What do you do when your ad campaign’s ROAS is low? Don’t pause your ads before taking these steps first.
Review ROAS accuracy If your ROAS isn’t accurate, you could unnecessarily cancel a high-performing campaign.When faced with a sub-par ROAS, your first course of action should be to review your metrics. Are you accounting for all of the costs of your advertising? What advertising attribution model are you using?(Attribution model is telling your analytics which channel or keyword to give credit for the sale/conversion) First or last-click attribution models can affect ROAS, causing a high-performing campaign to appear unsuccessful. Be sure to use an attribution model that makes sense for your campaign.Are you including costs external to your advertising costs? If so, these costs could distort your ROAS.
Lower your ads costs ROAS incorporates two metrics: your ad costs and your revenue. If you can decrease your ad cost, you can significantly improve your ROAS.How this looks can vary depending on your business niche, your ads manager, and the ads types you're running. However, factors to consider when attempting to reduce your ads costs are:● Decrease time spent on ad management: If you're relying on an ad management agency, you could shift it in-house. If your in-house staff struggle and spend too much time, you might consider outsourcing it.● Review negative keywords: Ensure you're not wasting ad budget on keyword terms you don’t intend to target. On average, Google Ads account users waste up to 76% of their budget unintentionally on non-targeted keywords.● Improve quality score: Google’s Quality Score measures quality, and whether or not an ad is relevant to its target keywords. A higher Quality Score results in a higher ad ranking, which can significantly reduce wasted ad budget and increase revenue.
Increase revenue generated by ads The other vital factor in ROAS is revenue. If you’ve done all you can to decrease your ads' cost, look for ways to increase your ads revenue generation. Consider ROAS, among other metrics like CTR and CPC, to identify where your ads might be falling short. Then try these tactics to increase revenue generation from your ads:● Optimize landing pages: If an ad demonstrates a high CTR and a low ROAS, it could be a sign that your landing page is not converting efficiently. Be sure to use consistent language on both the ad and the landing page, and include a compelling call-to-action.● Rethink your keywords: Are you targeting the less competitive keywords? If your ROAS is low, revisit your keyword research. Try to identify keywords with less competition for which your ads can boost performance.● Automate bidding: If you're running Google ads, consider using Google’s automated bidding features, which allow you to set a target ROAS.
There is no silver bullet approach to improving ROAS. Analyze ROAS in tandem with other relevant metrics you're tracking for the most thorough method of identifying where your ad campaign strategy could be bolstered.It could be your ad, your conversion funnel, target keywords, or multiple other factors. That said, by following the above-stated tips, you can set out on the right foot.