Return on ad spend (ROAS) is a key metric for many businesses, but it’s becoming less and less relevant in an evolving digital world. Here are a few reasons why:
● Customers are more informed. In the past, customers were more likely to make impulse purchases based on ads they saw. Today, customers are more likely to do their research before making a purchase, which means they’re less likely to be influenced by ads.
● The digital landscape is fragmented. There are now more channels than ever for businesses to reach their customers, which makes it difficult to track and measure ROAS across all channels.
● The value of a conversion is changing. In the past, a conversion was typically defined as a purchase. Today, businesses may consider a lead, a sign-up, or even a social media engagement to be a conversion. This makes it difficult to compare ROAS across different campaigns.
If you’re still using ROAS as your primary metric, it’s time to consider moving away from it. Here are a few alternative metrics you can use:
● Customer lifetime value (CLTV). CLTV is the total amount of money a customer is expected to spend with your business over their lifetime. This is a more valuable metric than ROAS because it takes into account the long-term value of a customer.
● Return on marketing investment (ROMI). ROMI is the amount of money you make from your marketing campaigns, minus the cost of those campaigns. This is a more accurate metric than ROAS because it takes into account all of your marketing costs, not just your ad spend.
● Net promoter score (NPS). NPS is a measure of customer loyalty. It’s calculated by asking customers how likely they are to recommend your business to a friend or colleague. A high NPS score indicates that your customers are happy with your products or services, which is a good indicator of future success.
Moving away from ROAS can be a challenge, but it’s important to do so if you want to measure the true impact of your marketing campaigns. By using more accurate metrics, you can make better decisions about how to allocate your marketing budget and improve your overall results.
Here are some additional tips for moving away from ROAS:
● Focus on long-term results. ROAS is a short-term metric, while CLTV and ROMI are long-term metrics. If you want to see the real impact of your marketing campaigns, you need to focus on long-term results.
● Track your results across all channels. In today’s digital landscape, customers are exposed to your brand through a variety of channels. It’s important to track your results across all channels so you can see where your marketing budget is being most effective.
● Use multiple metrics. No single metric can tell you everything you need to know about the effectiveness of your marketing campaigns. Use a variety of metrics to get a more complete picture.
By following these tips, you can move away from ROAS and start measuring the true impact of your marketing campaigns.
*This article was produced with the assistance of artificial intelligence. Please always check and confirm with your own sources, and always consult with your healthcare professional when seeking medical treatment.