Why ROAS Matters For eCommerce Brands | What Is ROAS?

You run the same ad on two different platforms (say, Facebook and Instagram) over a two week period. Despite the fact that the copy, images and budget are identical, a week later you notice the Instagram campaign resulted in twice as much revenue. You didn’t expect this but, because you are tracking ROAS, you are able to adjust your strategy by reallocating your advertising spend almost entirely to Instagram, maximizing return.

Scenario 2

You have come up with several different ads to spur excitement for a new product. You want to launch a major campaign across multiple platforms, but you don’t know which of your ads is going to be the most effective. So, before spending a lot of money, you want to know which ad should have the largest budget.

To do this, you simultaneously launch three one week campaigns on Google Ads, each of which uses a different variation of the ad copy you are considering for your big campaign. At the end of the week, you compare the ROAS of the three ads and find one with a 3x ROAS, one with a 2x ROAS, and one with a 5x ROAS.

With this information, you are able to confidently choose the ad which generated the 500% ROAS for your campaign sprint.

This content was originally published here.

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