In the world of e-commerce, measuring the success of your marketing efforts is crucial for driving growth and profitability. One key metric that has gained popularity in recent years is Blended ROAS, or “Return on Ad Spend.”
Blended ROAS offers a more accurate measurement of marketing performance compared to traditional ROAS, as they factor in the impact of multiple marketing channels and touchpoints.
In this article, we will explore the benefits of using Blended ROAS for e-commerce businesses, how to calculate it, and how to incorporate them into your marketing strategy to improve performance and optimize spend.
What is Blended ROAS?
Blended ROAS, or “Return on Ad Spend,” is a metric that takes into account the impact of multiple marketing channels and touchpoints on the overall customer journey. Unlike traditional ROAS, which only factors in the direct revenue generated from an ad campaign, it offers a more comprehensive measurement of marketing performance.
Blended ROAS can be calculated by combining the revenue generated from all marketing channels and touchpoints, and dividing it by the total ad spend across those channels. This provides a more accurate picture of the true value of your marketing efforts and enables you to make more informed decisions about how to allocate your marketing budget.
By factoring in different marketing channels and touchpoints, it provides insights into the effectiveness of your entire marketing strategy, rather than just individual campaigns or channels. This can help you identify which channels and touchpoints are generating the highest returns, and optimize your marketing spend accordingly.
The Benefits of Using Blended ROAs for E-commerce Businesses
Blended ROAS provides a more comprehensive and accurate measurement of marketing performance compared to traditional ROAS. By factoring in different marketing channels and touchpoints, Blended ROAS offer a more complete view of the entire customer journey, and helps you understand the impact of your marketing efforts on the overall buying experience.
Here are some of the key benefits of using Blended ROAS for e-commerce businesses:
- Provides a more accurate measurement of marketing performance Blended ROAS takes into account the revenue generated from all marketing channels and touchpoints, providing a more accurate picture of the true value of your marketing efforts. This enables you to make more informed decisions about how to allocate your marketing budget and optimize your spending for maximum ROI.
- Offers insights into the effectiveness of your entire marketing strategy By measuring the impact of all marketing channels and touchpoints, Blended ROAS provides insights into the effectiveness of your entire marketing strategy. This can help you identify which channels and touchpoints are generating the highest returns, and optimize your marketing spend accordingly.
- Enables you to make more informed decisions about marketing spend With a clearer picture of the true value of your marketing efforts, you can make more informed decisions about how to allocate your marketing budget. This can help you optimize your spending for maximum ROI, and ensure that you’re investing in the channels and touchpoints that are generating the highest returns.
- Helps you identify which channels and touchpoints generate the highest returns By factoring in the impact of all marketing channels and touchpoints, Blended ROAS can help you identify which channels and touchpoints are generating the highest returns. This enables you to focus your marketing efforts on the most effective channels and touchpoints, and optimize your spend accordingly.
- Allows you to optimize your marketing budget for maximum ROI By providing a more accurate measurement of marketing performance, and insights into the effectiveness of your entire marketing strategy, Blended ROAS can help you optimize your marketing budget for maximum ROI. This can help you drive growth and profitability, and ensure that your marketing efforts are delivering the best possible results.
How to Calculate Blended ROAS
Calculating Blended ROAS involves assigning values to different marketing touchpoints and channels to determine their impact on revenue generation. The process typically involves the following steps:
- Determine attribution models: Attribution models refer to the rules used to assign credit to different marketing touchpoints. There are several types of attribution models, including first-touch (giving credit to the first touchpoint a customer interacts with), last-touch (giving credit to the last touchpoint before a conversion), and multi-touch (assigning credit to multiple touchpoints that led to a conversion).
- Assign values to touchpoints: Once the attribution model is determined, values must be assigned to each touchpoint based on their impact on revenue generation. For example, a touchpoint that directly leads to a sale may have a higher value than one that simply increases brand awareness.
- Calculate Blended ROAS: Blended ROAS can be calculated by dividing the total revenue generated by the total advertising spend across all channels and touchpoints. This calculation provides a more accurate measurement of marketing performance compared to traditional ROAS.
To ensure accurate and effective Blended ROAS calculation, it is important to follow best practices such as setting clear goals, selecting the appropriate attribution model for your business, and using reliable data sources. Additionally, ongoing monitoring and analysis can help identify areas for improvement and optimize spend across channels.
Implementing Blended ROAS in Your Marketing Strategy
Blended ROAS can be a powerful tool in optimizing your marketing spend and improving overall performance. To implement Blended ROAS in your marketing strategy, you should follow these steps:
- Set clear goals: Determine what you want to achieve with your marketing efforts and identify the metrics that will help you measure success.
- Select attribution models: Choose the attribution models that best fit your business and marketing strategy. There are several models to choose from, including first-click, last-click, and multi-touch.
- Assign values to touchpoints: Assign values to each touchpoint based on their impact on the customer journey. This can be done using a formula or a software tool.
- Track performance: Monitor the performance of your campaigns regularly and adjust your strategy as needed based on your Blended ROAS data.
Successful marketing strategies that have implemented Blended ROAS include optimizing ad spend across channels and improving customer segmentation to target the most profitable customers.
By incorporating Blended ROAS into your marketing strategy, you can gain a better understanding of the impact of your marketing efforts across channels and touchpoints, and make data-driven decisions to optimize your spending and drive growth.
Implementing Blended ROAS in Your Marketing Strategy
Blended ROAS is a game-changing metric for e-commerce businesses looking to optimize their marketing performance and increase profitability. By factoring in the impact of multiple marketing channels and touchpoints, it provides a more accurate measurement of marketing success compared to traditional ROAS.
Implementing Blended ROAS into your marketing strategy may seem daunting, but the benefits are well worth the effort. Using this metric, you can optimize spending across channels, track performance more accurately, and ultimately drive growth and profitability for your e-commerce business.
Consider implementing this metric in your own marketing strategies. Reach out to us at Mapplinks for assistance with implementation and optimization.
