As a marketer, you live and breathe in an extremely competitive world, especially when it comes to consumer numbers and data. Therefore, when investing in paid search, you would want to constantly work on improving prominent metrics such as cost per conversion, click-through rate, and even quality score. As this will help you look at the bigger picture. That’s where Return on ad spend (ROAS) comes in. It will not only help you mirror the bigger picture, but also offer you incredible insights into the cause of lead conversions and the amount of revenue your conversion actions generate.
Here is a comprehensive guide on all you need to know about how to increase Google Ads ROAS.
But first…
What is ROAS?
Standing for return on ad spend, ROAS is an essential marketing metric that helps business owners to measure the amount of revenue they earn from every dollar spent on advertising. In the digital marketing world, ROAS is commonly equated to ROI (Return on Investment). In both metrics, the money you as a business spend on advertisements is considered an investment and is used to track returns.
Therefore, at the standard level, ROAS should be able to help you measure the effectiveness of your advertising efforts. In this case, if your ad messages connect well with your potential consumers, you should earn more revenue per each dollar spent on the ad. So, the higher your business ROAS, the better for you.
Additionally, ROAS allows you to measure its success at various levels through your Google Ads accounts. For instance, there is the ad group level, campaign level and so much more. The secret is knowing how much you are spending and earning from your ads, at each specific level.
Calculating ROAS
First, to calculate your ROAS, you need to track the conversion rates (the amount of revenue your business earns per a specific conversion) and the specific sales metrics. This shouldn’t be a problem because most paid search platforms allow you to track your sales and conversions. Once you get the total conversion value, divide it with the advertising costs to get your ROAS. As simple as that!
For example, if you spend $50 in ad spend and then end up selling one unit of a $300 product, your ROAS is 5. So, in this case, for each dollar you spend on advertising, you earn $6 back.
Ways to improve ROAS
When searching for ways to improve your ROAS, you need to break down the revenue generated into its underlying components, and then work on creating efficiencies at each level.
Generally, ROAS is a product of the following advertising elements:
- Revenue per conversion
- Online ad clicks
- Post-click conversions
So, you have to figure out how to tighten all the loose ends in each of the above elements if you want to earn a higher ROAS. But how? Through:
- Increasing revenue earned while maintaining the cost,
- Increasing your revenue as you lower the cost,
- Or lower the cost of ads for your PPC campaigns, while maintaining your revenue.
Below is how to achieve the above and increase Google Ads ROAS:
Improve Quality Score
The higher your ads’ quality score, the lower the cost per click (CPC), which also boasts a higher ad ranking. Also, the quality score corresponds with the lower cost per conversion.
Therefore, as you work on your campaign, remember its relevancy also determines the quality score of the keywords used. So, when working on improving the relevancy of your ads, ensure to work on their structure. For example, you can divide them into smaller well-organized groups, primarily connected with specific keywords. The keywords work to ensure your ads match the content within your website, to help you attract the most relevant visitors (those searching for the exact keywords of your products, services or content).
Narrow your Target Audience
When you spend time identifying and targeting the people who are likely to be interested in your content, services or products, you get to spend less and convert more.
While you might already be aware of your general target consumers, you should put more emphasis on narrowing your audience. Have their specific geographical location (country, region, city, zip code, etc.), job title, or the devices they use in mind. This will help you customize your Google ads to reach them most favorably, and avoid wasting money on clicks for audiences who wouldn’t be able to buy your products or services, due to geographical location restrictions.
While at it, take some time to come up with numerous audience personas that you want to target with your ads, and then develop ads for each specific target audience.
Remember, Ad relevance works hand in hand with the expected click-through rate, and the landing page experience to determine the ads’ quality score. And an improved quality score will help you lower your ad costs improving your ROAS.
Also, as you continue running your ads, you will have a record of people who already visited your site. So, in your future ads, you can consider retargeting these people and narrowing them down to specific site visitors to improve your conversion chances. The secret is writing a compelling copy to push them into taking a specific step.
Refine your Keywords
Keywords are a critical part of digital marketing. Therefore, implementing favorable keyword targeting is the best way to attract relevant visitors searching for your specific products or services. This way, you can be sure that a higher percentage of visitors coming to your site are ready to make a purchase.
