ROAS vs. ROI: Painting the Right Picture

Return on ad spend, or ROAS, is used to calculate the revenue made by advertising, while taking the actual cost of advertising into account. It might seem straightforward, but it’s a hotly discussed metric these days—and for good reason. Knowing what does and doesn’t work in an advertising campaign provides insight that can have huge implications for marketing strategy.

Knowledge, as they say, is power—and having a clear understanding of return on investment (ROI) and ROAS can make all the difference.

Mapping Measurements

Let’s take a deeper look: Although often mistaken for the same thing, ROI and ROAS are very distinct metrics. “Return on investment calculates how ads contribute to an organization’s bottom line, while return on ad spend is a media-centric metric that measures the effectiveness of advertising campaigns,” says Walt Horstman, senior vice president and general manager of analytics and advertising at TiVo.

Read the full article at Videa Blog.

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