The most important metric for every company running paid ads isn’t engagement or clickthrough rate; it’s the return on ad spend (ROAS). This figure reveals how much money your company is making compared to how much it spends on advertising. Unlike a general marketing return on investment (ROI, ROAS tells you specifically how profitable your ads are. Many marketing software will calculate this for you, but you can do so by dividing the revenue attributable to ads by the total cost of advertising in a given period.
You might be surprised to find that your average ROAS isn’t as high as you thought. This happens when businesses are either running the wrong type of ad or not reaching their target audience properly. Here’s how you can create a stronger ad strategy by choosing the right ad type for your audience.
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Know Your Audience’s Preferred Platforms
Where does your target audience spend the most time online? Knowing this will help you choose more effective ad strategies that boost conversions. For example, you won’t benefit from investing heavily in Facebook static ads when most of your audience spends their evenings on YouTube or Instagram.
The medium matters, too. Is your audience more likely to enjoy video or static content? See which type of posts attract the most attention on you and your top competitors’ social media channels to get a better idea of where your audience is likely to be engaged the most.
A/B Test Ad Formats
You can increase ad performance through A/B testing. Run the same ad on the same platform in different formats, then compare their impressions, clickthroughs, and conversions. After repeating this process with your trial audience several times, you’ll be able to better understand what type of ads they prefer.
Use Analytics Wisely
Connect your ad metrics to key performance indicators (KPIs). This ensures that your ad performance aligns with relevant business goals. For example, if you set a CTR goal for the month, then you can leverage platform data to determine which channels are performing the best and deliver the best return on investment.
One of the biggest mistakes many marketers make is simply looking at analytics without factoring them into a bigger picture. But in order to be successful, ad metrics must be linked to greater goals that help shape the company’s profitability.
Collect Feedback
Perform surveys or focus groups to learn more about your audience. The more you understand the pain points of who you’re marketing to, the easier it becomes to craft ads that strike a chord. Feedback can be the most valuable tool for marketers running ads because it allows them to ask specific questions and receive more detailed responses.
Rather than just judging by performance alone, create focus groups or hold phone interviews that allow you to learn why your ads are or aren’t doing well.
Ad success is a combination of business objectives, metrics, testing, and audience awareness. By taking the time to truly understand its audience, a business can optimize its ad copy and marketing collateral to deliver more effective experiences to its ideal customers.