ROAS: Understand what it is and how to invest wisely in your advertising

ROAS is us to measure the profits earn through paid mia advertising and is a key metric for anyone investing in that type of marketing campaign.

Felipe Carrer

Aug 19, 21 | 5 min read
Find out what the ROAS metric means and how to use it to measure your Ads campaigns
Reading time: 4 minutes
Every marketing manager knows exactly what digital marketing is all about , but what companies are most interest in is knowing whether the strategies appli are giving the expect results. That is why there is a ne to understand how, for example, ROAS works .

This formula is appli to advertising actions on the Internet. And to find out what this metric is, how to calculate it and in what situations it can be us, continue reading this post.

ROAS is an acronym for Return on Advertising Spend

making it one of the most important metrics for online advertising, especially to clarify one of the key points of marketing management: when investing a certain amount of money in marketing , how much return will it generate?

This should be taken into account in all the marketing channels you use within your strategy. If a channel —whether it’s your blog , social micronesia email list 150000 contact leads mia, email, paid mia or any other— isn’t paying for your own investments, it means that it’s not worth continuing to use it or that it’s necessary to review the actions appli to it.

As you can see, ROAS is very similar to another well-known marketing metric, ROI . However, while ROAS is us to measure overall return on marketing investment, it applies to specific campaigns, such as ad groups. We’ll talk more about the difference between the two later in this article.

Thus, ROAS is a flexible way to evaluate aspects of Digital Marketing. In fact, let’s dive deeper into that point now. As we said earlier, ROAS is about the costs and profits of online advertising. So, here, the visibility and clicks that your ads generate must generate positive results for the company’s revenue.

That way, marketers can track their paid mia campaigns and make sure they are making a profit. That’s why, if you run ads on Google Adwords, Facebook Ads, or Instagram Ads , for example, it’s essential to understand how ROAS works .

To do this, it is necessary to track conversions

across all of these ad forms. When it comes to Google Adwords , ROAS is the average conversion value that ads bring. In Facebook Ads , it can be assign to individual ads made from the pixel.

Having those numbers is critical for marketing managers who ne to report to their superiors who make decisions in the department. That way, when setting up future campaigns, take into account ROAS numbers from previous months to improve the next ones.

ROAS can also be understood as a tool with which you can control, analyze and optimize the success rate of your advertising measures . Therefore, we can say that ROAS is more accurate than conversion rate as an indicator of profit maximization.

If an individual ad is underperforming, ROAS can be improv in several ways. By analyzing and comparing the success of different ad metrics, you can optimize budget usage and increase profits.

What is the difference between ROAS and ROI

Basically, ROI ( Return Over Investment ) is strategic, while ROAS is tactical. That’s the main difference between them.

ROI is us to measure the profit generat by ads versus their cost. That means it’s a metric meant to measure how ads contribute to the company’s bottom line . If you’re still struggling to calculate yours, we suggest checking out Rock Content’s ROI Calculator .

On the contrary, ROAS measures the gross income

from your investment. Therefore, it is a metric focus on the effectiveness of online campaigns.

That’s why ROAS is necessary for your digital strategy, as you ne to invest in marketing to increase your organization’s revenue and profits.

However, it can be useful to use both b2b saas seo: checklist for marketers metrics together, so it’s best to use a ROAS-focus template within your paid mia ad digital actions .

It is common for some business owners to be reluctant to invest heavily in this type of marketing that requires paying first and reaping the rewards later. However, it is at this point that you, as a marketer, must make it clear to your superiors that ROAS is not an expense but an investment.

It is common for capital owners to worry by lists because they are unaware of the profits that ads bring, hence the ne to calculate the ROAS, as we will show you below.