Solved: Meta Ads ROAS Issues in Los Angeles for App

Hi there,

Thanks for reaching out!

I've had a look at the situation you described. Battling for ROAS on Meta app ads in a market like Los Angeles sounds like a proper nightmare, and honestly, it's a very common problem. The good news is, you're not stuck. The bad news is, the solution isn't to just find a magic targeting option for LA. The problem is almost certainly your underlying strategy. I'm happy to give you some initial thoughts and guidance on how we'd approach this to break through that plateau.

We'll need to look at why you're stuck in Los Angeles...

First off, let's be brutally honest. Trying to get a good ROAS in Los Angeles for a mobile app is like trying to win a knife fight with a spoon. It's one of the most saturated and expensive digital advertising markets on the planet. Every other startup with VC money is carpet-bombing the same audience you are. This is a classic scaling problem, we see it all the time with software and app campaigns. You hit a ceiling in one market, and pushing more budget just makes your CPA go through the roof while ROAS plummets. You've basically exhausted the pool of people most likely to convert in that specific area.

The instinct is to try and 'optimise' your way out of it within LA. Tweak the creative, find a slightly different interest to target. But that's just rearranging the deckchairs on the Titanic. You're fighting for scraps in an expensive market when there's a whole world of potential users out there. Unless your app is a hyper-local service that only works in LA, your strategy of focusing there is the root cause of your problem.

You can get around this by expanding your horizons. We've managed app growth campaigns for clients where we've driven over 45,000 signups at under £2 per signup. The cost difference between markets can be staggering. An install in LA might cost you $15, while a user of the exact same quality in Chicago or even London might cost you $5. Why pay three times as much for the same result? It doesn't make any sense.

This isn't about just targeting cheaper, lower-income countries for the sake of vanity metrics. That's a mistake we often see people make. You receive a lot of cheap installs but they never convert or spend money. I'm talking about strategically expanding to other Tier 1, English-speaking markets where competition is simply less fierce. You'll need to run separate campaigns for different country groups to manage budgets and bids effectively. But the principle is sound: stop paying the 'LA tax' on your ad spend.

I'd say you're focusing on the wrong metric...

The second, and arguably bigger, issue is your obsession with ROAS. Now, I know that sounds mad. You're a marketing manager, ROAS is your bread and butter. But in the early stages of scaling an app, focusing on immediate ROAS is a trap. It forces you into short-term thinking and makes you terrified of any acquisition cost that isn't pennies.

The real question isn't "How low can my Cost Per Install go?" but "How high a CPI can I afford to acquire a truly great user?" The answer lies in its counterpart: Lifetime Value (LTV). If you don't know your LTV, you're flying blind. You have no idea if a $15 CPI from LA is a disaster or a bargain.

Let's do the maths. You need to know three things:

• Average Revenue Per User (ARPU): What do you make per active user, per month?
• Gross Margin %: What's your profit margin on that revenue?
• Monthly Churn Rate: What percentage of users do you lose each month?

The calculation is simple: LTV = (ARPU * Gross Margin %) / Monthly Churn Rate.

Once you know a user is worth, say, $300 in gross margin over their lifetime, your perspective completely changes. A healthy 3:1 LTV:CAC (Customer Acquisition Cost) ratio means you can afford to spend up to $100 to acquire that user. Suddenly, a $15 CPI doesn't look so scary, does it? It looks profitable. This is the maths that unlocks aggressive, intelligent growth. It frees you from the tyranny of chasing cheap installs and allows you to focus on acquiring high-value users, wherever they might be.

To make this tangible for you, I've put together a simple calculator below. Plug in your own numbers and see what your LTV really is. This number should become your new north star, not your daily ROAS figure.

You're probably telling Facebook to find you non-customers...

Here is another uncomfortable truth about awareness campaigns on platforms like Meta. When you set your campaign objective to "Reach" or "Brand Awareness," you are giving the algorithm a very specific command: "Find me the largest number of people for the lowest possible price."

The algorithm, in its infinite wisdom, does exactly what you asked. It seeks out the users inside your targeting who are least likely to click, least likely to engage, and absolutely, positively least likely to ever pull out a credit card and pay for your app. Why? Because those users are not in demand. Their attention is cheap. You are actively paying the world's most powerful advertising machine to find you the worst possible audience for your product.

I see this all the time. Marketing managers think they need to "build the brand" first. For a startup that needs to prove ROI and generate revenue, that's a death sentence. Awareness is a byproduct of having a great product that solves a real problem, not a prerequisite for making a sale. You get awareness when a customer loves your app and tells their friends. That only happens through conversion.

