An Essential Guide to Return on Advertising Spend

Marketing campaigns these days are driven by data more than ever, with experts emphasizing efficiency and stability more than visibility. This drives competition tighter, with marketers striving to innovate with strategies that aim to get more leads while spending as little as possible.

But of all the metrics used in digital marketing, ROAS is perhaps the best indicator of whether a campaign is worth the budget or not. Just how important is this marketing metric and how can it be used to refine advertising campaigns?

In this article, we’ll decipher ROAS meaning beyond what it stands for as an acronym.

ROAS As a Metric

ROAS or Return on Advertising Spend, is simply a measure of how much revenue is earned for each dollar spent on ads. It’s a key performance indicator (KPI) ideally used with complementing metrics like cost per lead (CPL), cost per acquisition (CPA), and cost per click (CPC) to measure an advertising campaign’s success considering the budget.

Not to be confused with Return on Investment (ROI), which measures the success of the campaign’s overall strategy, ROAS only measures the efficiency of specific strategies, at the ad level. This helps marketers identify which tactics need to be reviewed and improved.

How Important is ROAS in Marketing?

Often an underestimated metric, ROAS often takes the backseat as it isn’t used as much as it should be. Since it’s primarily a measure of marketing efficiency, which spills into critical aspects of business such as...