Everything You Need To Know About Return on Ad Spend (ROAS)

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    Everything You Need To Know About Return on Ad Spend (ROAS)

    Different digital marketing companies use online campaigns to strengthen their marketing and generate more leads. Organic and paid marketing techniques are used by the best digital marketing company in Ludhiana to generate more leads. Although organic traffic is said to be better for the website, paid marketing increases the chance of sales by 50%. Therefore, it is essential for digital marketers to evaluate their return on ad spending (ROAS). It helps the company understand whether its campaign is performing up to the expectation or not. 

    What Is Return On Ad Spend (ROAS)?

    Return on Ad Spend is a key metric that is used to assess the success of a digital marketing campaign. Formulating effective strategies can boost your SEO game and make your campaign successful. It is calculated by measuring the value generated against the value spent on the advertising campaign. The best digital marketing agency in Punjab uses the ROAS metric to measure how well the digital marketing and advertising campaign performed.

    How To Calculate ROAS?

    Calculating Return on Ad Spend is easy. It includes three things: Revenue Generated, Amount Spent on Advertising Campaign and ROAS formula. Revenue generated is the amount you have earned through your campaign, and the amount spent on the campaign is the money you spent on the advertising campaign. 

    ROAS Formula: (Revenue Generated/ Amount Spent on Advertising Campaign)

    Example: If you earn Rs. 6000 through your campaign in which you invested Rs. 1000, you have earned a return on ad spend of a ratio (6000/1000) 6:1. This means you earned 6 rupees for every 1 rupee you spent. 

    What Is The Ideal ROAS Ratio?

    The ROAS ratio for every company can be different depending on their needs. However, the ideal ratio for ROAS is 4:1, but some companies aim for higher ratios, such as 10:1 or more. Therefore, it depends on the company and its requirements. Accordingly, they will get a return on ad spend and meet their distinct objectives. Consult the best digital marketing agency in Punjab to formulate a good digital marketing and advertising campaign to help you achieve your desired return on the ad spend.  

    Importance Of ROAS

    ROAS helps in understanding the performance and shortcomings of the advertising campaign, and accordingly, further strategies can be built. The ROAS ratio can also help in crafting the right content marketing strategy to increase revenue and benefit the most from the ROAS. It is important for various reasons, such as:

    • Increase Profit: The right strategy helps boost profit, and a higher ROAS means you have earned well against the amount invested.
    • Helps in Decision Making: The ROAS helps provide factual and evidence-based data. Thus, it helps in making data-driven decisions. Consult the best digital marketing in India to understand how to frame and use advertising campaigns to generate a higher ROAS.
    • Cost-effective: Using ROAS is cost-effective as it helps in understanding the performance and shortcomings of the campaign. This helps in making the next strategy accordingly, which will reduce the chances of loss. 
    • Targeted Marketing: It helps in targeted marketing. You can analyse which channel or platform provides higher ROAS, which will help you understand the platforms that help in gaining maximum profits. Accordingly, you plan your content strategy and promote on a large scale to maximise your returns. 
    • Helps Retain Clients: If you use the ROAS correctly and manage to turn potential clients into loyal clients, it will help increase your client retention.


    Developing campaigns is crucial to increase profits and generate sales for the business. Hence, analysing and calculating their return is equally important. Therefore, the best digital marketing agency in Punjab suggests that you calculate the Return on Ad Spend (ROAS), which is the amount generated against the amount spent on an advertising campaign. It will help you increase profits and retain clients, is cost-effective, and helps in target marketing and decision making.