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ROAS as KPI

[ Edited ]
Top Contributor
# 1
Top Contributor

Do any of your clients prefer the ROAS KPI?  In all of my years, we have usually focused on conversions and CPA, but I just inherited/won a group of clients that keenly focus on ROAS.

 

How do you find the two differ?  Wonder why AW isn't calling it ROAS anymore -- I found the metric for "all conversion value/cost".  It threw me off a little.

 

My client is looking for an ROAS of 10. What do yours do?

 

Shout out to Vertical Rail for an easy definition.

1 Expert replyverified_user

ROAS as KPI

[ Edited ]
Explorer ✭ ✭ ✭
# 2
Explorer ✭ ✭ ✭

I use CPA and Conversions mostly i dont have much experience in ROAS. 

 

regards,

 

Zaby

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ROAS as KPI

Follower ✭ ✭ ✭
# 3
Follower ✭ ✭ ✭

I've also seen it as SCR (Sales/Cost Ratio) and ROI (Return on Investment) for the most part I've seen in favored in e-commerce/on-line retail

 

ROAS as KPI

Top Contributor
# 4
Top Contributor

Thanks guys!  It's always fun to try new things...  So, jumping on the ROAS bandwagon.

 

ROAS as KPI

Badged Google Partner
# 5
Badged Google Partner

ROI, or ROAS? ROI is non-negotiable. ROAS can be "sold" to the client... If they believe the sales pitch.

 

What factors does the client consider part of the ROAS equation?

Are we talking about gross revenues, or net profits?

Last click direct attribution, or multi-channel report revenues/net profits?

Are you compiling the reports, or do they have a model for you to follow?

 

We can look at the same set of data, in terms of analytics eCommerce dollars, and come up with a dozen different ROAS models. The bottom line net profit ROI of the business, is the bottom line net profit ROI of the business. As an advertiser, you have no control over the margins and costs, etc., on the business side of things. Which, makes ROAS a "fairer" model for you in some ways... On the other hand, you are too dang good not to have the dollars and sense conversation with a client who may actually be interested in communicating with you Shanee. Smiley Happy 

 

If you can, try to have the higher level business conversation with the client. Is the eCommerce data accurate? Do you have proper attribution? What are their margins? Etc., etc.... If you have to follow their model to gain their trust, you know you can definitely do "better than", regardless of the model.

 

In the long run, if you can change that model to one of your own, which has value at every level of the company, then your overall value is much, much, greater than the (advertised) services you provide alone. There are a lot of frustrations which go right out the window, when you are the one telling the client how much money they make, because they let you do what you do. Smiley Happy

Tom