With a recession on the horizon, nobody wants to waste their money on ads that don't generate the maximum possible amount of revenue. Return on ad spend (ROAS) is a marketing metric calculated by dividing an ad's total revenue generated by the ad's cost. That means the higher your ROAS, the more efficient your ads are.

There are a few different ways in which you can increase the ROAS of your advertising campaigns:

  • Reduce your advertising costs, so you can cut the number of ad dollars you spend while bringing in the same amount of revenue

  • Improve the conversion rate of your advertising campaigns so a more significant percentage of people who see your ad end up buying from you

  • Increase your revenue per conversion, so your customers spend more money in your online store.

In this article, we've compiled a selection of tactics that will help you to improve your ads, so they cost less, convert more people, and generate higher-value conversions. 

So, whether you're just starting out with paid ads or you've been running them for a while, be sure to read through this article and implement our recommendations. You're sure to see an improvement in your marketing campaigns and ROAS if you do!

To reduce your advertising spend...

If you're running Google Ads, one of your main goals is likely to reduce ad spend. This section will give you some tips on how to do just that.

Adjust your bidding strategy

One of the most important things to remember when bidding for keywords is that you should never set your bids too high. You might be tempted to max out your budget in order to get as many clicks as possible, but this can quickly eat into your profits and even cause you to lose money. Instead, it's usually better to set lower bids and increase them over time if necessary. This will help you to stay within budget while still getting enough traffic to make a profit.

You'll want to start by finding keywords that have a low average Cost Per Click (CPC) and a high click-through rate (CTR). This will ensure that you're not paying too much for each click but that you're still getting a good number of clicks.

Google's Smart Bidding system predicts the value of potential conversions. Set a target ROAS, and Google will automatically adjust the bid it makes depending on the value of the conversions. If the system calculates a searcher will likely bring a high-value conversion, it'll bid high. If it predicts a low-value conversion, it'll make a lower bid.

Work on your Quality Score

Another important factor that affects your ad costs is your Quality Score. This metric is calculated by Google based on a number of factors, including how relevant your ads are to users, the quality of your landing page, and the click-through rate (CTR) of your ads. A high Quality Score results in better visibility for your ad and a lower CPC. There are a few things you can do to improve your score, such as making sure all of your ads and landing pages are relevant to the audience your ads are targeting.

To improve the conversion rate of your advertising campaign...

Conversion rate is calculated by dividing the number of sales achieved by the total number of visitors to a site. This means that even a small increase in conversion rate can have a significant impact on revenue. Here are some tips for converting people who see your ads into customers.

Follow best practices for paid ads 

First of all, you want to make sure that your ad campaigns are set up for success. By making sure your ads are tailored to people who are a good fit for your business, you'll increase conversions and avoid wasting money advertising to people who'd never buy from you. Here are our best practices for paid ads.

  • Research your target audience. Understanding who your target audience is and what they're looking for will help you to craft a specific ad campaign to reach the right people.

  • Use negative keywords. To increase the effectiveness of your ads, use negative keywords to exclude irrelevant searches from being triggered.

  • Create compelling copy. Your ad copy should be clear, concise, and compelling to increase your chances of being clicked on.

  • Use remarketing campaigns. Remarketing allows you to target people who have already visited your site. This is a great way to increase ROAS since your ads will be shown to people who are already familiar with your brand and are more likely to convert.

Read Everything You Need to Know About Paid Ecommerce Ads

Focus on the most effective channels

Another effective strategy for increasing ROAS is to focus your ad spend on channels that have proven to be effective. To do this, you need to analyze your ROAS score for ads on different channels (for instance, search campaigns, Amazon ads, or different social media channels). This data will help you to identify the channels that are delivering the best results so that you can increase your budget for these channels and reduce spending on less effective channels.

Make your landing page and site conversion friendly

A landing page and website that are conversion-friendly provide a good user experience and make it easy for people to buy what you're selling. There are a few things you can do to make your pages more conversion-friendly, including using the right keywords and making your copy relevant and compelling. You'll also want to make sure your site is easy to navigate, with clear call-to-actions (CTAs) that lead people in the right direction.

Optimize your site for mobile

It's no secret that more and more people are using their mobile devices to access the internet. According to research in 2022, 60% of online shopping orders are made from smartphones, compared with only 38% on desktops. If your website isn't mobile-friendly, you're missing out on a lot of potential business.

A mobile-friendly website is one that is designed to look good and function well on mobile devices. It's easy to navigate, with buttons and links that are easy to tap, and the text is sized so that it's easy to read on a small screen. Check your ecommerce site with Google's free Mobile-Friendly Test

Reduce your cart abandonment rate

Cart abandonment is when a customer adds items to their shopping cart but then decides not to buy them. There are a few things you can do to reduce your cart abandonment rate, including using exit intent popups, providing free shipping, and making it easy for customers to checkout. 

Another way to reduce your cart abandonment rate is to focus on improving your website's speed. A slow-loading website can be frustrating for customers and can cause them to abandon their carts. You can improve your website's speed by optimizing your images, using a caching plugin, and disabling unnecessary plugins.

You can also improve your cart abandonment rate by providing more information about your products. Showcase customer reviews and ratings, provide detailed product descriptions, and list the ingredients of each product. This will help customers to make an informed decision and will increase the chances that they'll buy.

For more information about cart abandonment, check out our piece Decrease Shopping Cart Abandonment with These 5 Essential Strategies

To increase the value of conversions from your ad campaign…

As well as the number of people who convert from your ads, how much revenue those conversions bring in is also important for your ROAS. The best way to do this is to focus on increasing the average value of orders you receive. 

Increase your average order value 

The average order value (AOV) is the average amount a customer spends on each purchase. If you can increase the AOV, you'll see a corresponding increase in revenue and ROAS.

There are a few things you can do to encourage people to buy more products or higher-value products and increase your AOV:

  • Offer free shipping on orders over a certain amount

  • Add more high-priced items to your catalog

  • Create special offers and discounts for high-value items

  • Incentivize customers to buy more than one item at a time

Ecommerce growth in a changing landscape 

Calculating, tracking, and improving ROAS is important for ecommerce companies that care about growth. But, unfortunately, it's not all you need to worry about. To stay ahead of the competition, your ecommerce business needs to respond and adapt to new trends. Check out our guide: How to grow in 2023: 10 strategies for the evolving ecommerce landscape.