When it comes to digital advertising, businesses often face a crucial decision: where should they spend their marketing budget to get the best return on ad spend (ROAS)? For many brands, Facebook Ads and Amazon Advertising emerge as top contenders. Each platform offers distinct advantages, but choosing the right one can significantly impact your bottom line. Understanding how these platforms work, where they excel, and how to allocate your budget is essential to crafting successful campaigns.
In this blog, we’ll compare Facebook Ads and Amazon Advertising, diving into budget strategies, best practices, and performance metrics like ROAS. You’ll discover how each platform suits different business objectives and learn actionable tips to maximize your ad spend.
Introduction to Facebook Ads and Amazon Advertising
Facebook Ads and Amazon Advertising each offer distinct strengths, making them powerful tools for achieving different business objectives.
Overview of Facebook Ads Platform
Audience Reach: Almost 3 billion monthly active users globally.
Ad Formats: Facebook offers various ad formats, such as image ads, carousel ads, video ads, and collection ads, to engage users at different stages of their journey.
Targeting Capabilities:
Advanced Interest Targeting: Facebook Ads allow for precise targeting based on user behaviors, hobbies, and interests, enabling brands to reach niche audiences.
Demographic and Behavioral Targeting: Brands can filter audiences by age, location, and purchasing behaviors to ensure that ads are relevant to the viewers.
Key Data: In November 2024, businesses saw an average cost-per-click (CPC) of $0.7-0.8, making Facebook Ads highly flexible for varied budgets.
Overview of Amazon Advertising Platform
Audience Reach: Amazon has over 310 million users around the world.
Ad Formats: Amazon offers multiple ad formats, such as Sponsored Products, Sponsored Brands, and Sponsored Display Ads, designed to boost product visibility directly in the marketplace.
Targeting Capabilities:
Keyword Targeting: Target users actively searching for relevant products.
Product Targeting: Target ads to specific products or categories, such as competitor products.
Key Data: Amazon’s ad revenue grew to $37.7 billion in 2022, driven by its performance in converting intent-driven consumers into buyers.
Importance of Selecting the Right Advertising Platform
Choosing the right platform depends on your business goals. Facebook Ads provide a broad reach and flexible targeting for businesses focused on brand awareness and customer engagement. However, if the goal is to convert purchase-ready users, Amazon’s advertising system excels by targeting intent-based searches, especially in E-Commerce.
Ultimately, which marketing channel gets the best ROAS depends on the nature of your product and where your audience is in the buying journey.
Now that we've covered the basics of Facebook Ads and Amazon Advertising let’s discuss effective budget allocation. We'll begin by exploring strategies for optimizing your budget on Facebook Ads to ensure you're getting the best ROAS possible.
Budget Allocation Strategies for Facebook Ads
Effective budget allocation on Facebook Ads ensures that every dollar you spend works towards achieving your campaign goals. By aligning your budget with objectives, targeting, and bidding strategies, you can optimize ad performance and get the best results for your money.
Determining Budget Based on Campaign Objectives
The first step in effectively spending on Facebook Ads is defining clear campaign objectives. Whether you aim to increase brand awareness or drive website traffic, your budget should align with your goal. For example:
A brand Awareness campaign on Facebook targeting a highly specific demographic, such as luxury car enthusiasts, might require a larger budget to ensure adequate reach within this niche group. However, a broader campaign aimed at raising awareness among general audiences may be accomplished with a smaller budget.
A conversion-focused campaign on Amazon promoting a high-demand product during a seasonal sale might need a moderate budget because the audience is already primed to buy. Conversely, launching a conversion campaign for a new, unknown product could require a significantly larger investment to build trust and drive purchases.
Understanding Audience Targeting Costs and Efficiency
Facebook’s advanced targeting lets you define your audience based on demographics, interests, and behaviors, with varying costs and efficiencies.
Broad Targeting:
Broad targeting casts a wide net, reaching a general audience without specific filters. For instance, if you’re advertising a popular fitness app, you might target users aged 18-45 interested in “health” or “exercise” without narrowing it further.
