ROAS indicates how much money you generated with sales over each dollar invested in marketing. It allows you to assess the yield of the investment. It is calculated using the formula Sales/Publicity investment.
👉🏼 The target ROAS is the return you feel comfortable with, and the one that is profitable. For instance, if by receiving 10 dollars for each dollar invested you will have the profitability you expect, then your target ROAS will be 10.
To calculate it, you need to take into account the stage in which your ecommerce is, and which are the most urgent goals. This means that, if your store does not have an important amount of traffic, or it generates few sales, the target ROAS should be set based on the fact that we first want to take more people to your site. In this case, the focus will be set on the traffic and not on sales, and thus the target ROAS should be lower.
Our campaigns should aim to get this ROAS and if it is exceeded, you can invest the difference in ads. In other words, supposing your target ROAS is 10 and your obtained ROAS is 20, you will have these 10 dollar surplus for each dollar invested, which will be useful to keep on betting on our campaigns.
If you increase your investment, you will get more sales and more traffic!
⬆️ If your ROAS exceeds your target ROAS, you should increase your investment. Learn more about this by reading this article.
⬇️ If your ROAS is below your target ROAS, you should pay attention to the improvement opportunities we suggest in the dashboard in our platform.
❗️ Please note: if you have the ROAS as the main metric in your dashboard, you can change your target ROAS. Learn how to do this by following this tutorial.