This content is produced by a member of The Drum Network, a paid-for membership club for CEOs and their agencies who want to share their expertise and grow their business.
ROAS (Return On Ad Spend) shows how well an ad is performing and how much revenue it generates. It measures an ad’s effectiveness and demonstrates how well an ad can help with reaching target PPC strategy objectives. Tom Welbourne, founder and director of The Good Marketer, considers its potential for identifying ads for improvement, and how to stay on top of performance.
A general rule of thumb is the higher your ROAS, the better your ads are performing.
You can calculate ROAS yourself or view the figure in your Google Ads Account. Whichever way you choose, it is a great indicator to measure your success at different campaign levels.
To understand your ROAS and what it means for your business, you need to get to grips with your PPC strategy.
PPC stands for Pay-Per-Click, and as the name suggests, your company pays every time someone clicks on your ad. This advertising method can drive website visits, increase sales and much more.
A PPC strategy is essential if you want your business to rank higher on SERPs (search engine result pages). It is also a great way to get yourself in front of your competitors.
The higher the bid or budget you put behind your ads means that when someone searches for a keyword related to your business products or services, your company is more likely to appear first.
A well-optimized PPC strategy means that the price you are paying for a click is less than the profit you make for converting a click into a purchase.
For example, you may pay £2 per click, but this click’s value returns in the sale are £60.
However, this is all dependent on the nature of your business, the products and services you provide and many other factors.
A well-built PPC strategy and a well-designed PPC campaign are essential to reaching your target ROAS.
As a PPC agency, we perform detailed keyword research and ensure that your landing pages are optimized for conversions.
Making sure you select the right keywords and place them into the right ad groups will help create a strong campaign.
There are numerous ways to indicate your PPC strategy’s success, but ROAS is pretty much the go-to for monitoring your PPC campaign’s performance.
It is easy to track; you can also set your target ROAS. Ultimately, you are making your life easier as you can monitor your progress and set clear business goals.
If, however, your ROAS is not where you want it to be, and you are looking for some quicks wins to increase your overall ROAS, here’s some top tips:
Lower your CPC: Lowering the cost per click will automatically reduce your ad spend, increasing your ROAS. Also, reducing the price paid per click means your business is getting more traction at a lower cost
Audience targeting: Targeting the right audience is crucial – especially if you do not have a big budget to spend – knowing your business audience will help you not waste your budget on the people who are not likely to buy your products or services
Google Ads allows you to set a target audience for your campaigns and ad groups, ensuring you only target the people relevant to your business.
Selecting the right keywords: Using keywords that best represent your business products or services will result in higher-quality leads
Optimizing with negative keywords: Another great way to improve your ROAS is to use negative keywords to your benefit. Negative keywords help avoid irrelevant searches that might be similar to your business, but do not lead to customers purchasing your products or services. You can eliminate any unnecessary spending by optimizing negative keywords and honing in on your specific audience
Optimizing your landing pages: Finally, it is essential to optimize the landing pages used in your ads. The customers who click on your ad are more likely to purchase if your website or online store is easy to navigate and they can find any additional information that they need
This article is about:
Flexible. Transparent. Affordable.
Choose from a series of great email briefings, whether that’s daily news, weekly recaps or deep dives into media or creative.
Join hundreds of thousands of marketers in signing up for The Drum’s email briefings. Let our editors talk you through stories we know you’ll love.
© Carnyx Group Ltd 2022 | The Drum is a Registered Trademark and property of Carnyx Group Limited. All rights reserved.