So, you must switch your campaign objective to optimise for a conversion. For an app, this would be 'App Installs' or, even better, a specific in-app event like 'Trial Started' or 'First Purchase'. When you tell Meta "find me people who will install my app", it uses its trillions of data points to find users who have a history of installing and using apps like yours. You are aligning your goal with the algorithm's strength. You might pay a higher CPM (cost per thousand impressions), but you'll be showing your ads to people who actually matter, which will bring down your effective cost per high-quality user and improve your ROAS in the long run.

You'll need a better system for finding your audience...

Okay, so you've expanded your geography and you're optimising for conversions. Now what? You need a systematic way to find the right people. Throwing a bunch of random interests at the wall and hoping something sticks is how you burn through a budget with nothing to show for it. I've audited so many accounts where people are just testing audiences that don't align with their actual customers.

You need to think like a funnel. I usually prioritise audiences in order, from the highest intent (and most likely to convert) to the broadest. Here’s a structure that works for pretty much any app or e-commerce business.

BoFu (Bottom of Funnel - Hottest Audiences):

These are people who are already familiar with you or are showing strong buying signals. They should be your absolute first priority.

• -> Previous Purchasers / Subscribers: People who have already given you money. You can target them for upsells or reactivations. A lookalike audience of these people is pure gold.
• -> Initiated Checkout / Added Payment Info: They were *this* close to converting. A simple retargeting ad can get them over the line.
• -> Added to Cart / Started Trial: High intent, but they got distracted. Remind them what they were looking for.

MoFu (Middle of Funnel - Warm Audiences):

These people have engaged with you but haven't made a move to buy yet. Your job is to nurture them.

• -> App Event Engagers: People who opened the app, completed a level, viewed a product, etc. but didn't purchase.
• -> Video Viewers: People who watched a significant portion (e.g., 50%+) of your video ads. They are clearly interested.
• -> Social Media Engagers: People who liked, commented on, or saved your Facebook or Instagram posts.
• -> Website Visitors: People who visited your landing page but didn't install.

ToFu (Top of Funnel - Cold Audiences):

This is where you find new customers. The key is to be smart and methodical.

• -> Lookalike Audiences: This is your most powerful tool. You MUST create lookalikes based on your best customers first (e.g., a 1% lookalike of all users who made a purchase). Then work your way down the funnel: lookalikes of trial starters, lookalikes of installers, etc. This is far more effective than guessing at interests. We had a SaaS client for whom we reduced their CPA from £100 down to just £7. Results like this demonstrate the importance of moving beyond basic interest targeting.
• -> Detailed Targeting (Interests/Behaviours): This is your last resort when you don't have enough data for lookalikes. Be specific. Don't target "Technology". Target followers of competitor apps, users of complementary software, or people with very niche interests that align perfectly with your user persona.
• -> Broad Targeting: Only use this once your Meta Pixel has thousands of conversion events. You can then trust the algorithm to find the right people with minimal input, but you definitely need that data foundation first.

You should structure your campaigns around this funnel. Have separate long-term campaigns for retargeting (BoFu/MoFu) and prospecting (ToFu). Test audiences within those campaigns and be ruthless about turning off what doesn't work after it's spent about 2-3x your target CPA. This structured testing is the only way to reliably find winning audiences and scale your spend profitably.

I've detailed my main recommendations for you below:

This is a lot to take in, I know. But these are the strategic shifts you need to make to get out of the high-cost trap you're in. It's not about finding a secret button to press; it's about building a fundamentally sound advertising machine. To make it clearer, here is the main advice I have for you, broken down into actionable steps.

Following this framework requires discipline and a bit of a leap of faith to move away from what you've been doing. But it's a process that works. It's not just about setting up an ad and hoping for the best. It's about understanding your audience, optimising your targeting, creating compelling ads, and fine-tuning your entire funnel.

This is where professional help can make a huge difference. With years of experience scaling app campaigns and a deep understanding of the advertising landscape, an expert can help you implement these strategies far more quickly and effectively. We can provide insights that you might not have thought of and take over the entire implementation and optimisation process for you, ensuring that every dollar you spend is working to grow your user base profitably.

If you'd like to chat further and have us take a look at your ad account, we offer a completely free, no-obligation strategy session where we can dig into your specific numbers and build a tailored growth plan for you.

Regards,

Team @ Lukas Holschuh