4 ms·
Yes, obviously ROAS is only computed over the people who saw the ad. That's not in question. The point is that knowing how many people saw the ad and then bough
by GeneralMayhem 5y ago
Yes, obviously ROAS is only computed over the people who saw the ad. That's not in question. The point is that knowing how many people saw the ad and then bought the product doesn't actually tell you how effective the ad was at improving your business.
Imagine a product, let's call it Oxygen, that every single person buys $10 worth of every month. It has 100% market penetration.
One day, Oxygen Corp decides to take out a $1M ad buy. They reach 1 million people, all of whom then go on to buy $10 of Oxygen, as measured by cross-site conversion tracking. $1M ad buy to move $10M of product - that's a whopping 10.0 ROAS. Must be the most effective ad campaign ever run, right?
- namanyayg 5y agoI see what you mean and stand corrected; I wasn't assuming the case where the product sells without advertising at all. From a gut feeling I can say that the customer came from some result of previous advertising (as we're talking about products like sodas not life-essentials like oxygen), but I guess there's no way to know since those previous ads being tv/print ads were not tracked. If we suddenly stopped all other forms of advertising and only used online ads, in 10-20 years each customer can be tracked exactly to what ad created the first impression about the brand and thus be more accurate (still excepting marketing like word of mouth though)
- jefftk 5y agoYou can run that same study with a control group, and sophisticated advertisers do. Show some of the users ads for your product, and other users ads for something unrelated, and compare their purchases of your product.