Tactical & Practical
REAL ROAS (Not sponsored by an attribution SaaS)
Aug 28, 2024
Discover the 'Real ROAS' formula, a game-changing metric for understanding advertising efficiency in e-commerce. The discussion emphasizes focusing on direct connections between ad spend and revenue. It challenges conventional attribution tools, inviting listeners to rethink their strategies for growth. Learn how simplicity can lead to clarity in assessing marketing effectiveness!
11:17
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Quick takeaways
- The Real ROAS metric simplifies revenue comparisons against ad spend, providing clarity on advertising effectiveness for better budget decisions.
- Focusing on Real ROAS fosters team alignment around metrics that directly impact profitability, enhancing understanding of advertising's sales effects.
Deep dives
The Power of Real ROAS
Real ROAS is a simplified formula that enables businesses to compare revenue generated from specific products or collections against the ad spend promoting them. This method provides a clearer picture of advertising effectiveness, as it reveals discrepancies between reported platform metrics and actual sales results. For instance, a week where $50,000 was spent on advertising for a collection yielded a Facebook ROAS of 1.5, but actual sales reached $150,000, resulting in a real ROAS of three. By relying on this straightforward approach, businesses can make more informed budget decisions and focus on essential metrics that genuinely reflect their growth.
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