5 July, 2022

How to Increase Your Return on Digital Advertising Spending (ROAS)

Beshoy Magdy

How to Increase Your Return on Digital Advertising Spending

You don’t have any time or money to waste as a business owner. So, why would the amount of money you spend on paid digital advertising be a different story?

With more than 14 Billion EGP projected to be spent in 2022 on media buying in Egypt, it’s important to know that you’re spending your money wisely.
But, unfortunately, many business owners find themselves in a position where they’re not finding the returns they need from their digital advertising spend.

If this sounds like you, it’s time to take a step back to assess your strategy.
Thankfully, you can take some simple steps to ensure you get a good return on your digital advertising spend. Here’s everything you need to know.

ROAS - Return On Digital Advertising Spend

What is Return On Ad Spend (ROAS)?

Before jumping into the “how,” it’s essential to understand what “return on ad spend” actually is. In short, return on ad spend, or ROAS, is the ratio of money earned from a campaign to the amount spent on that campaign.

This metric is vital for business owners because it can help determine the social media channels, strategies, and content that generate the most leads
and sales.
With this data, it’s easy for your business to fix any areas of improvement and work on finding more success from your digital advertising budget as well as less wasted time and effort.

How To Calculate ROAS

Knowing what ROAS in digital marketing is one thing but understanding how to calculate it is another.

Here’s the basic ROAS formula in digital marketing you’ll need to use:
Revenue from ad campaign / cost of ad campaign = ROAS

For example, if your digital advertising campaign generated 100,000 EGP in revenue and costs you 50,000 EGP to run that campaign, your ROAS would be 2.
This means that for every 1 EGP you spent on advertising, you made 2 EGP in revenue.

What Is The Optimal ROAS?

It can be a little tricky with all of the information floating around about the optimal ROAS to know what’s correct. Some online sources will tell you 5, while others claim it’s 6. The truth is, both are wrong!
There’s no actual optimal ROAS because every business is different.

The amount of money you need to spend on advertising will depend on various factors, such as your business goals, target market, and much more.

However, if you want to find a higher ROAS, you’ll first want to have a deeper understanding of the sales funnel. The sales funnel is the most effective and fastest way to achieve a higher ROAS for your business.

ROAS - Return On Digital Advertising Spend, ROAS

The 4 Keys To Increasing Your ROAS

Let’s jump into actual steps you can take to increase your ROAS. Here are four keys to success:

Choose The Right Product And People
Before increasing your return, you must understand your product and your target market. Do some research to ensure you’re selling a product or
service that people want to buy.

Are you solving a problem or challenge your target audience is currently facing?
How will this product help them in their everyday lives? Do you know what they fear or what they desire?
By creating a buyer persona, or an ideal customer profile, you’ll better understand the people you’re trying to sell to instead of blindly guessing.

Write Killer Ad Copy

With your product and target market in mind, it’s time to start working on your ad copy.

This is the text that will appear on your advertisement and should be carefully crafted to persuade people to click.
Your ad copy must be attention-grabbing, relevant, and offer a clear call to action.

It should also be short, sweet, and to the point.
Make sure the copy appeals to their emotions and speaks to their needs, so they’re more likely to take action.

Test And Measure

One of the most critical steps in increasing your ROAS is testing and measuring. This includes A/B testing your ad copy, images, CTA, and more.

You’ll also want to track click-through rate (CTR), conversion rate, cost per acquisition (CPA), and other vital metrics.

By understanding what’s working and what isn’t, you can make the necessary changes to improve your ROAS and only run the type of ads that actually attract your target audience.

ROAS

Create A Powerful Sales Funnel

The sales funnel is the lifeline of your business. It’s what turns leads into customers and customers into lifelong fans.

To increase your ROAS, you need to have a sales funnel in place. This will help you nurture your leads and guide them through the buyer’s journey, so they’re more likely to make a purchase.
A well-designed sales funnel looks like an upside-down pyramid, with the widest part at the top (representing your audience) and the smallest part at the bottom (converting customers).

When your business can operate a proven-generated funnel to your marketing framework, you’ll consistently grow your online business drastically. This is the ultimate game-changer strategy when it comes to increasing your return on digital advertising spending.

In order to understand the sales funnel in detail, you can read our blog post The Ultimate Secret How to Grow Your Business Online Exponentially.

Conclusion:

There you have it! These are four key steps you can take to increase your ROAS. When you understand your customers, craft killer ad copy, test, measure, and create a powerful sales funnel, your business will be well on its way to generating a higher ROAS for your business.

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