Common ROAS Optimization Mistakes to Avoid
A campaign can generate plenty of clicks, conversions, and revenue and still fail to deliver the return a business needs. Return on Ad Spend (ROAS) is where it comes in handy. It moves the focus from the amount of activity that an ad generates to the actual results that it is creating.
But optimizing Return on Ad Spend (ROAS) isn’t as straightforward as reducing the budget of campaigns that appear to be costing a lot of money. A seemingly sensible first decision might turn out to be a real obstacle to maintaining valuable customers, or to the expansion of a campaign.
Effective ROAS optimization techniques are grounded in a comprehensive understanding of the entire picture: sources of revenue, who to pursue and who to avoid, how campaigns interact, and what the data is actually saying.
Chasing the Cheapest Conversions
It might seem like a victory if the cost per conversion is low. But a cheap conversion isn’t necessarily a valuable one.
One campaign may yield low-cost leads that don’t convert, and another may cost more per lead, but yield higher quality customers. So, simply counting acquisition costs can mislead you into making the wrong decisions on a campaign.
When possible, the Return on Ad Spend (ROAS) optimization should be linked to the customer value and to the income derived from the advertising.
Making Changes Too Quickly
A campaign is having a poor day, and the budget is reduced. A new creative underperforms for a couple of days, and it’s turned off. Such rapid responses can make optimization more challenging than it is.
There is bound to be some fluctuation in advertising performance. Wait until campaigns have yielded useful information before making major changes, but be quick to act if a technical or performance problem becomes apparent.
Sometimes, the most optimal choice is to await further evidence.
Looking Only at Last Click
The last click before a sale does not necessarily cause the sale.
A social ad can be the initial touchpoint for a customer to learn about a brand, followed by display ads and ultimately search ads, before they convert. When all the credit is attributed to that last click, other channels may seem less important than they really are.
Leverage attribution data along with other performance metrics to gain insight into channel contribution across the customer journey.
Ignoring Creative Fatigue
Even if a campaign starts out with good performance, an audience can become fatigued with the same message.
It’s not necessarily the case that the issue is targeting or bidding as the engagement starts to drop. There are times when the creative has just been played too many times.
Monitor frequency and engagement levels and add new ideas before it goes to waste. New creative can be used to reach the same audience again.
Optimizing Without Business Context
While Return on Ad Spend (ROAS) is crucial, it shouldn’t be the only metric.
A campaign may be very effective but not be a high repeat-purchaser campaign. Another campaign might generate less short-term return, but result in higher lifetime-value customers.
That’s why Return on Ad Spend (ROAS) should be taken into account in conjunction with revenue, margins, customer quality, retention, and overall business objectives. The correct optimization choice will rely on the business’s specific goals.
Common ROAS Optimization Mistakes to Avoid
Ready to Improve Your ROAS?
Better Return on Ad Spend (ROAS) doesn’t come from making the biggest number on a dashboard look better. It’s about knowing what’s pushing revenue and making strategic decisions about where putting an ad dollar will make the most sense.
Brill Media provides businesses with the insight and tools they need to assess campaign performance, user engagement, creative effectiveness, and media allocation to develop Return on Ad Spend (ROAS) optimisation strategies for improved advertising efficiency and future growth.
Common ROAS Optimization Mistakes to Avoid
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