For this, start by optimizing the keywords on each product page or the various landing pages. The aim is to work with long-tail keywords as they tend to attract the most traffic, which can lead to higher conversion rates.
If possible invest in PPC software to help you come up with the most efficient keywords. Also, there are numerous keyword discovery tools you can use online. As you do this, focus on discovering specific keywords, which are also less competitive. You get to buy them at a lower price, and won’t be competing with your competitors to get an audience. A double win!
Use Negative Keywords
Another trick for increasing your ROAS is working on lowering the cost of your ads. Take time to go through a search queries report and get a hold of the various keywords that are notorious for receiving clicks, but not leading to any conversions. Now, work on not paying for these keywords to increase your ROAS. After all, you don’t want to waste your money on keywords that are not earning. How?
Start by adding all these key terms to your negative keyword list to avoid any searches on them triggering your ad. So, you won’t have to pay for clicks that don’t convert.
Automate Bidding
When you use automated bidding for your Google ads, you put Google in control of your bidding, as opposed to when you’re manual bidding. Automate bidding will work best to ensure your ads achieve maximum results by automatically setting a bid, based on your ad’s likelihood to receive a conversion or click.
It’s the system that determines this likelihood and decides on the bid, by analyzing various user data such as their:
- Device
- Operating system
- Previous search history
- Location
- Demographics
- Browser,
- Data from previous campaigns among others.
This will help you place bids that are high enough to compete with the needs of qualified buyers, and less likely to be shown to people with no interest in what you have to offer.
Optimize your Ad Copy and Landing Page
Getting clicks to your site does not automatically mean they will turn into sales. To maximize the traffic your site gets, work on optimizing your user experience. Your site visitors should be able to navigate with ease from the moment they get into the landing page until they complete their transaction.
If you’re running multiple ads, ensure they each have a specific landing page to make things easier for the audience. The best landing page is one whose features and content reflect the content of the ad copy. So, if for instance, your landing page is running a 10% discount on a specific product, your ad copy should be optimized to feature the same.
Also, ensure you have a set process to help you re-engage visitors who didn’t finish their transactions.
Pro tip: Always ensure you A/B test your landing page for optimized content and conversion rate.
Optimize your Sales Process
Always take time to check what’s working and what’s not working with your current Google Ads advertisement strategy. If you already have a CRM, you will only need to log into the sales notes to check out the fine details.
Basically, you should pinpoint leaks, reduce your churn rate, align sales and marketing goals, shorten your sales circle, prioritize the highest-converting ads, and monitor the most valuable metrics.
Reduce your Monthly PPC Management Cost
A healthy monthly ROAS should ensure your ads generate enough income to cover the cost of the ads. Therefore, you should focus on ensuring the ads take care of their bills. However, being able to reduce your monthly PPC agency management costs (see our pricing here) will result in better profit margins and higher ROI.
So, aim at achieving higher profit margins to cut the management costs by choosing relevant ad campaign budgets, ad scheduling, and the pricing model.
Pro tip: Ensure you have a candid discussion with an Ad agency or expert concerning your goals, pricing models and budget to help your business achieve new heights.
CONCLUSION
Running a successful Google Ads campaign takes a lot of work and time and requires specialized paid search marketing expertise. It is therefore best to hire a Certified Google Ads Specialist to take care of things for you. With their skills, expertise and training, they can help you develop an efficient lead generation campaign that attract numerous customers to your business and ensure that your business grows by leaps and bounds.
Are you ready to take your business to the next level?
Hi, my name is Oleg Potemkin – the Founder of Digital Star Media – your premier Google Ads agency. I am certified Google Ads Specialist with 15+ years of digital marketing experience. I have been managing successful Google AdWords (now Google Ads) PPC campaigns since 2006. I personally generated thousands of leads across several industries.
We are offering Google Ads PPC management services to real estate, legal, medical, dentals and service businesses. I will setup, optimize and manage your Google Ads PPC campaign to generate quality leads. Contact me today at (808) 398-9987 to discuss how we can help you grow your business faster at reasonable cost.
