One of the highlights of digital marketing is its great capacity to be measured. Absolutely everything we do online can be analyzed to verify if it is producing results. Given the high cost that digital ads currently have, it is important to know if our advertising decisions are paying off or if it is better to take another course.

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The ROAS is used in the marketing and advertising area to know how a campaign performed in relation to the objectives that have been established.

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So, what is it for?

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• To quantify the profitability of an advertising investment.
• To set objectives and analyze the results. It is important to set monthly, quarterly or half-yearly objectives and analyze whether we are achieving them in order to be able to change strategies in time.
• Find out in each campaign what works and what doesn't, in order to invest a percentage of money in those that achieve conversions.

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The formula for calculating ROAS:

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We need two pieces of information: the total revenue and the cost of ads.

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ROAS = (Sales revenue / Advertising investment) x 100

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History mode:

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The Puppies brand has decided to invest $1500 for a month in Google Ads to sell its new dog leashes.

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The income obtained during the month was $5000.

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They decided to calculate ROAS to verify whether the campaign was performing as expected.

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ROAS = $5000 / 1500 = 3.33ROAS: 3.33 x100 = 333%.

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This means that for every peso invested, more than $3 has been earned.

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Therefore, this campaign is earning more than the amount invested in advertising.

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