RoAS (Return on Ad Spend) measures profitability by calculating revenue earned per dollar of ad spend. ACoS (Advertising Cost of Sale) measures efficiency by calculating advertising costs per unit sold.
Calculate and analyze RoAS at least monthly. More frequent calculations, such as weekly or daily, allow faster optimization. Use advertising dashboards to track real-time performance.
A RoAS of 4:1 or higher is a good benchmark. This means generating $4 in revenue for each $1 in ad spend. However, an acceptable RoAS varies based on factors like profit margins and competitiveness.
Ways to improve RoAS include refining keyword targeting, creating high-converting ad copy, aggressive bidding on top keywords, and analyzing search term reports to find additional profitable keywords.
If a campaign's RoAS is below your target for more than 2-3 weeks, consider pausing it and optimizing before resuming. Continually monitor performance and pause consistently unprofitable campaigns.
While RoAS measures profitability, also analyze campaign efficiency metrics like click-through-rate, conversion rate, and cost-per-click. And track overall success metrics like customer acquisition cost and lifetime value.
Analyze historical RoAS data to spot trends and patterns. Factor in changes like new product launches, seasonality, and competition. Build forecast models to estimate future RoAS by campaign, keyword, or product.
