Return on Ad Spending or ROAS is a marketing metric that measures the effectiveness of a paid digital ads campaign. ROAS helps online businesses identify which strategies are working and how they can enhance future advertising campaign strategies. ROAS is calculated by dividing your total campaign revenue over the total campaign cost. It helps you recognize how much revenue your ads generate from what you’re spending on your campaign. Studying your ROAS can help you determine which ad campaign you should focus on investing in and which one needs improvement.
If you are more familiar with ROI or Return of Investment, ROAS works the same way with this metric and they both help you evaluate the effectiveness of your campaigns and strategies. Their only difference is, ROAS focuses on specific digital advertising campaigns, group or keywords.
But, is it relevant to understand the importance of ROAS? Yes, definitely. It is the best metric to help your business and better understand how your digital ad campaign is performing. You are running five different ad campaigns for your business at the same time, as an example. You want to invest more in your ad spend but are not sure which ad campaign is giving the best results on a per-dollar basis. ROAS will help you decide how to optimize your budget by increasing your ad spend on the campaign that performs effectively. You can easily identify which ad campaign and keywords are giving you the highest revenue.
Here are some helpful ways to improve your Return on Ad Spend.
Make sure your website is mobile-friendly
The increase in mobile phone users is rapidly growing, so it’s important to develop a website that can work perfectly on mobile devices. Online search has also been actively growing on mobile phones. With a mobile-friendly website, the conversion rate is higher.
Study your competitors
Common to any marketing strategy is studying your competitors. By knowing their success and mistakes, you can find ways to improve your own ad campaigns. By seeing the content of their ad campaigns, you can think of better ways to produce a better one.
Filter your Keyword Targeting
Be specific on what keywords you use to attract potential customers who are ready to purchase. Optimize your ad campaigns with a good set of keywords to help lure high traffic to your site with a high rate of conversion.
Use Geo-Targeting
Target your ad campaigns by country, region, city, ZIP code or by radius around your business location. Avoid paying for ads from audiences who are not able to buy, those who are not reachable by your products or services. Focus your ads to those who include places or locations in their searches.
Optimize your landing pages
Getting clicks from your paid ads is just the first step. To convert traffic into revenue, you need to optimize your landing pages from the time prospects first visit your website until they purchase. Do not use the same landing page for all your ads. Create a landing page that is relevant or related to your campaign.
There are a lot more ways to improve your ROAS and you can either research or buy services that can provide good results. Just remember, a good ROAS is when your ad campaigns convert to high revenue that is more than enough to cover the cost. So start planning your budget and campaign strategies that can give you better results.
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