What is ROAS and how to set it up on Google Ads?
GOOGLE ADS
November 18, 2022
ROAS
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What will I talk to you about in this article?
ROAS Calculation
How to set up Roas on Google Ads
Where to set ROAS?
When is ROAS good?
How to get 465% ROAS with Google Ads: Legge3 case study
ROAS stands for “return on advertising investment” . ROAS in Google campaigns can be set . That is, we can “tell” Google to reach a ROAS of 7, to use the previous example.
In this article we will see how to calculate it, how to set it up and how to estimate a consistent ROAS even without having a history of sales.
Google Ads for eCommerce: How to Monitor and Measure ROAS
ROAS Calculation
The formula for calculating ROAS is very simple and consists of dividing how much we have earned from Google Ads campaigns by how much we have spent on advertising.
ROAS = Revenue / Advertising Spend
If we spend €1.00 this metric indicates how much we have obtained from this investment. If the ROAS is 7 it means that we spend €1.00 on advertising and €7.00 come back in sales .
How to set up Roas on Google Ads
However, someone might wonder why, if we can choose the ROAS to set in Google Ads campaigns for e-commerce, we don’t set it as high as possible.
The answer is simple: We need to BC Data Indonesia set a ROAS in line with the sales history of our products . The temptation would naturally arise to set much more “courageous” targets. In this way, however, we force the system to find users close to conversion, to purchase in the case of e-commerce, without fully exploiting its potential.
The less aggressive we are, the less likely
We are to bring home quality Cracking the UK Mobile Code: Beyond the 07 Prefix traffic. The higher we move the goal, the less traffic we will have and therefore fewer conversions . Paradoxically, we can achieve interesting ROAS, but we risk selling much less.
For example, if we previously sold 100 with a ROAS of 5 and then we move the ROAS to 20 but sell 5, you understand that the game is no longer worth the candle. That is, a correct balance must be found between sales volumes and realistic ROAS .
