Based on the data below, what is the return on ad spend (ROAS) for the campaign?
$2.50
$5
$7.50
$10
Explanation: Return on ad spend (ROAS) is a crucial metric that assesses the effectiveness of advertising campaigns by measuring the revenue generated for every dollar spent on advertising. To calculate ROAS, divide the revenue generated from the campaign by the cost of the campaign. In this scenario, the revenue generated by the campaign is $50,000, and the cost of the campaign is $10,000. Therefore, the ROAS can be calculated as $50,000 (revenue) divided by $10,000 (cost), resulting in an ROAS of $5. This means that for every dollar invested in the advertising campaign, the company earns $5 in revenue. A higher ROAS indicates that the advertising campaign is more effective in driving revenue relative to its cost, making it a key performance indicator for assessing the profitability and efficiency of marketing efforts. In this case, the ROAS of $5 signifies that the campaign is generating a strong return on investment, making it a successful and lucrative advertising initiative.
or
Based on the data below, what is the return on ad spend (ROAS) for the campaign?
- $3
- $4
- $5
- $6
Explanation:
The correct answer is **$6**. Return on ad spend (ROAS) is a metric used to evaluate the effectiveness of advertising campaigns by measuring the revenue generated for every dollar spent on advertising. It is calculated by dividing the total revenue generated from the campaign by the total advertising spend. In this case, the total revenue generated from the campaign is $120, and the total advertising spend is $20. Therefore, the ROAS can be calculated as follows: $120 (total revenue) / $20 (total ad spend) = $6. This means that for every dollar spent on advertising, the campaign generated $6 in revenue. A higher ROAS indicates better campaign performance and efficiency in generating revenue from advertising investments. Therefore, with an ROAS of $6, the campaign is deemed to be highly effective in driving returns and delivering a strong return on investment (ROI) for the advertiser.