Return on Ad Spend (ROAS) is a marketing metric that measures revenue earned for each dollar you spend on advertising. It’s not just a metric; it’s the pulse of your advertising efforts. It’s like a scorecard for your ads, telling you how much money you’re making for every dollar you spend on them.
To embark on the journey of calculating ROAS, you need not be a mathematician; it’s very simple. You divide the revenue from your ad campaign by the cost of that campaign. For example, if you spend $100 on ads, and your revenue is $200 – (200/100) * 100 for percentage. This gives you a ratio of 2:1 or 200%. The more effective your campaign, the larger your ROAS and the more revenue you have earned for each advertising dollar spent.
When your ROAS is increasing, the better your ads are performing—it’s that simple. ROAS is your secret weapon for making sure your ad dollars are working hard for you.