What is ROAS on Social Media?

The term ROAS means “Return on Ad Spend”, to put it simply - it is your Return On Investment (ROI) on Paid Ads! This is a digital marketing metric that calculates how much money your company makes from each dollar spent on advertising.

What’s the big deal about ROAS anyway?

When it comes to reviewing your ad spend and investment in Paid Ads, ROAS is a great way to measure how your ads are performing. It informs you how effective your marketing is, and gives you insights on how to continually optimise your ads and bidding strategy.

To include Social Media Ads in your marketing strategy is a smart AF move, especially if you are a product based business or ecommerce brand! It allows you to engage with your customers at different stages of their buying journey, whether it’s to get in front of their eyeballs or encouraging customer loyalty through repeating purchasing!

To give Social Media Ads a good go, you must give it time and allow the social media platforms (may it be Facebook/Instagram, Pinterest or TikTok) to run its course and collect data during the learning phases. It is also worth adopting a strategy for your paid ads, such as the Top of the Funnel brand awareness campaigns, all the way down to the Bottom of the Funnel retargeting campaigns to those who had the intent to purchase but did not follow through. For maximum effectiveness, combine your ads strategy withreally gorgeous and clever content! All of which contributes to the overall ROAS!

So how the heck do you calculate ROAS?

Return On Ad Spend = total revenue generated by ads, divided by the cost of ad spend

For a fully personalized Social Media Ads service, get in contact with us today and we can help smash your sales goals!