Pros: Lower cost per result, ideal for building awareness.
Cons: May lead to less qualified traffic and fewer conversions.
Narrow Targeting:
Narrow targeting focuses on specific audience characteristics, such as behaviors, interests, or purchasing habits. For example, suppose you’re promoting luxury yoga mats. In that case, you might target female users aged 30-50 who are interested in “premium yoga gear” and have a history of online shopping for fitness products.
Pros: Higher engagement and conversions.
Cons: Higher costs per result.
Key Difference: Broad targeting prioritizes reach and cost efficiency, while narrow targeting focuses on precision and higher conversion potential.
Optimizing Ad Spend Through Bidding Strategies
Facebook Ads operates on an auction system, meaning your bidding strategy directly impacts how your budget is spent. You can choose between:
Automatic Bidding: Facebook optimizes for your objective at the lowest cost possible.
Manual Bidding allows you to control how much you're willing to spend per action, allowing for greater efficiency.
Now that we've covered budget strategies for Facebook Ads let's focus on how to allocate your budget effectively on Amazon Advertising.
Budget Allocation Strategies for Amazon Advertising
Effectively managing your budget on Amazon requires aligning your spending with sales goals while considering the platform’s unique ad types. Amazon's focus on conversion-driven advertising makes it essential to carefully plan how to allocate your budget to achieve the best results.
Aligning Budget with Sales Goals and Product Listings
The more competitive your product category, the higher your ad spend should be. Allocate more of the budget to products with higher margins or high demand. Prioritize your best-performing products and invest in ads directly contributing to your sales objectives.
Cost Considerations for Keyword Bidding
On Amazon, keywords can vary in cost depending on the competition. Higher competition keywords require larger budgets to win bids. By identifying broad and long-tail keywords relevant to your product, you can optimize costs while capturing targeted traffic.
Maximizing Budget Efficiency with Sponsored Products and Brands
Amazon’s Sponsored Products and Sponsored Brands ads are crucial to driving visibility. Sponsored Products work well for individual product promotion, while Sponsored Brands help with overall brand visibility. Allocating your budget between these ad types based on your goals can ensure efficient spending.
Now that we've explored budget allocation strategies for Amazon Advertising, let’s discuss best practices for maximizing your spending on Facebook ads.
Best Practices for Spending on Facebook Ads
Effectively spending on Facebook Ads requires more than just budget allocation. It’s about leveraging the right strategies to ensure your ad dollars produce the maximum return on ad spend (ROAS). Here’s how you can do that:
1. Creating Compelling Ad Creatives for Target Demographics
Crafting compelling ad creatives is crucial for engaging Facebook users. With so many brands competing for attention, your visuals and messaging must stand out.
Understand Your Audience: Use visuals and copy that resonate with your target demographic. If you target a younger audience, consider using vibrant, energetic imagery and short, snappy copy. Opt for sleek, minimalistic designs and more informative content for a more professional audience.
Test Multiple Creatives: A/B testing is a powerful tool. Experiment with different creative elements (colors, imagery, copy) to determine what generates the most clicks and conversions. Start by testing smaller campaigns and allocating more of the budget toward winning versions.
💡Pro Tip: Short videos (15-30 seconds) tend to perform well on Facebook. Pair them with strong CTAs like "Shop Now" or "Learn More."
2. Leveraging Custom and Lookalike Audiences
To maximize the impact of your ad spend, use Facebook’s Custom Audiences and Lookalike Audiences to target high-value segments.
Custom Audiences: Retarget users who have interacted with your brand, such as past website visitors or people who’ve engaged with your social media posts. This tactic often leads to higher conversion rates as you target an already familiar audience with your products.
Lookalike Audiences: Once you’ve honed in on a high-performing custom audience, you can scale your reach by creating lookalike audiences. These users share similar characteristics to your existing customers, giving you an expanded but still targeted group to engage.
