ROAS: What It is and Is Not
About this episode
This episode discusses the concept of ROAS and its implications for direct response advertising and brand management.
Direct response ads are written to take the customer from Attention to Interest to Desire to Action in a single encounter. Direct marketers have a product or a service to sell. They don’t have a brand to protect. This is why ROAS is the perfect analytical tool for them. ROAS is the acronym for Return On Ad Spend. In other words, it is the Return On Investment of your ad budget. You can: measure lead generation with ROAS. compare the effectiveness of media with ROAS. track sales attribution with ROAS. But you will never build a brand with ROAS. In fact, the measurement of ROAS will always – without exception – lead to the disintegration of your brand. Here’s why: To produce an impressive result in a short period of time, your ad must contain a degree of urgency. Urgency is not sustainable, nor is it scalable. The longer you run urgent ads, the less well they work. ROAS always looks great on paper for about a year, sometimes even 18 months. But then the wheels fall off and you can never put those wheels back on again. Your brand will never be more than a shadow of its former self. Consider this: A successful Going Out of Business sale is simply a massive extraction of the stored…
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