Tips for increasing your paid social ROAS

If you are spending on PPC ads to drive traffic to your eCommerce website, keep in mind that getting clicks is just half the work done.

Your ads' goal is to generate traffic. If they fail, they aren’t very effective. Do you know how much revenue your ads make? Are they worth the investment? It’s easy to understand.

Measuring ROAS (return on ad spend) tells you exactly which of your PPC ads are the best money generators. This way you will be able to get the most out of your online advertisement.

How to Measure ROAS

You need to track the conversions and sales metrics of your PPC ads to improve ROAS. ROAS is the revenue generated by a campaign divided by the amount spent on that campaign. Most paid search platforms offer conversion and sales tracking. You can set a transaction conversion value and measure the value generated by each campaign.

When measuring ROAS, be sure to consider these factors:

• Partner/Vendor costs: Here are the general fees and commissions associated with partners and suppliers that help the campaign. A table must be prepared to accurately account for the costs of internal advertising staff, such as salaries and other related costs. If these factors are not precisely quantified, ROAS will not explain the effectiveness of individual marketing efforts and its usefulness as a metric will decrease.
• Affiliate Commission: The percentage commission paid to affiliates, as well as network transaction fees.
• Clicks and Impressions: metrics such as average cost-per-click, total clicks, the average cost per thousand impressions, and impressions purchased.
• Calculating ROAS

The formula is simple - divide the revenue generated by the amount spent on an ad campaign.

For example, a company spends $3,600 on online advertising in a single month. This month's campaign is generating revenue from 21,600. Therefore, the ROAS is a ratio of 6 to 1 (or 600%).

For every dollar that a company spends on its advertising campaign, it generates $ 6 in revenue.

How To Improve the ROAS of Your PPC Campaign

To improve the ROAS of any campaign, you can:

• Maximize revenue generated while keeping costs stable.
• Decrease the cost of ads while maintaining revenue.
• Increase revenue while reducing costs.

Here's how to either increase revenue or reduce costs by increasing the ROAS of your PPC campaigns:

Optimizing Mobile-Friendliness

As more users start searching online on their smartphones, it’s of great importance that your website is designed to be mobile-friendly. It doesn't matter how tempting your PPC ads are if your website doesn't provide a mobile user experience that is converting. You may pay for clicks but not get the conversion!

There are many ways to optimize your mobile shopping experience, such as improving boot time, using local services to deliver personalized content, using design elements, to decompose product pages and optimize your cashier for reducing cart abandonment.

If you want to test for mobile-friendliness, use Google’s Mobile-Friendly Test.

Your Competitors -Your Best Friends

Spy on your competitors. Keep your friends close and your enemies even closer. There is a handful of tools for this mission. Analyze their campaigns and see what’s working and what’s not.

Pay more attention to the keywords they use and their copy. Do they use the words better than you? Maybe you need help? Again remember that driving traffic is only the beginning. Identify which ads are generating revenue. As I said in the first sentence – analyze! Analyze longer-term trends to find out which ads not only get clicks but also perform well in terms of on-site time and bounce rate.

Keyword Targeting

Do a bit of research and get to know your visitors. Your keyword targeting has to be specific to attract visitors who are looking for the exact product you're advertising.

Long-tale keywords are a great tool when it comes to attracting high-quality traffic. Use PPC software or keyword detection tools to identify highly specific, low-competition keywords that your competitors are likely to miss out on. You can get more clicks at a lower cost.

Another great tip is to refine your negative keyword list. To do so, open your search terms report and identify the keywords that are getting you clicks, but no conversions. Done? Now forget about them – forever! Also, add them to your negative keyword list so searches for these keywords won’t trigger your ad.

Quality Score – More For Less

Source

"Quality Score is an estimate of how relevant your ads, keywords, and landing pages are to a person who sees your ad. Higher Quality Scores typically lead to lower costs and better ad positions.”

Quality score factors to take into account. Google does so you better do it too:

• Expected click-through rate
• Ad relevance, and
• Landing page relevance

The relevance of your campaign is part of the formula that determines the Quality Score for your keywords. One of the best ways to improve the relevance of your ads is to structure them into small, well-organized groups. Adding too many keywords in one ad group makes it harder to ensure that your ads are relevant to each one of them.

A FINAL WORD ON USING ROAS TO IMPROVE YOUR E-COMMERCE PPC CAMPAIGNS

Now that you know what is ROAS and how important it is, you better start tracking this key metric.

Here’s a quick recap of how you can boost your ROAS:

• Optimizing Mobile-Friendliness
• Your Competitors -Your Best Friends
• Keyword Targeting
• Quality Score – More For Less

In addition to these techniques, it is also important to optimize your bidding strategy; it also affects your ROAS.