Connect with us

MARKETING

Defining & Calculating Return on Ad Spend (ROAS)

Published

on

Defining & Calculating Return on Ad Spend (ROAS)

Wondering how to calculate ROAS? This oft-spotted acronym is an integral part of gauging the success of certain advertising efforts within a given marketing strategy. Whether you’re looking for info to boost your general knowledge base or want to understand the relationship between ROAS and campaigns, this quick guide has you covered.
 

What Is ROAS?

 
ROAS stands for “return on advertising spend.” This calculation is used to measure how much revenue a specific advertising campaign is bringing in compared to the amount of money spent on ads related to that campaign.

People tasked with managing ad accounts rely on ROAS to convey how cost-effective a campaign truly is. This is an objective and quantitative way to understand how a new ad campaign is running, but you can also use ROAS to find out whether an existing campaign is trending in the right direction.
 

How to Calculate Return on Ad Spend (ROAS)

 
It’s quite easy to calculate ROAS. Simply identify the revenue brought in by your ad campaign and divide that number by the cost of that same campaign. For example, if your ad spend totals $2,000 and your total ad revenue is $4,000, your ROAS calculation would be $4,000 divided by $2,000 = 200% (or a 2:1 ratio).

To make things even easier, you can use an online ROAS calculator to quickly determine how ad spend and ad revenue are playing out on a given campaign. All you need is your total ad spend and revenue, and the calculator does the rest.
 

Why Do Marketers Calculate ROAS?

 
Marketers measure ROAS to see how effective their ad campaigns truly are. This is a major step toward discerning whether a campaign is tracking toward pre-determined goals or falling short of expectations. Calculating ROAS early on in the campaign (and then at regular milestones moving forward) also helps marketers optimize advertising spend, as they can opt to decrease spending for low-performing campaigns and reallocate those funds to high-performing campaigns.

The information offered by ROAS can also help determine the wider direction of your marketing strategy. One relatively simple calculation gives you hints as to what campaigns, content types and distribution channels your target demo may be responding to most.
 

What’s Considered a Good ROAS?

 
Good ROAS is a relative concept that depends heavily on the goal of your campaign and the averages for your industry. For instance, if your goal is to drive awareness of a new streaming service, you may be okay with a lower ROAS because that number reflects conversions rather than awareness. When you’re measuring ROAS early on in the buyer’s journey, the numbers just may not be as impressive.

High ROAS matters more when your advertising strategy focuses on getting upfront revenue from a customer base that typically has a lower lifetime value. You want to see ROAS that are above the oft-cited 4:1 benchmark because it’s understood that will likely follow a downward trend over time.
 

How ROAS Relates to Profit and ROI

 
ROAS and ROI are often conflated, which makes sense when you realize that ROAS is basically one spoke in the ROI wheel. ROI stands for “return on investment,” which is a more long-term measurement of the return you get from larger marketing and advertising efforts. This includes things like fees paid to an SEO agency or your freelance video editing team. ROAS is a more short-term measurement that focuses solely on whether ads are driving revenue.

ROI also takes net profit into account (ROI is calculated as Net Profit divided by Net Spend), while ROAS deals with revenue and ad cost.

Many marketers choose to measure both ROAS and ROI, as the metrics combined can help the powers that be understand campaign performance and how it contributes to the business’s success and bottom line.
 

Key Factors & Considerations for an Accurate ROAS Calculation

 
Because you’re likely using ROAS to determine the future of your ad campaign, it’s crucial your calculations are as accurate as possible.

Here are some things to consider as you work with ROAS, plus a few tips on how you can ensure your numbers are right on the mark.
 

Don’t Forget the Fees

 
Some marketers prefer to calculate ROAS based solely on ad costs, but it can be helpful to take peripheral expenses into account as well.

If you’ve decided to include all ad-associated costs in your ROAS calculation, you’ll need to round up receipts that reflect fees paid out while executing the campaign. This includes vendor fees and transaction fees, like the percentage PayPal takes when charging for goods and services or the rate platforms charge to facilitate a campaign. Mine your accounts for other less conspicuous charges like commissions and relevant employee expenses, too.
 

Popularity Pays Off

 
Remember how we said good ROAS is all relative? Here’s another example of that. Brands new to the market are likely to have lower ROAS because they’re shouldering the entire cost of raising awareness and acquiring those customers. Existing brands launching a new campaign might have a high ROAS right off the bat because they’re able to leverage brand familiarity and established relationships.
 