💡 Pro Tip: Start with a 1% lookalike audience for more precise targeting. As you grow, consider increasing the percentage to broaden your reach.
3. Regular Analysis of Ad Performance and Adjustment of Ad Spend
Regular performance monitoring is vital to make sure your Facebook ads stay efficient. Facebook Ads Manager provides detailed analytics, allowing you to track essential metrics such as:
Click-Through Rate (CTR): A high CTR indicates that your ad is engaging the audience effectively.
Conversion Rate: This shows the results of your ad spend, such as sales generated.
Cost Per Action (CPA): Monitor how much you pay per conversion. If CPA is too high, adjust bids or reallocate the budget to better-performing ads.
💡Pro Tip: Use Facebook’s Automated Rules feature to automate adjustments. For instance, you can set rules to increase spend on high-performing ads and pause underperforming ones automatically.
With these strategies in place, Facebook Ads can become a powerful channel for growing your business and driving conversions. Next, we’ll explore how to spend efficiently on Amazon Advertising to maximize ROAS.
Best Practices for Spending on Amazon Advertising
Amazon Advertising offers unique opportunities to connect with high-intent buyers, but efficient spending is key to driving profitable campaigns. Optimize your ad types and targeting strategies to maximize your ad budget on Amazon.
1. Optimizing Product Listings to Complement Amazon Ads
Your product listings play a crucial role in determining the effectiveness of your Amazon ads. Poorly optimized listings can lead to low conversions even with a strong ad strategy.
Enhance Product Pages: Ensure high-quality images, detailed product descriptions, and clear bullet points. A well-optimized listing improves your click-through rate (CTR) and conversion rate, maximizing the value of each ad dollar spent.
Use Keywords Strategically: Keywords should align with both your ads and product listings. Research top-performing keywords relevant to your product and ensure they are integrated into your listings to drive organic and paid traffic.
💡Pro Tip: Regularly audit your product listings to ensure they stay optimized. Updating keywords based on changing search trends and adjusting product descriptions can keep your listings competitive and improve conversion rates.
2. Utilizing Advanced Targeting Features
Amazon offers several advanced targeting features to enhance your ad spend:
Automatic Targeting: Automatically matches your ads to relevant customer searches and products based on Amazon’s algorithm. This is ideal for beginners or those looking to capture a wide range of customer intent without manually selecting keywords or products.
Manual Targeting: Enables you to choose specific keywords or product targets, giving you more control. You can also add negative keywords to avoid irrelevant searches.
Product Targeting: This lets you target ads to specific products or categories. This is useful for placing ads on competitor product pages or within particular product categories that align with your brand.
💡 Pro Tip: Combining automatic and manual targeting allows you to capture both broad interest and niche, high-intent customers.
3. Regularly Reviewing Advertising Cost of Sale (ACoS) Metrics
Amazon Advertising's success is tied mainly to ACoS—the metric that reflects your ad spend as a percentage of sales generated. Keeping ACoS low means you’re driving profitable sales from your ads.
Monitor ACoS: Regularly track and adjust campaigns that have high ACoS. You can reduce bids on underperforming keywords or optimize listings to improve conversion rates.
Target Your Ideal ACoS: A lower ACoS signals efficiency for most brands, though this number may vary depending on your profit margins and goals.
💡Pro Tip: Use Amazon’s Advertising Console to track ACoS trends and adjust bids based on product performance.
With these best practices, your Amazon ads will be set to maximize efficiency, driving the highest possible ROAS. In the next section, we’ll compare the ROAS performance between Facebook Ads and Amazon Advertising to help you decide which platform is best for your business.
Return on Advertising Spend (ROAS) for Facebook and Amazon
Return on Advertising Spend (ROAS) is one of the most essential metrics when choosing the right advertising platform. Understanding how each platform generates value is necessary for making informed decisions about where to allocate your ad dollars.
