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Playbook: Return on Ad Spend

return on ad spend

What is a Return on Ad Spend (ROAS) Report?

A Return on Ad Spend (ROAS) report helps marketers understand which paid advertisements drive the most revenue for their investments. In other words, it enables marketers to make data-driven decisions about what paid advertising platforms are the most efficient in driving revenue for the business and, in turn, where to focus their investments.

ROAS data

Why Use Return on Ad Spend Report

Marketers utilize ROAS data to choose which advertising channels to spend their marketing money on to provide the highest quality accounts to their sales team, resulting in higher-quality deals with more income.

Who This is Valuable For

Demand Generation & Digital Marketing Teams

Optimize your ad campaigns by gaining valuable insights into which advertising campaigns generate the highest returns.

Marketing Ops

Increase your budget allocation performance by utilizing valuable data to help optimize budgets for maximum return on ad spend.

Marketing Analysts

Improve the accuracy of ROI calculations by gaining detailed insights into advertising campaign performance and overall ROAS.

VPs of Marketing & CMOs

Ensure marketing activities (specifically ad campaigns) are driving tangible business results.

What Is Needed For Return on Ad Spend Reporting

Data You Need

Data Sources Required

Key Characteristics for Tracking a ROAS Report

Here are some key characteristics to track and be aware of when tracking your ROAS report:

1. Tie Ad Performance to Pipeline & Revenue

It is no longer sufficient to report on ad performance solely through top-of-funnel metrics such as impressions, clicks, or conversions. As marketers, we must be able to demonstrate how our ad spend affects the business – pipeline and revenue. Oftentimes, ads are one of the larger discretionary line items in a digital marketing budget. Ensure that you are making the best use of what is truly converting into revenue, not clicks.

If you are struggling to understand how to improve your ROAS report, check out our blog, “How to Fix 7 Pitfalls When Calculating Return on Ad Spend”.

2. Ensure Ad Performance Gets Credit Throughout the Entire Buyer Journey

In a traditional marketing funnel, ads often get “credit” at the top of the funnel. When an ad generated a new lead, first-touch attribution models provided appropriate credit. With the introduction of retargeting (usually between the lead and MQL stages), marketers began to follow ads throughout the first half of the buyer’s journey.

At CaliberMind we encourage marketers to measure ad spending across the entire buyer journey. Take it beyond the MQL stage. Take it beyond the individual lead and see how your ads are impacting the entire account. Think about it — your ads could be impacting other personas and contacts at the organization – unless you have a mechanism in place to understand this metric, you’ll be flying blind and won’t have the optimal mix in place.

3. Move Beyond CPC / CPL to CPO and CPR

Related to the first point above, calculate how effectively you create opportunities and ultimately — revenue. The calculation is pretty straightforward — for example with opps — your ad spend is divided by the number of opportunities. But we encourage you to get more granular and play around with different data points. Try running it at the campaign level. Try running it at different opportunity stages. Then tie it back to your budget with what you’re willing to spend to acquire a customer (CAC). If your cost per is low (farther in the funnel) and you have a channel/campaign working — you’ll know where to spend to get the results you’re looking for.

 

Here’s an example of a simple ROAS report we use at CaliberMind:

ROAS Graph
Ready to dig deeper and learn how CaliberMind’s CDP makes ROAS reporting easier than ever before? Check it out.