Known When to Hold ‘Em — and When to Fold ‘Em

 
It’s vital to understand when ROAS percentages should be worrisome and when you just need to wait out a slump. Typically, ROAS below 300% is cause for concern, meaning you either need to revamp and reoptimize your campaign or consider pulling it altogether. Re-optimization could mean:

  • Changing up the demographic you’re targeting
  • Trying new ad types and channels
  • Tweaking pricing or the type of promotional offer attached to the campaign
  • Reworking the actual look and feel of your ads — perhaps hiring a writer to change the tone of the service description or changing up the imagery

But sometimes, especially when a company or service offering is brand new, ramping up ROAS just takes time.
 

Avoid Relying on ROAS Alone

 
ROAS is important, but it shouldn’t be evaluated in a vacuum. Instead, look at ROAS in relation to other factors such as the goal of your advertising campaign and conversion factors like click-through rates to get a better understanding of the overall health of your initiative. Actual numbers matter too — you could have a high ROI and still lose money if production costs are overwhelming.

“We are very data-driven and everything we do has to have a KPI associated with it. ROAS is only one point in the picture and it’s not always even the most important one. People can get very focused on ROAS but especially in the testing and trying phase, there’s a lot of learnings and KPIs that could make more sense.”

– Maya Wasserman | Head of Marketing / Director of Marketing Communications, Sony (Source)

 

Conclusion

 
Determining how to calculate ROAS is important, but it’s arguably even more critical to understand why ROAS matters and what role it plays in strategizing and executing effective ad campaigns. These concepts become even more important in niches like non-click-based media, like Streaming.

For example, at Tinuiti we often see marketers struggling to measure the full impact and demand of ad campaigns and consumer activity. But make no mistake, Streaming drives ROAS and we can prove it. Our patented solution, powered by Bliss Point technology, intelligently applies modern machine learning and optimization techniques to the non-click-based Streaming environment. That’s a fancy way of saying we can prove the channel is working with our highly technical attribution tools, even without a clickstream. That’s good news for high-growth brands looking to efficiently scale streaming campaigns with full-funnel attribution.

Want to learn more about the relationship between streaming and bottom of the funnel channels? Be sure to register for our upcoming webinar “Streaming Ads that Work – and Why”  Streaming+ today.

Source link

Keep an eye on what we are doing
Be the first to get latest updates and exclusive content straight to your email inbox.
We promise not to spam you. You can unsubscribe at any time.
Invalid email address

MARKETING

How to Increase Survey Completion Rate With 5 Top Tips

Published

on

How to Increase Survey Completion Rate With 5 Top Tips

Collecting high-quality data is crucial to making strategic observations about your customers. Researchers have to consider the best ways to design their surveys and then how to increase survey completion, because it makes the data more reliable.

→ Free Download: 5 Customer Survey Templates [Access Now]

I’m going to explain how survey completion plays into the reliability of data. Then, we’ll get into how to calculate your survey completion rate versus the number of questions you ask. Finally, I’ll offer some tips to help you increase survey completion rates.

My goal is to make your data-driven decisions more accurate and effective. And just for fun, I’ll use cats in the examples because mine won’t stop walking across my keyboard.

Why Measure Survey Completion

Let’s set the scene: We’re inside a laboratory with a group of cat researchers. They’re wearing little white coats and goggles — and they desperately want to know what other cats think of various fish.

They’ve written up a 10-question survey and invited 100 cats from all socioeconomic rungs — rough and hungry alley cats all the way up to the ones that thrice daily enjoy their Fancy Feast from a crystal dish.

Now, survey completion rates are measured with two metrics: response rate and completion rate. Combining those metrics determines what percentage, out of all 100 cats, finished the entire survey. If all 100 give their full report on how delicious fish is, you’d achieve 100% survey completion and know that your information is as accurate as possible.

But the truth is, nobody achieves 100% survey completion, not even golden retrievers.

With this in mind, here’s how it plays out:

  • Let’s say 10 cats never show up for the survey because they were sleeping.
  • Of the 90 cats that started the survey, only 25 got through a few questions. Then, they wandered off to knock over drinks.
  • Thus, 90 cats gave some level of response, and 65 completed the survey (90 – 25 = 65).
  • Unfortunately, those 25 cats who only partially completed the survey had important opinions — they like salmon way more than any other fish.

The cat researchers achieved 72% survey completion (65 divided by 90), but their survey will not reflect the 25% of cats — a full quarter! — that vastly prefer salmon. (The other 65 cats had no statistically significant preference, by the way. They just wanted to eat whatever fish they saw.)

Now, the Kitty Committee reviews the research and decides, well, if they like any old fish they see, then offer the least expensive ones so they get the highest profit margin.

CatCorp, their competitors, ran the same survey; however, they offered all 100 participants their own glass of water to knock over — with a fish inside, even!

