What is ROAS?

ROAS is the ratio of earnings to advertising cost spent. For example, if you pay 1 TL advertising fee and earn 10 TL as a result of this advertisement, ROAS is said to be 10.

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What is ROAS?

What is ROAS?

ROAS: It is a KPI consisting of the initials of the words Return on Ad Spend and used to measure ad performance.

It is an indispensable type of variable in the digital KPI table. This KPI is basically an indicator of how performance you spend on advertising. When many companies in the industry say ROAS 5, it is important to understand: We spent X TL on advertising, which brought us 5X TL sales.

The sales amount obtained as a result of ROAS shows your turnover. If you want to do a review on your margin, it should be reviewed as the ad's margin performance, not ROAS.


How to Measure ROAS?

When examining ROAS, the commonly used method is to examine the incoming sales, taking into account all advertising expenses. This is sometimes not true. Let's examine this with an example.

Let's say you advertise through Google Ads. Your brand awareness is at industry average levels. In this case, you may want to evaluate the performance of the advertising campaigns you have created separately, or you may want to evaluate them collectively. However, when you want to evaluate them collectively, we recommend that you examine the advertisements coming from the brand separately. The reason for this is that when you examine the brand advertisements in detail, you will observe that you have a very serious turnover despite a small amount. This also brings the following question; If you didn't advertise and your brand name was already at the top of the search results, would you already get those clicks and make these sales anyway? Although this may seem like a bit of an egg comes from a chicken or a chicken, it can be answered as yes if there are no other people who advertise for your brand and compete with you in this field. In this case, this turnover you get with a small advertising payment is not the result of a real advertising performance, but a natural result of your brand awareness. Neglecting this while reviewing ROAS will allow you to perform more accurate ad analysis.


Opportunity

If you find it easier to do a collective follow-up and you like to review it in this way, then our recommendation is to examine the brand ads within themselves and examine the date ranges in the form of brand ad performance and other ads.

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