The ROAS refers to the Return on Ad Spend and brands measure the amount earned against the amount spend on the advertisement.
ROAS = (revenue attributable the ads / cost of ads) x 100
So the ROAS is the amount of Revenue earned against each $ spent on the advertisement campaign. The ROAS Calculator can be used to find what you are earning against the money you are spending as a company on the advertisement. The ROAS calculator online is a simple way to find the effectiveness of your efforts and what kind of ROAS finance you need as a brand. Calculating return on ad spend can be simple and fast if using the ROAS calculator by calculator-online.net.
ROAS a Key KPI
Return on ad spend (ROAS) is a basic and Key performance indicator (KPI) for a brand, and it is a parameter to find what your advertising campaign is bringing in terms of $ the dollar amount for the brand. You may mix the ROAS with the ROI, but Return on Investment is the Return On Investment on your total investment on the other hand the ROAS is dealing with your advertisement campaign and its return in terms of the dollar amount.
Practical example
Consider a brand that has invested $1000 in ads, and the brand gathers $4000 in revenue from those ads.
Solution:
Revenue attributable to ads= $4000
Cost invested on ads= $1000
ROAS calculation= ($4000 / $1000) x 100
ROAS calculation=400%
The Return on Investment=3000 ($)
The ROAS Calculator calculates the return on Ad spending.
How to maximize the ROAS?
There are various factors affecting the profit margin on the ads spent and we can control these factors to maximize our profitability. We are going to discuss these factors one by one to find out how to maximize the brand’s popularity.
Brand popularity and acceptability
Brand popularity is one of the key indicators for the ROAS and the ROAS Calculator may produce maximum profitability when the brand has a better approval rate in the target market. There is always a competition going on in the mind of the consumers if they find your product and services are better than competitors then you are going to purpose the product and service of the particular brand. If a brand is able to gain popularity in a particular marketplace. Then it is possible to grab maximum profitability.
Customer satisfaction level
The ROAS Calculator may indicate a better return on Ad spend if a brand has a better customer satisfaction level. Then it is going to grab a better return on the ROAS. The brand has better acceptability in the mid and heart of the target market and also have a better consumer level. Consumers usually prefer the product and services of specific brands where they are getting a better satisfaction level.
We may need to find what is customers’ satisfaction levels:
Customers satisfaction = [Customers – perceived values / Total cost paid]
Brand popularity is measured on the parameter of customer satisfaction level. The customers may be happy, satisfied, or unsatisfied on the basis of the product or the service level. If a customer is happy with a product then better ROAS is shown by the ROAS Calculator.
Also read: Your Ultimate Guide to Perfecting the Art of Ad Operations
Conclusion
The advertisers consider a profit ratio of 4:1 for their brands, and they consider a better profitability ratio for their brands. If your brand is scoring that much profitability then your brand is performing well and you are generating a better profit margin against your advertising campaign. There are various factors like the brand popularity and the customer’s satisfaction level, which should be controlled to get better return on ad spend. The ROAS Calculator included these factors to find the return on Ads.
