Why ROAS (Return on Ad Spend) Matters More Than Clicks?
The main goal for all businesses while running digital ad campaigns is to focus on getting more clicks. As more clicks mean more people land on your website and that’s what we wanted right? But one must be aware of the fact that more visits doesn’t necessarily mean more conversions. The real success of any ad campaign is measured by its ROAS (Return on Ad Spend) this indicator shows the real revenue you’re generating for every rupee spent
Let’s Understand ROAS
ROAS stands for Return on Ad Spend and it informs you the money you’re spending on your ads and what’s the result that ou get. It is a simple indicator that can be calculated by dividing your revenue generated from the ad with cost of ad.
If you’ve spent Rs. 10,000 on ads to generate sales of Rs. 50,000 then your ROAS is 5 times indicating you earned Rs. 5 for every 1 Rupee spent.
Now, let’s answer the real question why ROAS matters more than clicks? Because clicks don’t tell you the real story. You can even say that clicks are misleading because:
- Clicks don’t equals to conversions, if someone clicked on your ad it doesn’t mean thet made a purchse.
- High Cost Per Click (CPC) doesn’t always result in better performance as you end up paying for expensive clicks that are not brining you sales.
- If you’re only focusing on clicks and not tracking the actual sales then you might be wasting your money without driving revenue.
- Our Recent Ad Campaing Examples
At our digital marketing agency in Bhopal, we focus on ROAS instead of clicks which is same for our all ad campaigns. Here are a couple of examples from our recent ad campaigns to show you why ROAS matters:
- Fashion Brand: ₹20 Lakhs Sales in One Month
Rs. 20 lakhs sales in one month: In the month of February, we closed Rs. 20 lakhs mark in sales for our client, its a fashion brand. Here we focused on conversions than on clicks. The ROAS was 12.97x which is really high considering the average 2-3x as per industry standard. Instead of just looking at CPL (cost per lead) we ensured that every rupee spent brought in actual revenue.
- Luxury Real Estate Campaign: 11x ROI Returns
Another campaign set aside by us for a real estate brand not only generated leads but also gave sales conversions where we successfully achieved an ROI of 11x. This means for every 1 rupee spent on ads, the business converted 11 rupees back through strategic audience targeting and advertising at specific locations. The entire strategy maximized revenue rather than increased query numbers.
Ways to Boost Your ROAS
Maximize ROAS rather than increase click volume by putting these elements into place:
- Target the Right Audience: Instead of targeting people who may just click your ad, you need to target people more likely to convert.
- High-Intent Keywords: In case you run search ads, apply purchase intent keywords rather than just seeking general interest.
- Optimizing your Landing Page: Unlike your website, your landing page must be designed to move toward conversion.
- Retarget Interested Customers: Retargeting ads are driving back people who found the product interesting but are not buying.
- Tracking Performance Beyond Clicks: Always track your sales, revenues, and overall return rather than clicks-only cases or just engagement.
Conclusion
Clicks may give an insight into engagement. Still, ROAS is the one telling you the real story which is how much is your business making. You can be sure that any marketing budgets are actually bringing in profits by switching attention away from getting clicks to achieving improved ROAS. While running ad campaigns, you must ask this very simple question: is the campaign making money, or is it just driving traffic? Answer this or get the answer from your agency and you’ll see results that you’ve been waiting for.
Do you need assistance in improving your ROAS? Our performance marketing agency in India is here to help your business make every ad rupee count!