Only 10 of their 100 cats started, but did not finish the survey. And the same 10 lazy cats from the other survey didn’t show up to this one, either.

So, there were 90 respondents and 80 completed surveys. CatCorp achieved an 88% completion rate (80 divided by 90), which recorded that most cats don’t care, but some really want salmon. CatCorp made salmon available and enjoyed higher profits than the Kitty Committee.

So you see, the higher your survey completion rates, the more reliable your data is. From there, you can make solid, data-driven decisions that are more accurate and effective. That’s the goal.

We measure the completion rates to be able to say, “Here’s how sure we can feel that this information is accurate.”

And if there’s a Maine Coon tycoon looking to invest, will they be more likely to do business with a cat food company whose decision-making metrics are 72% accurate or 88%? I suppose it could depend on who’s serving salmon.

While math was not my strongest subject in school, I had the great opportunity to take several college-level research and statistics classes, and the software we used did the math for us. That’s why I used 100 cats — to keep the math easy so we could focus on the importance of building reliable data.

Now, we’re going to talk equations and use more realistic numbers. Here’s the formula:

Completion rate equals the # of completed surveys divided by the # of survey respondents.

So, we need to take the number of completed surveys and divide that by the number of people who responded to at least one of your survey questions. Even just one question answered qualifies them as a respondent (versus nonrespondent, i.e., the 10 lazy cats who never show up).

Now, you’re running an email survey for, let’s say, Patton Avenue Pet Company. We’ll guess that the email list has 5,000 unique addresses to contact. You send out your survey to all of them.

Your analytics data reports that 3,000 people responded to one or more of your survey questions. Then, 1,200 of those respondents actually completed the entire survey.

3,000/5000 = 0.6 = 60% — that’s your pool of survey respondents who answered at least one question. That sounds pretty good! But some of them didn’t finish the survey. You need to know the percentage of people who completed the entire survey. So here we go:

Completion rate equals the # of completed surveys divided by the # of survey respondents.

Completion rate = (1,200/3,000) = 0.40 = 40%

Voila, 40% of your respondents did the entire survey.

Response Rate vs. Completion Rate

Okay, so we know why the completion rate matters and how we find the right number. But did you also hear the term response rate? They are completely different figures based on separate equations, and I’ll show them side by side to highlight the differences.

  • Completion Rate = # of Completed Surveys divided by # of Respondents
  • Response Rate = # of Respondents divided by Total # of surveys sent out

Here are examples using the same numbers from above:

Completion Rate = (1200/3,000) = 0.40 = 40%

Response Rate = (3,000/5000) = 0.60 = 60%

So, they are different figures that describe different things:

  • Completion rate: The percentage of your respondents that completed the entire survey. As a result, it indicates how sure we are that the information we have is accurate.
  • Response rate: The percentage of people who responded in any way to our survey questions.

The follow-up question is: How can we make this number as high as possible in order to be closer to a truer and more complete data set from the population we surveyed?

There’s more to learn about response rates and how to bump them up as high as you can, but we’re going to keep trucking with completion rates!

What’s a good survey completion rate?

That is a heavily loaded question. People in our industry have to say, “It depends,” far more than anybody wants to hear it, but it depends. Sorry about that.

There are lots of factors at play, such as what kind of survey you’re doing, what industry you’re doing it in, if it’s an internal or external survey, the population or sample size, the confidence level you’d like to hit, the margin of error you’re willing to accept, etc.

But you can’t really get a high completion rate unless you increase response rates first.

So instead of focusing on what’s a good completion rate, I think it’s more important to understand what makes a good response rate. Aim high enough, and survey completions should follow.

I checked in with the Qualtrics community and found this discussion about survey response rates:

“Just wondering what are the average response rates we see for online B2B CX surveys? […]

Current response rates: 6%–8%… We are looking at boosting the response rates but would first like to understand what is the average.”

The best answer came from a government service provider that works with businesses. The poster notes that their service is free to use, so they get very high response rates.

“I would say around 30–40% response rates to transactional surveys,” they write. “Our annual pulse survey usually sits closer to 12%. I think the type of survey and how long it has been since you rendered services is a huge factor.”

Since this conversation, “Delighted” (the Qualtrics blog) reported some fresher data:

survey completion rate vs number of questions new data, qualtrics data

Image Source

The takeaway here is that response rates vary widely depending on the channel you use to reach respondents. On the upper end, the Qualtrics blog reports that customers had 85% response rates for employee email NPS surveys and 33% for email NPS surveys.

A good response rate, the blog writes, “ranges between 5% and 30%. An excellent response rate is 50% or higher.”

