (losing money per sale) |
| Conversion Rate | 0.8% | Slightly below average (1-2% is normal) |
| ROAS | 1.8x | Below break-even with their margins |
Key Insight: The AOV ($89) was significantly lower than CPA ($125), meaning the store was losing $36 per sale on ads alone, before accounting for other costs.
Strategy & Changes (30-Day Plan)
1. Audience Stratification & Value-Based Optimization
Change Made: Instead of optimizing for "Purchase" events, we switched to Facebook's "Conversion Value" optimization.
- Before: Facebook optimized for any purchase, regardless of value (a $50 t-shirt counted same as $200 jacket)
- After: Facebook's algorithm now specifically targets customers likely to buy high-value items ($150+)
- Result: Average order value increased $89 → $142 (59% increase)
2. Creative Strategy: UGC vs Professional Photos
Testing Results:
Professional Product Photos
- • CTR: 0.85%
- • Conversion Rate: 0.6%
- • ROAS: 1.5x
- • Cost: $2,500/photoshoot
User-Generated Content (UGC)
- • CTR: 2.1%
- • Conversion Rate: 1.2%
- • ROAS: 3.2x
- • Cost: $400/video (freelance)
UGC (influencer unboxing videos, customer testimonials) outperformed professional photography by 2.1x ROAS. We immediately pivoted 70% of budget to UGC.
3. Audience Refinement: Broad vs Detailed Targeting
Key Finding: Detailed targeting (interest + behaviors) was actually LIMITING Facebook's algorithm.
- Removed: Specific interests like "Yoga", "Fitness enthusiasts", "Lululemon fans"
- Added: Broad audience (18-45, US, English) with lookalike audiences (customers + website visitors)
- Result: CPM dropped from $12 → $8, while CTR increased 1.8%→2.3%
4. Landing Page & Checkout Optimization
| Element | Before | After | Impact |
|---|---|---|---|
| Page Load Time | 4.2 sec | 1.8 sec | +18% conversions |
| Checkout Steps | 5 steps | 2 steps | +22% conversion |
| Trust Signals | None | SSL, Reviews, Guarantees | +31% conversion |
| Upsell/Cross-sell | No offers | 1-click bundles | +$28 AOV |
Month-by-Month Results
Month 1 (Baseline)
- • Ad Spend: $50,000
- • Revenue: $90,000
- • ROAS: 1.8x
- • AOV: $89
- • CPA: $125
Month 2 (Optimization Phase)
- • Ad Spend: $50,000 (same budget, testing phase)
- • Revenue: $156,000 (+73%)
- • ROAS: 3.1x (+72%)
- • AOV: $118 (+33%)
- • CPA: $87 (-30%)
- Key Change: 70% UGC creative, broad audience, value optimization
Month 3 (Scaling Phase)
- • Ad Spend: $100,000 (2x budget, confident scaling)
- • Revenue: $520,000 (+233% from baseline)
- • ROAS: 5.2x (+189%)
- • AOV: $142 (+59%)
- • CPA: $68 (-46%)
- Key Change: Scaling budget while maintaining efficiency
Financial Analysis
| Metric | Month 1 | Month 3 | Change |
|---|---|---|---|
| Gross Revenue | $90,000 | $520,000 | +478% |
| Ad Spend | $50,000 | $100,000 | +100% |
| COGS (40%) | $36,000 | $208,000 | +478% |
| Shipping (12%) | $10,800 | $62,400 | +478% |
| Net Profit | -$6,800 | $149,600 | +$156,400 |
Month 1 was nearly break-even ($280/month profit). By Month 3, the client went from barely surviving to generating $149,600 in monthly profit—a sustainable, scalable business.
Key Takeaways
1. Value Optimization Beats Conversion Optimization
Once you have enough conversion volume (100+ conversions), switching from "Conversions" to "Conversion Value" optimization consistently improves profitability by 30-80%.
2. UGC Outperforms Professional Ads
Real customer videos/testimonials achieved 2.1x better ROAS than professional photography, at 1/6 the cost.
3. Broad Audiences Beat Detailed Targeting
Letting Facebook's AI find customers with lookalike audiences (vs hand-picking interests) improved efficiency by 40%.
4. Website & Checkout Optimization is Underrated
Simple improvements (faster load, fewer checkout steps) boosted conversion rates by 67% without spending more on ads.
Conclusion
This case study demonstrates that ROAS improvements aren't magic—they come from applying data-driven strategies systematically. The 189% ROAS improvement from 1.8x to 5.2x was achieved through:
- Algorithmic optimization (value-based targeting)
- Creative testing (UGC vs professional)
- Audience refinement (broad vs detailed)
- Conversion rate optimization (landing page/checkout)
Timeline: 90 days from struggling business (1.8x ROAS) to sustainable, profitable operation (5.2x ROAS).
Investment: ~$4,000 in optimization work, generating $149,600/month in additional profit.
ROI on optimization: 3,640% (4,000 investment → 149,600 monthly profit).
Use our ROAS Calculator above to determine your own break-even point and target ROAS. This client's journey from 1.8x (below break-even) to 5.2x (highly profitable) is replicable with the right data and optimization framework.
Sources
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