Return on ad spend (ROAS)

ROAS says how much value each euro of ads brought back. It is the main number for shops and the one Target ROAS bidding aims at.

It is revenue, not profit. A ROAS of 4 can still lose money on products with thin margins, and it is meaningless if conversion values are fixed or missing.

1. Add Conv. value / cost to the campaign table: that is ROAS.
2. Check that conversion actions send real values.
3. Compare ROAS with your break-even ROAS, 1 divided by your margin.
4. Separate brand and non-brand before judging.

With a 30% margin, the break-even ROAS is 3.33, so a ROAS of 4 leaves a modest profit after the ads.

• Treating ROAS as profit.
• Reading ROAS built on fixed or zero values.
• Blending brand into ROAS and calling it growth.

The audit checks Oppy runs on this, each with its own page.

• A ROAS target set without knowing the margin
• A target set a long way from what the account does
• Conversion value that is really a conversion count

• Break-even ROAS: The return on ad spend at which a sale pays for its own advertising and nothing more.
• Target ROAS: A bid target for the average return on ad spend.
• Conversion value: What a conversion is worth, sent with it or set as a default.
• KPI (key performance indicator): The number an account is judged on, such as cost per lead or ROAS.