ROAS vs. ROMI: And Which Is Better for Your Online Marketing Strategy

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ROAS vs. ROMIWhich Is Better Online Marketing
Strategy

• Measure, Understand, Control and Improve are the
  four simple steps for every marketing campaign
  has to go through to reach its goals.
• Measuring the effectiveness of your online
  marketing campaign is the first step towards
  optimizing it to reach your online marketing
  goals. Everything starts with establishing the
  right performance indicators to make sense of the
  analytics data, thus judge the performance of the
  campaign and then finally make necessary tweaks
  to improve the campaign.
• So you are spending your dollars on ad campaigns
  and want to measure your ROI, how would you go
  about it? Two ways ROAS ROMI.

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What is ROAS?

• Return on Advertising Spend is the simplest way
  to measure how much a campaign has earned it for
  you. It is the revenue you scored for every
  dollar you spent on your ads. For example, you
  spent ? 10,000 for your Twitter ads of your
  Fountain Pen which generated youre a revenue of
  ? 50,000 through sales.ROAS Return on
  Advertising Spend  50,000/10,000 5According
  to ROAS, you have netted 5 times your marketing
  investment i.e. for every one dollar on your ad
  spend you have netted 5 dollars.Simple math,
  but that is what makes ROAS, a tad banal approach
  to calculate the returns. ROAS only takes your ad
  spend into your accounts and conveniently
  neglects all the other costs that are incurred to
  make the ads creatives and other resources. ROAS
  looks good on paper but it only gives a contrived
  picture of your returns. It can boost up your
  return figures while in reality, the picture may
  not be the same.

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What is ROMI?

• Return on Marketing Investment as the name
  suggests taking the entire marketing spend of the
  campaign to calculate the returns on your
  marketing efforts. Taking a similar example of
  Fountain Pens the investment in ROMI takes
  amount spent of each and every process that went
  into creating and executing the ad campaign
  creatives, ad agency fees, discount offers and
  then cost of ads. For example, assume that all
  the expenses amount to 25,000 thenROMI Return
  on Marketing Investment  50,000/25000 2So
  according to ROMI, for every one dollar of
  marketing investment, you have netted 2 dollars,
  a better and accurate picture isnt it? Sometimes
  ROMI is calculated by taking the cost of goods
  sold into the account giving an even better
  picture of your marketing efforts on your total
  profit.

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ROAS vs ROMI Which is better?

• While ROAS gives the complete credit to the ads
  ignoring the total costs, ROMI takes everything
  into account to give you a better picture to
  measure the effectiveness of your marketing
  campaigns. ROAS gives a bloated picture of your
  returns that could misdirect you over time
  without giving a reality check. Measuring is all
  about analysing the data carefully and ROMI is
  better equipped to help you adequately measure
  the effectiveness of your campaign.
• In addition to offering one of Best PPC Services
  in Hyderabad, at Samskriti Business Solutions we
  help all our clients understand the return of
  investment on all our ad campaigns to give them a
  better understanding of the returns on their
  marketing budget, that way we make right
  recommendations that help their reach their
  marketing goals. If you are looking for Best
  Online Marketing Agency in Hyderabad to help you
  with your end-to-end marketing services.

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