To determine whether an ad campaign is making or losing money, you must measure the return on ad spend (ROAS). It’s nice to get a lot of clicks, but they’re not worth much if that’s the only action your customer takes. The same goes with conversion data — if you’re only measuring whether people are entering your funnel, this doesn’t tell us how well a new campaign is producing revenue.
Analyze your click and conversion data, but make sure you also understand if your ads are generating more revenue than the money they cost you. You can think of ROAS as display advertising ROI or search engine ad ROI where the investment you’re tracking is the cost of the ad. Follow these tips to optimize your ROAS.
AdRoll’s ROAS calculator will estimate what would happen when you allocate budget towards your marketing goals, including attributed revenue, audience reach, clicks, and more:
Refine Your Keywords and Keep Refining
- To target customers who are already looking to buy the product you offer, select narrow keywords. So instead of “dresses,” you may want to use “off-the-shoulder prom dresses.”
- Use long-tail keywords to optimize all your product pages.
- Use analytics tools to find high search, low competition keywords that your competition may be missing.
- Consider keywords that indicate the customer is serious about buying. An example is “free shipping.”
- Analyze your data to see what works for you and narrow your keywords accordingly.
Use Negative Keywords
Using negative keywords is a fast, easy way to lower your costs. Of course, you want to increase your ad revenues, but you also want to reduce costs. When buying PPC ads, pay attention to keywords that get clicks but rarely convert. You can add these to a negative keyword list, so people who search these words won’t see your ad. No sense in paying for clicks that are unlikely to convert.
Run a Brand Campaign
Bidding on your brand name is an almost sure-fire way to increase your ROAS. But wouldn’t someone who types your name into a search engine already know how to reach you? Here are a few facts:
- Branded search campaigns typically get better ROAS than non-branded campaigns.
- If you aren’t bidding on your name, your competitor probably is. So, when a customer types your name into search, your competitor’s name will come up. This brings up the obvious recommendation that while you’re bidding on your name, bid on your primary competitors’ names too.
- Bidding on your name gives you control over what customers see. This is particularly important if you’ve had some recent negative press or reviews.
Use Artificial Intelligence (AI) Technology to Adjust Your Bids in Real-Time
You don’t have to wait until you have time to sit down and analyze your ads to adjust them. You could lose revenue in the meantime. Now there’s advanced technology that enables you to submit unique bids in real-time for every impression to maximize the value of your campaign. Use a digital ad platform that automatically adjusts advertising bids on an ongoing basis to prioritize high-value targets and spend less money on low-value targets. Factors such as location, time of day, shopping behaviors, and more go into the calculation.
Promote Seasonal and Time-Sensitive Offers
Whatever the upcoming event, whether it’s Christmas, a conference, or an election, you can increase your return on ad spend and display advertising ROI by serving relevant ads when your customers are most interested.
Target By Location When Relevant
Be sure to only advertise to customers who can buy from you in their location. If you don’t ship somewhere, don’t pay for advertising that will reach people who live there. If you only have a brick and mortar store, only advertise to people close enough to likely shop at your store.
Tailor Your Landing Pages to Your Ads
Someone has clicked on your ad because they’re interested in flower-themed designer sheets. Great! But you may lose them if you send them to a general page on housewares. If you’re promoting your flower-themed designer sheets, send your customers to a landing page featuring those sheets. If you’re promoting a sale, send them to a landing page with details about the sale. Don’t make your customers search for what they saw in your ad, because you’ll lose customers and get a low ROAS.
Optimize for Phones and Other Mobile Devices
Over half of global web traffic is from mobile devices, so if you aren’t optimizing your e-commerce site for mobile, you’re losing money. Your mobile site needs to be inviting, uncluttered, easy to navigate, and quick to load. Most importantly, make sure the shopping cart experience is flawless. Catering to all your customers, not just those who access your site from a desktop or laptop, will increase your return on ad investment and display advertising ROI when you run campaigns.
Bid Strategically for Ads on Mobile, Tablet, and Desktop
You can set different bids for mobile, tablet, and desktop devices. If you’re using desktop as a default, you can bid a percentage for mobile devices, that is, a percentage more or less than you’re bidding for desktop. (The bid for mobile is usually lower.) The most effective way to bid for mobile devices is to use a digital ad platform that finds your audience across all devices.
Pay Attention to Conversion Rate Optimization (CRO)
As we’ve seen, clicks aren’t enough, and you need to be sure visitors are buying to increase your ROAS. You must convert those clicks into customers. Make it as easy as possible for customers to buy, because about 70% of online shoppers abandon their shopping carts. To reduce shopping cart abandonment:
- Offer a deal before the customer clicks out.
- Don’t sell a bad product.
- Show your site is secure.
- Use triggered offers.
- Use live chat.
- Analyze why your customers are abandoning their carts. What do they want?
- Downsell your product. (For example, offer a shipping discount.)
- Use retargeting.
Use Product Listing Ads (PLAs)
Don’t forget about product listing ads that appear at the top of Google results when you search for an item. They’re photos with a link to the product and the name or URL of the store. Clicks on PLAs have increased dramatically, particularly for mobile.
Improve Your Google Quality Scores to Improve Your ROAS
Google assigns a quality score to your ads, keywords, and landing pages. A high-quality score can reduce your ad prices and give you better ad positioning. It’s reported on a 1 to 10 scale and is based on factors that include ad relevance, landing page experience, and clickthrough rate. Your quality scores will increase as you increase the relevance of your ads and landing pages.
Maximize Your ROAS
What’s a good return on ad spend or display advertising ROI? It depends on your industry and your company goals. A lot goes into a good ROAS, so be sure to use a digital ad platform with AI to analyze and organize all the moving parts and accurately predict outcomes. ROAS can have a significant impact on your overall profits. Don’t leave it to guesswork.
Last updated on November 3rd, 2022.