Showing ROAS

- [Narrator] Marketers talk about ROI,…return on investment, all the time,…but it's the wrong metric to use in data visualization.…We need to talk about ROAS, that's return on ad spend.…See, ROI is net profit versus investment.…That's total investment; time spent, cost,…whatever else went into producing that ad…and putting it out there, and actual profit,…the net money earned from transactions that involve that ad.…ROAS is ad spend divided by cost.…

We do have access to ad spend and hopefully to revenue data,…so this statistic makes more sense.…In most reports,…ROAS is the most important information you can provide.…It explains campaign performance at the most basic level.…So always put ROAS in context.…Don't show ROAS as a single line,…then it's taken out of context.…This looks atrocious.…ROAS is dropping.…You are fired if this is what you show someone.…But remember, ROAS is revenue divided by cost.…

Put it in context by showing both of those metrics as well.…Ah ha, suddenly this makes more sense.…ROAS dropped but look at revenue, it went shooting up.…