What does "Return on Ad Spend" mean?
The return on ad spend is a relatively new term in the advertising world, but it's a very important one. Your ROAS is the measure of how well your company's marketing campaign performed according to the money spent on that campaign. In other words, if you spent $10,000 and generated $20,000 worth of sales, your ROAS is 200%. That means for every dollar you spend on ads you can expect two dollars back.
How do I measure return on ad spend?
Measuring your ROAS will vary slightly depending on what type of marketing or advertising campaigns you're running. You may be paying per click or per impression, so the metrics will be different in both cases.
How do I improve my Return On Ad Spend?
Improving your return also relies on careful measurement of your campaign's performance. If yours is a company that runs multiple ads at once, it may be smart to allocate money between your different ads and landing pages. For example, if one ad is offering a $50 discount on your product while another is selling a $100 version, you should be able to boost your ROAS by increasing the budget of the more successful ad.
Why do I need to track my return on ad spend?
Your company's bottom line is ultimately tied directly to its sales -- which are in turn tied to whether or not your marketing campaign was effective. By tracking ROAS closely, you'll be able to tell how effective each aspect of your marketing campaign was and where you can improve for the next time around.
If you keep an eye on your ROAS, you'll know whether or not to continue investing in a campaign that's not performing well. You never want to throw good money after bad, so tracking and measuring the return on ad spend is critical to making sure your advertising dollars are spent effectively.
Here are some tips on how to maximise your ROAS
1. Make your ad as relevant to the search as possible - If your ad isn't relevant to what a searcher is looking for you are going to pay more per click because Google's main goal is that users see an ad they feel will be most relevant to them.
2. Run tracking codes - Tracking codes are scripts placed on a website that track each visit and return information back to web analytics software where you can measure things like bounce rates, average time on site and pages viewed by visitors from various sources (Facebook, organic, PPC etc.).
3. Keep testing - We all know that there is no secret formula that works every time which means we have to keep trying new things until we find something that works.
4. Increase your average order value - By increasing the average amount your customers spend with you will naturally increase your conversions and ROAS.
5. Increase traffic to your website - The more people who visit your site via PPC, organic search or social media the better chance that they will convert into paying customers.
6. Use a call tracking number - By using a phone number in your ad rather than just a website address can help improve calls to action and conversion rates which means more sales.
7. Cross-sell & up-sell products - Another way to improve ROAS is by selling additional items that are related to what someone is already viewing on your site (i.e.: Shoes >> Sell socks).