ROAS – What is ROAS?
RROAS or return on advertising investment is the calculation of the gross profit obtained through a marketing campaign.
Using a simple equation, the return on an investment made in an advertising campaign can be calculated and its success measured.
What is ROAS for?
ROAS is a metric that determines whether an advertising investment has been profitable, showing the profit generated by it. It is, therefore, a basic KPI to know if the investment in marketing is being appropriate and meeting the objectives or if, on the contrary, a change in strategy should be considered.
How to measure ROAS?
The formula that allows us to know the return on advertising investment is the following:
(Income generated – Advertising investment) x 100
In this way, we will obtain the return that each euro invested in the advertising campaign has given us.
Why is ROAS important?
The ROAS is a metric that allows us to reliably know if the investment made in a specific marketing campaign or action is generating the expected benefits, if it is being profitable or if it is not. It allows you to carry out a quantitative evaluation of the campaigns and make decisions in one direction or another according to the results obtained. It is a determining metric when planning new strategies and budgets for future actions.
Difference between ROAS and ROI
The main difference with ROI is that it takes expenses into account, while ROAS provides a figure of the gross benefits obtained by each marketing campaign or action.