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!
AI Snips
Chapters
Transcript
Episode notes
Calculate Real ROAS
- Track "Real ROAS" by dividing revenue from a specific product or collection by the ad spend used to promote it.
- This metric helps assess the true effectiveness of your advertising efforts, even with high AOVs or long customer journeys.
Real ROAS vs. Platform Metrics
- Nate shares examples of how real ROAS revealed discrepancies between platform metrics and actual sales results.
- Despite higher reported ROAS on Facebook, actual sales and profit were sometimes lower, highlighting the importance of real ROAS.
Refine Real ROAS Calculation
- Exclude returning customer orders during special events or product launches when calculating real ROAS for ad spend effectiveness.
- Consider the impact of events like Black Friday when a significant portion of sales may come from existing customer lists.