Marketing evaluation
Return on ad spend evaluate the performance of ad campaigns
Business should calculate the return on money, they had spend on advertising. The approach helps them avoid shooting in the dark. The approach only focuses on revenue and not on products or logistics.
According to Hubspot: ROAS (return on ad spend) is a metric which measures the revenue that’s generated compared to every dollar of an advertising campaign. For example, let’s say you made $10 for every $1 spent on an advertising campaign. That means your ROAS for that campaign is 10:1.
Brands should not confuse ROAS with return on investment (ROI). While former focuses only on advertisement expenditure, ROI focuses on the overall business. To calculate ROAS one should consider the cost of the ad bid, the labor cost for the time it took to create the creative assets, vendor costs, and affiliate commissions.
When a business tries a new advertising campaign, they may compare the ROAS at the start of the campaign, at the mid-point, and at the end. This can help determine whether they should renew the campaign or try another method of outreach.
Check out: 8 budget templates for ad-spend Link