This echoes reports from Customer Thermometer, which marks a response rate of 50% or higher as excellent. Response rates between 5%-30% are much more typical, the report notes. High response rates are driven by a strong motivation to complete the survey or a personal relationship between the brand and the customer.

If your business does little person-to-person contact, you’re out of luck. Customer Thermometer says you should expect responses on the lower end of the scale. The same goes for surveys distributed from unknown senders, which typically yield the lowest level of responses.

According to SurveyMonkey, surveys where the sender has no prior relationship have response rates of 20% to 30% on the high end.

Whatever numbers you do get, keep making those efforts to bring response rates up. That way, you have a better chance of increasing your survey completion rate. How, you ask?

Tips to Increase Survey Completion

If you want to boost survey completions among your customers, try the following tips.

1. Keep your survey brief.

We shouldn’t cram lots of questions into one survey, even if it’s tempting. Sure, it’d be nice to have more data points, but random people will probably not hunker down for 100 questions when we catch them during their half-hour lunch break.

Keep it short. Pare it down in any way you can.

Survey completion rate versus number of questions is a correlative relationship — the more questions you ask, the fewer people will answer them all. If you have the budget to pay the respondents, it’s a different story — to a degree.

“If you’re paying for survey responses, you’re more likely to get completions of a decently-sized survey. You’ll just want to avoid survey lengths that might tire, confuse, or frustrate the user. You’ll want to aim for quality over quantity,” says Pamela Bump, Head of Content Growth at HubSpot.

2. Give your customers an incentive.

For instance, if they’re cats, you could give them a glass of water with a fish inside.

Offer incentives that make sense for your target audience. If they feel like they are being rewarded for giving their time, they will have more motivation to complete the survey.

This can even accomplish two things at once — if you offer promo codes, discounts on products, or free shipping, it encourages them to shop with you again.

3. Keep it smooth and easy.

Keep your survey easy to read. Simplifying your questions has at least two benefits: People will understand the question better and give you the information you need, and people won’t get confused or frustrated and just leave the survey.

4. Know your customers and how to meet them where they are.

Here’s an anecdote about understanding your customers and learning how best to meet them where they are.

Early on in her role, Pamela Bump, HubSpot’s Head of Content Growth, conducted a survey of HubSpot Blog readers to learn more about their expertise levels, interests, challenges, and opportunities. Once published, she shared the survey with the blog’s email subscribers and a top reader list she had developed, aiming to receive 150+ responses.

“When the 20-question survey was getting a low response rate, I realized that blog readers were on the blog to read — not to give feedback. I removed questions that wouldn’t serve actionable insights. When I reshared a shorter, 10-question survey, it passed 200 responses in one week,” Bump shares.

Tip 5. Gamify your survey.

Make it fun! Brands have started turning surveys into eye candy with entertaining interfaces so they’re enjoyable to interact with.

Your respondents could unlock micro incentives as they answer more questions. You can word your questions in a fun and exciting way so it feels more like a BuzzFeed quiz. Someone saw the opportunity to make surveys into entertainment, and your imagination — well, and your budget — is the limit!

Your Turn to Boost Survey Completion Rates

Now, it’s time to start surveying. Remember to keep your user at the heart of the experience. Value your respondents’ time, and they’re more likely to give you compelling information. Creating short, fun-to-take surveys can also boost your completion rates.

Editor’s note: This post was originally published in December 2010 and has been updated for comprehensiveness.

Click me

Source link

Keep an eye on what we are doing
Be the first to get latest updates and exclusive content straight to your email inbox.
We promise not to spam you. You can unsubscribe at any time.
Invalid email address
Continue Reading

MARKETING

Take back your ROI by owning your data

Published

on

Treasure Data 800x450

Treasure Data 800x450

Other brands can copy your style, tone and strategy — but they can’t copy your data.

Your data is your competitive advantage in an environment where enterprises are working to grab market share by designing can’t-miss, always-on customer experiences. Your marketing tech stack enables those experiences. 

Join ActionIQ and Snowplow to learn the value of composing your stack – decoupling the data collection and activation layers to drive more intelligent targeting.

Register and attend “Maximizing Marketing ROI With a Composable Stack: Separating Reality from Fallacy,” presented by Snowplow and ActionIQ.


Click here to view more MarTech webinars.


About the author

Cynthia RamsaranCynthia Ramsaran

Cynthia Ramsaran is director of custom content at Third Door Media, publishers of Search Engine Land and MarTech. A multi-channel storyteller with over two decades of editorial/content marketing experience, Cynthia’s expertise spans the marketing, technology, finance, manufacturing and gaming industries. She was a writer/producer for CNBC.com and produced thought leadership for KPMG. Cynthia hails from Queens, NY and earned her Bachelor’s and MBA from St. John’s University.

