Title tag: The Role of ROAS Tracking in Omnichannel Marketing Analysis

Meta description: Learn about ROAS, including the upsides, limitations, and its role in multi-channel digital campaigns and omnichannel marketing attribution.

Spring is a great backdrop for marketing campaigns. Using emails, social media, mobile apps, and paid search options to deliver clever, seasonal messages for your service can be a great way to generate interest and convert leads.

When using so many communication channels, measuring the effectiveness of each is essential. And one useful tool is your Return on Ad Spend, or ROAS, for short. When used alongside other digital marketing metrics, ROAS can help you determine the best bang for your paid search bucks.

ROAS: What It Is and Why It Matters

ROAS tracking tells you how much revenue your campaign generates from paid search efforts, relative to how much you invest. You can use this formula to calculate it:

ROAS = ad revenue ÷ ad spend

For example, if your $10,000 paid advertising spend generated an income of $50,000, here’s what your ROAS would look like:

50,000 ÷ 10,000 = $5

This 5:1 ratio means that every dollar you spent on paid advertising efforts created $5 in revenue.

“Positive” ROAS depends on your campaign goals and industry. E-commerce and retail businesses generally have a higher ROAS than higher-margin industries or start-up businesses.

Here are more benefits to a ROAS analysis:

• It offers a straightforward way to assess the effectiveness of your paid search strategies by measuring how much revenue your dollars generate.
• It can help you compare the performance of your various campaigns.
• It can assist you with budget allocations, enabling you to allocate more funds to the platforms that contribute to your bottom line.
• It provides you with data-backed justifications to shut down ineffective platforms or campaigns.

Problems With ROAS Tracking in Omnichannel Campaigns

ROAS helps you tie together advertising spend with revenue generation. However, it’s an inefficient metric when used on its own. Here’s why:

• Attribution bias. ROAS focuses on final clicks, rather than touchpoint interactions. Most prospects don’t go directly from ad viewing to button clicking.
• Offline evasions. Online campaigns can generate offline activities. ROAS numbers don’t calculate “in-person” behaviors like phone calls or walk-in appointments.
• Lagged timing. ROAS collects information within a specific window, such as campaign length. But the actual conversion could take place weeks after the campaign ends.

Marketing Performance Metrics for Spring Omnichannel Campaigns

ROAS measures bottom-funnel activities. However, a successful campaign moves prospects through the sales funnel through a variety of methods.

Because of this, a Return on Ad Spend analysis should be partnered with other metrics, such as the following:

• Lead generation. Lead generation is the first step of any campaign. The process identifies and nurtures prospects, aiming to convert them into customers. Lead generation measurements include form fills and email responses.
• Lead to conversion rates. This metric shows the percentage of leads generated that become paying customers. The number gives you an idea of the effectiveness of your digital marketing strategies.
• Conversion rate by channel. Use this analysis to see how many visitors to a particular channel (email, paid social media, or organic search) take action to sign up for more information or buy your service.
• Cross-channel influence. This metric shows how effectively your combined channels guide prospects to take actions such as booking an appointment or purchasing your service. Some examples include using social media to encourage users to open a promotional email or pairing an influencer’s product marketing with email teasers.
• Customer acquisition cost (CAC). Rather than ROAS, which focuses on click-to-buy or click-to-book analyses, CAC measures the total cost to acquire new customers. Those costs include salaries, overhead, and bonuses.
• Time to conversion. This assessment tells you how long it takes your potential customer to move from initial interest to final action, such as booking an appointment or making a purchase. This information can reveal snags in the funnel and ways to improve marketing effectiveness.
• Customer lifetime value (CTV). The CTV provides information on the anticipated revenue or profit your customer generates throughout their relationship with you. With this data, you can direct your marketing efforts toward supporting high-value customers and encouraging them to buy from you again.

ROAS Is Part of an Omnichannel Marketing Strategy

ROAS tells you if your advertising spend generates the revenue you want. However, this measurement tells you only part of the story about the effectiveness of your omnichannel efforts.

Pairing ROAS with other metrics gives you a full omnichannel marketing attribution picture. This tells you how all touchpoints across digital channels impact your customer’s journey from initial interest to ultimate action.

For more assistance, contact the experts at UpSwell Marketing. We can help you set up proven digital marketing campaigns that convert your leads into paying customers.