Which Bidding Strategy Should Use You if You Want to Increase Revenue from Your Ad Spend?

Which bidding strategy should use you if you want to increase revenue from your ad spend?

  • Target return on ads spend (ROAS)
  • Target cost-per-action (CPA)
  • Enhanced cost-per-click (ECPC)
  • Maximize clicks

Right Answer:

  • Target return on ads spend (ROAS)

Explanation:

Return of Investment (ROI) optimizes to a strategy while the ROAS optimizes to a tactic. But still, there are so many advertisers who use these interchangeably. ROI measures the profits which are generated by the ads relative to the cost of those ads. While ROI measures the gross revenue generated for every dollar spent on that ad campaign.

  • ROI = (profits-costs *100) / Costs
  • ROAS = Revenue from ad campaign / Cost of the ad campaign

ROI is a business-centric feature as the ROAS is always the advertiser-centric. ROI is most effective at measuring how ads contribute to an organization’s bottom line while the ROAS gauges the effectiveness of online advertising campaigns.

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