How to Maximize ROI in Advertising: Blended ROAS

The world of digital advertising has been growing exponentially in recent years, and with it, the need for effective metrics to measure the success of advertising campaigns. One such metric is Return on Ad Spend (ROAS), which is a key performance indicator used to measure the effectiveness of advertising campaigns.

However, as digital advertising has evolved, so has the complexity of advertising campaigns. Campaigns are no longer just focused on a single channel or ad type, but instead are often a mix of different channels and ad types. As a result, a more comprehensive metric is required to measure the overall effectiveness of a campaign. This is where blended ROAS comes in.

What is Blended ROAS?

Blended ROAS, or Return on Ad Spend, is a metric used in digital advertising to measure the effectiveness of ad campaigns. It takes into account all the different channels and types of ads used in a campaign and provides a comprehensive view of the overall performance of the campaign.

The calculation of blended ROAS is the ratio of the total revenue generated by an ad campaign to the total amount spent on that campaign. This metric is particularly useful for businesses that use multiple channels for their advertising as it allows them to compare the effectiveness of each channel and optimize their ad spend accordingly.

Blended ROAS provides a more complete picture of campaign performance compared to other ROAS metrics, which only measure the effectiveness of individual channels or ad types. For instance, a campaign may have a high ROAS on search ads but a low ROAS on display ads, which would not be reflected in a standard ROAS metric.

By taking into account all the different channels and types of ads used, blended ROAS helps businesses understand the profitability of their ad campaigns. It provides insight into the revenue generated by the campaign compared to the cost of running it. This information can be used to make informed decisions about where to allocate advertising budgets in the future, in order to maximize the return on investment.

Why is Blended ROAS Important?

Blended ROAS is important because it provides advertisers with a comprehensive view of the effectiveness of their entire advertising campaign, which is crucial in today’s multi-channel advertising landscape. With the increasing number of channels and ad types available to advertisers, it can be difficult to know where to allocate advertising budgets. Blended ROAS provides a way to compare the effectiveness of different channels and ad types, allowing advertisers to optimize their advertising spend and maximize their return on investment.

Blended ROAS can also help advertisers understand the profitability of their advertising campaigns. By providing insight into the revenue generated by a campaign compared to the cost of running it, advertisers can make informed decisions about where to allocate advertising budgets in the future. This can help to increase overall profitability and ensure that advertising budgets are being used effectively.

Example of Blended ROAS

To better understand how blended ROAS works, let’s look at an example. Imagine that an advertiser runs a campaign that includes search ads, display ads, and social media ads. The campaign costs INR 10,000 in total, and generates INR 50,000 in revenue. To calculate the blended ROAS, we would divide the total revenue by the total cost of the campaign: 

Blended ROAS = Total Revenue / Total Cost

Blended ROAS = INR 50,000 / INR 10,000

Blended ROAS = 5

In this case, the blended ROAS for the campaign is 5, which means that for every dollar spent on the campaign, the advertiser generated INR 5 in revenue. Th is provides a comprehensive view of the overall effectiveness of the campaign, taking into account all channels and ad types used. 

Benefits of Blended ROAS

There are several benefits of using blended ROAS to measure the effectiveness of advertising campaigns:

Provides a comprehensive view of campaign performance: Blended ROAS takes into account all channels and ad types used in a campaign, providing a more complete picture of campaign performance compared to other ROAS metrics.

Provides a comprehensive view of campaign performance: Blended ROAS takes into account all channels and ad types used in a campaign 

Allows for optimization of advertising spend: By comparing the effectiveness of different channels and ad types, advertisers can optimize their advertising spend to maximize their return on investment.

Helps to increase profitability: By understanding the revenue generated by a campaign compared to the cost of running it, advertisers can make informed decisions about where to allocate advertising budgets in the future, increasing overall profitability.

Helps to identify areas for improvement: Blended ROAS can also help to identify areas where a campaign may be underperforming. For example, if the blended ROAS for a campaign is lower than expected, advertisers can look at the performance of individual channels and ad types to identify areas for improvement.

Provides a more accurate picture of campaign success: Blended ROAS provides a more accurate picture of campaign success compared to other metrics, such as click-through rates or impressions. These metrics may provide an indication of engagement with ads, but they do not take into account the revenue generated by a campaign. 

How to leverage Velocity Insights? 

Comprehensive View: Velocity Insights provides a comprehensive view of campaign performance, taking into account all channels and ad types used in a campaign. This makes it easier to compare the effectiveness of different channels and ad types, allowing advertisers to optimize their advertising spend and maximize their return on investment.

Identify Areas for Improvement: Velocity Insights can help advertisers identify areas for improvement in their advertising campaigns. By analyzing real-time data on campaign performance, advertisers can identify channels and ad types that are underperforming and make changes to improve campaign effectiveness.

Stay Ahead of Competition: Velocity Insights offers business reports that provide a valuable resource for data-driven decision-making and staying ahead in the competitive landscape. By utilizing these reports to identify areas of improvement and making changes to their strategy accordingly, businesses can achieve their objectives and sustain long-term growth.

Industry Benchmarks Reports: Industry benchmark reports provide valuable data-driven insights into the performance of businesses in a particular industry. These reports can help companies understand where they stand relative to their competitors and identify areas for improvement. By analyzing industry benchmarks, businesses can make informed decisions on how to optimize their operations and improve their bottom line.

Challenges with Blended ROAS

While blended ROAS is a valuable metric for measuring the effectiveness of advertising campaigns, there are some challenges to consider:

Requires accurate tracking: In order to accurately calculate blended ROAS, it is important to have accurate tracking in place for all channels and ad types used in a campaign. This can be challenging, particularly if different tracking systems are used for different channels.

Difficult to compare across campaigns: Blended ROAS can be difficult to compare across different campaigns, as the effectiveness of different channels and ad types may vary depending on the campaign objectives and target audience.

May not account for long-term effects: Blended ROAS only measures the revenue generated during the duration of a campaign, and may not account for the long-term effects of advertising on customer behavior and brand awareness.

Conclusion

Blended ROAS is a valuable metric for measuring the effectiveness of advertising campaigns in today’s multi-channel advertising landscape. It provides a comprehensive view of campaign performance, allowing advertisers to optimize their advertising spend and increase profitability. While there are some challenges to consider when using blended ROAS, it is a powerful tool for advertisers looking to get the most out of their advertising campaigns.

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