What is ROI and ROAS? Optimize your budget to generate results

21 December 2022 | By Rafael Montero | COMMUNICATION

What is ROI and ROAS? Optimize your budget to generate results

At Axovia we focus on results and that is why one of the main metrics we measure is ROI and ROAS, in this blog we will explain a little more what is ROI and ROAS and 3 Keys to improve them. 

 ROI and ROAS What are they, and what are they for?

ROI (Return On Investment), applies to any type of project, but especially in marketing is the king, as it allows us to evaluate our performance.

To calculate it, we can use this formula: ROI = (Income - Expenses) / Expenses x 100

This finally expresses in percentage how much money I am going to generate as a result of the costs I have for each peso invested and can justify requesting more budget to our clients or projects. 

For those of us who like data and not opinions, this metric compares different actions with each other, but beware; an important factor to consider is the time in which you expect results, so before the action must be established how and when we expect to achieve the goal.

We also have the ROAS (Return On Advertising Spend) which would be Return on Advertising Investment ROAS = Sales Revenue / Expenses.

This metric we are going to see in all advertising campaigns, it works both Google and Facebook and with the rest of platforms usually throw us this metric. Working with ROAS is a little simpler because here it takes into account the income and costs, basically this formula is to tell me that for every peso I invest in advertising how many pesos in sales will return us. 

3 Keys to improve your ROI 

Optimize lead generation.

The return on investment in digital media is concentrated in two categories in which a company invests. Increasing the Conversion Ratio per landing pages by creating dynamic pages with personalized content according to the user.

Include in addition to the contact form, CTA buttons or for ChatBot or WhatsApp, which allows us the immediacy of contact, as well as adding the contact number on the page. 

Measure the ROI of each Campaign. 

In addition to the above-mentioned, knowing for example what is the ROI of Email Marketing campaigns or which products are giving higher return, it is necessary to make adjustments to continue improving.

First test and then invest

Take advantage of digital marketing, test the actions to be executed to project the results and thus take care of the investment, for example, what CTA should be used in a landing page? What promotion and what type of promotion has the best return? 

Do not waste a budget that does not generate good results.

By Rafael Montero




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