Explaining: Return On Ad Spend

🤖 This post is part of our collection of AI-generated podcast resources helping you learn how to market & grow your show.

Return on ad spend (ROAS) is a metric that measures the efficiency of advertising campaigns by calculating the revenue generated from advertising compared to the cost of the advertising.

In the context of growing a podcast, ROAS can be a useful metric for understanding the effectiveness of advertising campaigns and determining the value of different acquisition channels.

Here’s a more detailed explanation of ROAS and how it applies to growing a podcast.

How is Return On Ad Spend Calculated?

ROAS is calculated by dividing the revenue generated from advertising by the cost of the advertising.

For example, if a podcast spends $100 on advertising and generates $500 in revenue from the advertising, the ROAS would be 500/100, or 5.

This means that for every $1 the podcast spends on advertising, it generates $5 in revenue.

Why is Return On Ad Spend important?

ROAS is important because it helps a podcast understand the efficiency of its advertising campaigns and the value of different acquisition channels.

By calculating the ROAS of different advertising campaigns, a podcast can determine which campaigns are the most effective and which channels are providing the most value.

How Can Return On Ad Spend Be Used to Grow a Podcast?

ROAS can be used to grow a podcast in several ways.

First, by calculating the ROAS of different advertising campaigns, a podcast can determine which campaigns are the most effective and allocate its advertising budget accordingly.

For example, if a podcast finds that its advertising on Facebook has a higher ROAS than its advertising on Instagram, it may choose to allocate more of its budget to Facebook advertising.

Second, by calculating the ROAS of different acquisition channels, a podcast can determine which channels are providing the most value and focus its marketing efforts on those channels.

For example, if a podcast finds that its email list has a higher ROAS than its social media following, it may choose to focus more on building its email list and less on building its social media following.

Finally, by setting ROAS targets, a podcast can measure the effectiveness of its marketing efforts and identify areas for improvement.

For example, if a podcast sets a ROAS target of 3, it can track the ROAS of its advertising campaigns and identify campaigns that are not meeting this target, and adjust its marketing efforts accordingly.

In summary, ROAS is a useful metric for understanding the efficiency of advertising campaigns and the value of different acquisition channels.

By calculating the ROAS of different campaigns and channels, a podcast can determine which campaigns and channels are the most effective and allocate its marketing efforts accordingly.

By setting ROAS targets, a podcast can measure the effectiveness of its marketing efforts and identify areas for improvement.

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