Defining ROAS and Its Significance for Marketing Efficiency
ROAS measures the revenue generated for every dollar spent on advertising. A higher ROAS indicates that your ad spend works efficiently and drives strong returns. ROAS can vary depending on the industry, campaign goals, and targeting strategies on Facebook and Amazon.
ROAS Formula:
ROAS = Revenue from Ads / Ad Spend
Factors Influencing ROAS on Facebook Ads
Several factors can impact your ROAS on Facebook:
Targeting Precision: The more refined your audience, the better your chances of generating relevant clicks and conversions. Using tools like custom and lookalike audiences can significantly improve your ROAS.
Ad Creatives: Engaging visuals and compelling messaging that resonates with your audience is key to keeping costs low while improving conversions.
Campaign Objective: Campaigns focused on conversions or purchases tend to yield higher ROAS than those focused solely on brand awareness or engagement.
Factors Influencing ROAS on Amazon Advertising
Amazon’s ad ecosystem offers higher purchase intent due to its marketplace nature, which impacts ROAS in several ways:
Product Listing Optimization: Your ROAS on Amazon heavily depends on how well your product pages are optimized. High-quality listings with detailed descriptions and great reviews tend to convert better, boosting ROAS.
Keyword Targeting: The relevance and competitiveness of your keywords directly influence ROAS. Long-tail keywords often result in a lower ACoS and higher ROAS, while high-competition keywords can drive traffic but may reduce ROAS due to higher costs.
Ad Placement: Sponsored Products and Sponsored Brands have different impacts on ROAS. Sponsored Products typically offer higher conversions, whereas Sponsored Brands can build long-term brand recognition.
With a solid understanding of what influences ROAS on each platform, the next step is determining which marketing channel gets the best ROAS for your business. We'll explore that in the next section.
Which Marketing Channel Gets the Best ROAS
Choosing the right platform for your business depends on your goals and target audience. Both Facebook Ads and Amazon Advertising excel in different areas, offering unique advantages at various stages of the customer journey.
Analyzing Specific Use Cases for Each Platform
Facebook Ads: Ideal for businesses focused on brand awareness and engagement. They can be used to introduce new products or retarget website visitors.
Amazon Advertising: This platform excels for businesses selling products on Amazon's marketplace. It is best for direct product sales and targeting consumers ready to purchase.
Evaluating Industry-Specific Performance
Industry performance metrics highlight how Facebook Ads and Amazon Advertising deliver varying ROAS, depending on the product category and audience intent.
Source: Varos, Adstage, JungleScout
Consideration of Customer Funnel Stages for Each Channel
Both platforms serve different purposes within the customer funnel, which impacts their overall ROAS potential:
Top-of-Funnel: Facebook Ads is an excellent choice for reaching a broad audience, generating brand awareness, and creating engagement. Facebook allows you to introduce new products to consumers who may not yet know about your brand.
Middle-of-Funnel: Facebook can also help nurture prospects by retargeting or driving visitors to your website. However, this is where Amazon shines, as customers further along in the funnel are closer to a purchasing decision.
Bottom-of-Funnel: Amazon is a conversion powerhouse designed to capture purchase-ready consumers. If your goal is immediate sales, Amazon offers stronger ROAS at this stage because the audience is actively looking to buy.
📊 Quick Fact: Over 63% of U.S. consumers start their product searches on Amazon, making it a critical platform for bottom-funnel conversions.
With both platforms offering distinct strengths across different use cases and funnel stages, selecting the right one depends on your business goals. Let’s now summarize the key differences and provide guidance on choosing the best platform for maximizing your ROAS.
Conclusion
Facebook Ads thrive on brand awareness and nurturing prospects, while Amazon Advertising is perfect for driving direct sales to high-intent buyers. The best platform depends on whether your focus is on engagement or immediate conversions, but both require a strategic approach to maximize ROAS.
This is why brands are turning to GoMarble for expert guidance. By leveraging AI-powered insights and optimizing campaigns on Facebook and Amazon, GoMarble ensures your advertising investments are efficient, profitable, and scalable.
Elevate your ROAS—partner with GoMarble today!