How Attribution Impacts ROAS Measurement

Start Now

Marketing team analyzing ROAS across desktop, laptop and mobile

A customer views a social media ad, does a search for the brand a couple of days later, and then clicks a search ad and buys the product. But who takes the credit - which channel?

This depends upon the method of measurement used for the conversion. One website might count the social ad as a sale, another might count it 100% as paid traffic. Every individual can have its own distinct and exclusive Return on Ad Spend (ROAS) for the same customer journey.

This is difficult for advertisers seeking to understand what is and is not working. Without attribution, there may be a lack of information to support budget decisions. The first key component of an effective Return on Ad Spend (ROAS) optimization strategy is to understand how conversions are being attributed and what these numbers mean.

Understand Where Revenue Comes From

Return on Ad Spend (ROAS) is the amount of revenue generated from advertising divided by the amount of money invested in advertising. It’s easy to do the math, but it’s harder to know which campaign performed well.

Ad platforms employ various attribution models, conversion windows, and tracking approaches. Therefore, the exact same purchase might appear in different reports.

Make sure that the reporting settings are the same before comparing campaign results. Otherwise, discrepancies in reported ROAS could be due to measurement instead of performance.

Online store owners celebrating sales driven by advertising

Look Beyond the Last Click

Last-click attribution puts the credit for a conversion on the last click seen by the user before the conversion. Easy to understand, but can fail to account for prior interactions that may have contributed to the purchase.

A customer may come to know a brand from a connected TV campaign, interact with a social media campaign, and then convert via a paid search ad. Last-click reporting can result in search getting all the credit even if earlier ads helped to create awareness.

Search isn’t less valuable, though. It’s not always what it seems to be.

Different attribution views can help marketers gain insight into the role of channels throughout the customer journey.

Family watching connected TV, an early touchpoint in the customer journey

Check Your Attribution Window

Not all visitors to the website will immediately convert. Some of the purchases take a matter of minutes and others will take days or weeks of contemplation.

The decision on the length of time after the eligible interaction a conversion can be attributed to is based on attribution windows. A shorter window may overlook delayed purchases; a longer window may yield another perspective on campaign performance.

The right window is based on the product, the sales cycle, and the goal of the campaign. Retain these settings when comparing campaigns and record any changes to ensure that performance changes are not misinterpreted as reporting changes.

Marketer reviewing a campaign calendar to set the attribution window

Connect ROAS With Business Results

Even if a campaign does well with ROI (Return on Investment), it may not be doing well with ROAS (Return on Ad Spend).

This is what is known as branded search. If a business is already known to customers, they can be found and turned into leads, generating a high reported ROI for the campaign. Its number of customers, however, does not provide a good indication of how many of those customers would have bought without the ad.

There is more to be learned from incrementality testing. Geographic holdout tests or conversion-lift tests can provide estimates of the outcomes that may have been different had the advertising been absent.

Attribution measures the credit across touchpoints and incrementality testing is a methodology that analyzes the incremental contribution of advertising. When interpreted properly, both can aid in better decisions.

Advertising reports comparing ROAS with business results

Use Attribution to Guide Decisions

Backing up attribution data with conversion quality, acquisition costs, and revenue trends helps to get the full picture. Ensure that reporting is aligned, evaluate platform performance against real sales, and explore the impact of each channel on the customer experience.

Attribution can give you an idea of the channel’s performance, but when it isn’t enough, incrementality testing can give you further insights. The aim is to make budget decisions based on the sum of the whole, rather than one ROAS number.