Achieving the standard ROAS benchmark in Google Ads is great, but surpassing this benchmark is even better and ultimately should be your goal.
What is ROAS? Return on Ad Spend (ROAS) is a marketing metric that measures revenue earned for each dollar you spend on advertising. You gain insights on the effectiveness of your advertising by calculating and tracking ROAS.
A good ROAS for Google Ads typically falls within the range of anything above 400%, equivalent to a 4:1 return. To put it plainly, for every dollar you invest in advertising, you anticipate a return of $4.
Exceeding this industry average is an outstanding accomplishment. If your campaign is yielding a return greater than 4:1, you're ahead of the game!
The Why
Paid advertising is an integral part of any business in order to get to the next level. This particular home improvement company had been primarily generating sales from their organic search traffic, which is great, but they had everything in place from an operation standpoint to handle more.
Previously, they ran Google Ads with another agency which worked in the beginning but then dropped off to the point where they were barely breaking even within a few months. This is actually very typical and if it has happened to you or is currently happening to you, then you are not with the right person or agency. It's a basic and essential practice to always keep your ads evolving so they don't become stagnant. Testing which ads get the most traffic and convert the best is the name of the game. If you take the set it and forget approach, you will most likely fail and lose your hard earned money.
The Results
We were able to get them an average ROAS of 7.8 through the course of the first 6 months.
The How
One strategy we like to utilize right out of the gate is to monitor the competition. In this instance, we reviewed their competitor's Google Ads and found that there were similar ad characteristics from competitor to competitor. When you see this, then there is a good chance the competition has already tested these ads and know that they are profitable. By doing this, we were able to get a good base of Ad campaigns in place that gave this home improvement company a 5x return on ad spend in the first month. From there we continued to test and evolve those same ads as well as new ads which allowed us to achieve a ROAS as high as 13x in a single month for an average of 7.8 over the course of 6 months.