No matter what your budget is, it's more limited than you'd like. And that means it's important to deliver video ads with pinpoint precision so you're not wasting ad spend on viewers outside of the narrow confines of your target market or the ad's optimal position along a buyer's journey.
There are numerous tools and technologies to help you access the raw data surrounding online video ads and the analyzed metrics to show what's going on with a bit more clarity. But developing the proper framework for using those numbers and making the right next move is a constant challenge. According to the good's overview of ROAS:
"Not knowing whether you're turning a profit, how much your paid traffic is costing you, or how much the average shopper is spending on your site per visit is like hitting the 'self-destruct' button on your business.
"Don't do it."
In this article, we'll take a closer look at ROAS — or Return on Ad Spend — and its relationship to CTV and attribution tracking.
What is roas?
ROAS is calculated to measure the effectiveness of each ad relative to its cost — in other words, how much value you're getting for your advertising. The basic formula is:
[profit from advertising] divided by [cost of advertising]
So, if you spend $1,000 on your video ad campaign and that generates $2,000 in sales, your ROAS is 2. Having a ROAS greater than 1 indicates a successful advertising campaign. Having a ROAS less than 1 indicates that it either wasn't successful or the real answer is more complicated.
how is roas different from roi?
Some people confuse ROAS with ROI (return on investment). While both numbers are important, it's just as important to understand the difference between the two. ROAS measures the value per dollar of ad spend, whereas ROI measures the profit per dollar of ad spend. Here's its formula:
ROI = (profit/ad spend) * 100, as ROI is a percentage.
Profit is different from value, as it's value minus cost. So the ROI on the example mentioned earlier would be 100%.
roas and ctv advertising
When ROAS is properly calculated, it tells you the value of your ad campaigns. You can determine which campaigns have the highest ROAS, which ones have the lowest ROAS (especially when testing new video styles), and which ones are losing effectiveness.
However, definitely tying revenue growth back to one CTV ad impression is difficult for multiple reasons:
- CTV/OTT advertising is a top-of-funnel tactic, making it difficult to track once someone has entered the funnel
- Successful CTV/OTT advertising often results in a conversion through another channel — i.e. via a landing page or at a physical location — potentially creating confusion in terms of ROAS.
Still, measuring the effectiveness of your CTV/OTT campaign in terms of profit is crucial. Video ad costs are more expensive than many other forms of advertising, in part because they're so effective when aimed well. If you're devoting dollars to views that simply aren't a good investment, you need to know.
So, what are you to do as an advertiser?
attribution tracking: The missing link
When you want to track ROAS on CTV advertising campaigns, you have to be able to understand a viewer’s actions after watching that ad. In other words, you have to be able to attribute their later purchase to a series of actions they completed after viewing an ad.
Enter attribution tracking. This is the missing link between ROAS and CTV campaigns. Attribution tracking allows you to succinctly measure which campaigns are producing the most beneficial results and have the data to back it up.
A tool like Strategus’ Attribution Suite has the ability to track eight distinct metrics that follow a target’s actions after viewing an ad:
- Website visit
- Online purchase
- Amazon online purchase
- Foot traffic
- After-ad influence
- CPG purchase
- Offline conversion
- Brand lift
With identifiable data to track, it becomes easier to measure ROAS as it relates to CTV campaigns.
tips to improve the effectiveness of your ott/ctv campaigns
Effective OTT/CTV campaigns can inversely lead to improved ROAS. Follow these three tips to make your OTT/CTV campaigns more successful.
1. properly target your audience
Know who you're speaking to when you're promoting your brand on OTT/CTV platforms. Online streaming services are an opportunity for very fine-tuned control over who sees your ads, when they see them, and how often they see them. But if you don't know what viewership should look like, you can't make it happen. Before you start spending, identify these key areas to form a buyer persona:
- Daily struggles and pain points
- How your product or service helps them solve problems or accomplish goals
- Viewing preferences
2. utilize omnichannel marketing tactics
It may seem paradoxical, but fine-tuning your marketing outside of OTT/CTV can help improve your video marketing, too. That's where our Encore Omnichannel campaign enhancer comes in. Once a viewer finishes watching your video ad, they might not immediately be moved to make a purchase. Our platform can retarget them with well-timed ads and calls to action across all of their devices so you gain familiarity and stay top of mind.
When your messages are consistent across different platforms that your target market engages with, your solutions become more appealing. This can boost your ROAS even though it incorporates multiple different channels.
3. optimize your landing pages
The landing pages your ads direct traffic to are just as important as the ads themselves. Landing pages that don't reflect the initial video ad or retargeting calls to action can make visitors leave and cause a high bounce rate.
Create a wide collection of landing pages so that each delivers a perfectly aligned message, resource, and result that your audiences expect based on the messages they've received. Each landing page should extend the interaction, not create a new one or diverge off course.
When you optimize these three steps in your marketing projects, you can see a significant uptick in ROAS. Not only will your ads be better matched to your preferred viewers, but the subsequent interactions and visits to your landing pages will be more persuasive.
give roas the attention it deserves with strategus
Using the right lens to view your marketing data is the only way to gain true insight into which ads are performing well. Understanding the connection between ROAS, CTV campaigns, and attribution tracking can also help you identify which steps you should take to increase ad effectiveness and overall sales.
At Strategus, we provide our clients with the dashboards and resources they need for better insight into OTT/CTV ad campaigns. Contact us today to learn more about our tools.
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