Blended ROAS
Blended ROAS is a metric that provides insight into the total return of all ad spending combined. Blended ROAS thus looks at total revenue and total ad spend. This metric can be used across different channels such as social media, search engines and email campaigns to get an overview of how effectively the entire marketing budget is being used.
Calculating ROAS
The formula for blended ROAS is:
Blended ROAS = Total revenue / Total advertising costs
Suppose a company spends €10,000 on various ads and generates €50,000 in sales from them. The blended ROAS is then 5. This means that for every euro spent on ads, the company generates €5 in sales. It gives an overall view of the performance of all marketing ads combined.
The importance of the blended ROAS
Blended ROAS provides insight into the performance of marketing efforts by analyzing all campaigns and channels together. This is valuable in a marketing mix that includes channels such as social media, search engines and email campaigns. It shows how costs relate to revenue and gives companies a complete overview. This insight helps in making targeted choices, strategizing budgets and optimizing the overall marketing strategy.
What is a good Blended ROAS?
As with standard ROAS, a good blended ROAS depends on a company's margins and cost structure. Companies with high profit margins can often be profitable with a lower blended ROAS. Companies with low margins require a higher blended ROAS to remain profitable. Setting a benchmark helps monitor and improve performance.
