Industry Articles

ROAS vs ROI: Which Metric Should You Track?

By Brian Handrigan on April 6, 2018 |

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Far too many companies don’t concern themselves with tracking important metrics or data based on their sales and marketing results. Indeed, though it defies sound business logic, many small businesses simply ignore vital metrics and continue on the path toward marketing mediocrity. Still other business owners feel they don’t have the time or energy to commit to analyzing abstruse marketing data. With that in mind, today we’re going to break down two of the most beneficial metrics to understand and utilize: ROAS vs ROI. We’ll explain how each functions, and give you the intel you need to form a forward-thinking analytics plan.

ROAS: Definition and Benefits

ROAS, or return on ad spend, refers to the amount of capital you were able to raise as a result of your paid advertisements. Simple enough, right? ROAS is beneficial for a couple of reasons: first, it allows you to view in black-and-white terms how effective your ads were. And second, when calculated properly, it can provide you a blueprint toward optimizing your ads in the future.

Marketing ROI vs. ROAS

Marketing ROI vs. ROAS refers to the return on investment from all of your marketing efforts, including: blogs, sponsored articles, social media posts, offline advertising, and PPC ad campaigns. Every business should have a handle on their marketing ROI –– and for those companies that don’t use PPC advertising, then there’s little need to bother with ROAS. Conversely, if a large portion of your marketing efforts are centered around PPC campaigns, then calculating the efficacy of your ads (ROAS) takes on a greater level of importance. As for companies that deploy a combination of PPC and organic marketing efforts, determining both ROI and ROAS can be a great way to juxtapose both halves of your marketing strategy.

How to Best Calculate ROI and ROAS

Whether you should focus more on your total marketing ROI, or prioritize your ROAS, depends largely on the manner you choose to market yourself. However, regardless of which metric (or both) you choose to emphasize, the best way to calculate either is through call tracking. That’s because call tracking enables companies to isolate each piece of marketing content and assign a dollar figure to it. This is made possible, through the process of call attribution, wherein a company uses call tracking software to attribute sales conversions made offline, back to the online marketing content that generated it in the first place. 

Conclusion

No matter how you choose to analyze your marketing results, call tracking is the only way to truly identify what’s working for you and what isn’t. However, the best call tracking companies won’t just supply you with reactive metrics –– they’ll help you actively improve your ads and online content. Contact the Advocado team today and see how we can help you get started! Plus, to get a first-hand demonstration of what call tracking can do for you, request a free demo below:

ROI ROAS

Brian Handrigan

Written by Brian Handrigan

Co-founder and CEO of Advocado, Brian is a proven entrepreneur with a passion for expanding the intersection of technology and communication. He is a true innovator and has been a founder or co-founder of multiple startups. His talent to see “beyond the known” and identify the real opportunity has resulted in some of the most creative omni-channel solutions to date and was instrumental in inspiring the vision of Advocado. Brian has over twenty years of experience working leading companies such as TD Ameritrade, ADP, Walmart, WPP and major health insurance companies.
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