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Playbook: Return on Ad Spend

ROAS

How to Report on Which Paid Advertisements Drive Pipeline and Revenue

A Return on Ad Spend (ROAS) report helps marketers understand which paid advertisements drive the most revenue for their investments. In other words, it enables marketers to make data-driven decisions about what paid advertising platforms are the most efficient in driving revenue for the business and, in turn, where to focus their investments.

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Why You'd Use This Report

Marketers use ROAS reports when the goal is to determine which advertising channels they should spend their marketing dollars on in order to deliver the highest quality accounts to their sales team, resulting in higher quality deals with more revenue attached.

WHO THIS is valuable for
  • Demand Generation and Digital Marketing teams
  • Marketing Ops
  • Marketing Analysts
  • VPs of Marketing / CMOs
DATA You Need
  • Paid Advertising Spend
  • Paid Advertising Performance (Impressions, Clicks, Conversions)
  • Opportunities and Pipeline Created (Closed Won)
  • Time Frame (based on touchpoint)
data sources required
  • Paid Advertising Channels (Paid Search, Paid Social, Syndication, etc)
  • Marketing Automation Platform (Marketo, Hubspot, Eloqua, Pardot, etc)
  • CRM (Salesforce, SAP, etc)
  • Web Analytics
  • Analytics JS

Key Characteristics of a ROAS Report

1. Tie Ad Performance All the Way to Pipeline and Revenue

It's no longer good enough to report on ad performance only on top of funnel metrics like impressions and clicks. Or even conversions. As marketers, we need to be able to show how our ad spend is impacting the business - pipeline and revenue. Often times, ads are one of the larger discretionary line items in a digital marketing budget. Ensure you're making the most use of what's actually turning into dollars, not clicks.

2. Ensure Ad Performance Gets Credit Throughout the Entire Buyer Journey

In a traditional marketing funnel, ads often got "credit" at the very top. In other words, when a new lead was created from an ad our first touch attribution models gave proper credit. With the introduction of retargeting (generally between the lead and MQL stage) marketers moved to tracking ads across the first half of the journey.

But, at CaliberMind we encourage marketers to measure it across the entire buyer journey. Take it beyond the MQL stage. Take it beyond the individual lead and see how your ads are impacting the entire account. Think about it -- your ads could be impacting other personas and contacts at the organization and unless you have a mechanism in place to understand this metric, you'll be flying blind and won't have the optimal mix in place.

3. Move Beyond CPC / CPL to CPO and CPR

Related to the first point above, be sure to calculate how effective you are in creating opportunities and ultimately -- revenue. The calculation is pretty straight forward -- for example with opps -- your ad spend divided by the number of opportunities. But we encourage you to get more granular and play around with different data points. Try running it at the campaign level. Try running it at different opportunity stage. Then tie it back to your budget with what you're willing to spend to acquire a customer (CAC). If you're cost per is low (farther in the funnel) and you have a channel / campaign working -- you'll know where to spend to get the results you're looking for.

Here's an example of a simple ROAS report we use at CaliberMind:

ROAS

Ready to dig deeper and learn how CaliberMind's CDP makes ROAS reporting easier than ever before? Check it out.

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