How do I know a Facebook ad is bad?

Author

Andy at Growth Catalyst Club
October 06, 2024

Someone asked me the other day: “how do I know a Facebook ad is bad?”

The answer is - it depends. So let’s unpack this.

But first let’s say thanks to our awesome sponsor for today:

Get Your Team Booked on 3.8 Million Podcasts Automatically

It's 2025. Want to finally be a regular podcast guest in your industry? PodPitch will make it happen. Even the beehiiv team uses it!

The best way to advertise isn't Meta or Google – it's appearing on podcasts your customers love.

PodPitch.com automates thousands of weekly emails for you, pitching your team as ideal guests.

Big brands like Feastables use PodPitch.com instead of expensive PR agencies.

I’ll answer as we’re talking about sales campaigns specifically(not lead/ app events).

It might be counterintuitive but the bad ad isn’t the one with lower ROAS (higher CPA) necessarily.

  1. Let’s say there are two ads in the same ad set. Ad A is spending a lot of money but CPA is higher than breakeven CPA by let’s say 20%. And there’s ad B which is spending much less with a profitably lower CPA. In most cases, the higher spend ad is better because it gives you volume and scalability. If you’d turn off ad A and force the spend on ad A, your overall performance is likely to worsen a lot more. But you also want to check a few other things:

    1. Check if your backend metrics improved when the current highest spending ad increased in spend. There might be a lot more other variables but you want to look for the ultimate source of truth. If not much has changed, do the following:

      1. Check how long these 2 ads were running. If it’s been more than 9 days, then most likely the winning ad with the highest ad spend.

      2. Compare 1-day click CPA on all ads. If the click-through CPA is over 40% higher on the highest spending ad than lower spending ad, you might want to turn the highest spending ad because it drives a lot of view through conversations.

      3. Depending on your business revenue model and goal, you might want to check ROAS and first customer AOV between the 2 ads.

Lastly, if the ad is not spending, most likely it’s not a good ad. Don’t force the spend on it.

So ultimately the only way you know the ad is good is two things:

  1. Does it earn more budget? And if yes, what happens to our blended CPA? If it goes down when we scale the campaign (and that ad).

For lead gen, or newsletter ads, the answer will be slightly different. Let me know if you’d like me to write another one of these to answer this question.

Seeking impartial news? Meet 1440.

Every day, 3.5 million readers turn to 1440 for their factual news. We sift through 100+ sources to bring you a complete summary of politics, global events, business, and culture, all in a brief 5-minute email. Enjoy an impartial news experience.

How I can help:

  • Get a complete personalized audit of your Facebook ads. Click here to start. (only if you’re already spending over $200/day on ads)

  • Follow me on YouTube to learn how to create, and scale Facebook ads profitably.

  • Get more leads and customers by advertising your product/service to over 15,000 business owners and marketers subscribed to our portfolio of marketing newsletters, reply to this email with “I want to advertise in your newsletter”.

If this email gets into your “Promotions” folder, move it to the primary folder so you do not miss out on future issues!