Source link

Keep an eye on what we are doing
Be the first to get latest updates and exclusive content straight to your email inbox.
We promise not to spam you. You can unsubscribe at any time.
Invalid email address
Continue Reading

MARKETING

Revolutionizing Auto Retail: The Game-Changing Partnership Between Amazon and Hyundai

Published

on

Revolutionizing Auto Retail: The Game-Changing Partnership Between Amazon and Hyundai

Revolutionizing Auto Retail The Game Changing Partnership Between Amazon and Hyundai

In a groundbreaking alliance, Amazon and Hyundai have joined forces to reshape the automotive landscape, promising a revolutionary shift in how we buy, drive, and experience cars.

Imagine browsing for your dream car on Amazon, with the option to seamlessly purchase, pick up, or have it delivered—all within the familiar confines of the world’s largest online marketplace. Buckle up as we explore the potential impact of this monumental partnership and the transformation it heralds for the future of auto retail.

Driving Change Through Amazon’s Auto Revolution

Consider “Josh”, a tech-savvy professional with an affinity for efficiency. Faced with the tedious process of purchasing a new car, he stumbled upon Amazon’s automotive section. Intrigued by the prospect of a one-stop shopping experience, Josh decided to explore the Amazon-Hyundai collaboration.

The result?

A hassle-free online car purchase, personalized to his preferences, and delivered to his doorstep. Josh’s story is just a glimpse into the real-world impact of this game-changing partnership.

Bridging the Gap Between Convenience and Complexity

Traditional car buying is often marred by complexities, from navigating dealership lots to negotiating prices. The disconnect between the convenience consumers seek and the cumbersome process they endure has long been a pain point in the automotive industry. The need for a streamlined, customer-centric solution has never been more pressing.

1701235578 44 Revolutionizing Auto Retail The Game Changing Partnership Between Amazon and Hyundai1701235578 44 Revolutionizing Auto Retail The Game Changing Partnership Between Amazon and Hyundai

Ecommerce Partnership Reshaping Auto Retail Dynamics

Enter Amazon and Hyundai’s new strategic partnership coming in 2024—an innovative solution poised to redefine the car-buying experience. The trio of key developments—Amazon becoming a virtual showroom, Hyundai embracing AWS for a digital makeover, and the integration of Alexa into next-gen vehicles—addresses the pain points with a holistic approach.

In 2024, auto dealers for the first time will be able to sell vehicles in Amazon’s U.S. store, and Hyundai will be the first brand available for customers to purchase.

Amazon and Hyundai launch a broad, strategic partnership—including vehicle sales on Amazon.com in 2024 – Amazon Staff

This collaboration promises not just a transaction but a transformation in the way customers interact with, purchase, and engage with their vehicles.

Pedal to the Metal

Seamless Online Purchase:

  • Complete the entire transaction within the trusted Amazon platform.
  • Utilize familiar payment and financing options.
  • Opt for convenient pick-up or doorstep delivery.
Ecommerce CertificationEcommerce Certification

Become A Certified E-Commerce Marketing Master

The Industry’s Most Comprehensive E-Commerce Marketing Certification For The Modern Marketer. Turn Products Into Profit, Browsers Into Buyers, & Past Purchasers Into Life-Long Customers

Click here

Hyundai’s Cloud-First Transformation:

  • Experience a data-driven organization powered by AWS.
  • Benefit from enhanced production optimization, cost reduction, and improved security.

Alexa Integration in Next-Gen Vehicles:

  • Enjoy a hands-free, voice-controlled experience in Hyundai vehicles.
  • Access music, podcasts, reminders, and smart home controls effortlessly.
  • Stay connected with up-to-date traffic and weather information.

Driving into the Future

The Amazon-Hyundai collaboration is not just a partnership; it’s a revolution in motion. As we witness the fusion of e-commerce giant Amazon with automotive prowess of Hyundai, the potential impact on customer behavior is staggering.

The age-old challenges of car buying are met with a forward-thinking, customer-centric solution, paving the way for a new era in auto retail. From the comfort of your home to the driver’s seat, this partnership is set to redefine every step of the journey, promising a future where buying a car is as easy as ordering a package online.

Embrace the change, and witness the evolution of auto retail unfold before your eyes.


Revolutionizing Auto Retail The Game Changing Partnership Between Amazon and Hyundai

Source link

Keep an eye on what we are doing
Be the first to get latest updates and exclusive content straight to your email inbox.
We promise not to spam you. You can unsubscribe at any time.
Invalid email address
Continue Reading

Trending