Two key KPIs to evaluate the performance of the advertising spend:
ROAS is a KPI used in marketing to measure the effectiveness of advertising campaigns. It tells you how much revenue you generate for every dollar you spend on advertising. Here’s the formula for calculating ROAS:
ROAS = Revenue / Advertising Cost
Where:
- Revenue: This is the total income generated from the advertising campaign. It's important to use revenue attributed to the specific campaign you're measuring, not overall revenue.
- Advertising Cost: This is the total amount spent on the advertising campaign. This includes all associated costs, such as advertising platform fees, creative development, and campaign management.
ROMI is a KPI used in marketing to measure the effectiveness of marketing activities and campaigns. It tells you how much profit you generate for every dollar you spend on marketing.Here’s the formula for calculating ROMI:
ROMI = (Marketing Profit / Marketing Investment) * 100%
Where:
- Marketing Profit: This is the total profit generated from your marketing activities, including revenue generated and any associated costs saved.
- Marketing Investment: This is the total amount spent on all of your marketing activities, including advertising, personnel costs, and any other relevant expenses.
Use the follow Google Ads calculator simulator to learn how to calculate ads spend ROI