Hello, There are many messages I have seen on foreign sites and R10 related to the topic. I want to give you information based on my experiences.
Target ROAS (Return on Advertising Spend) = Revenue from advertising. Target EBM (Cost Per Engagement) = Cost per conversion.
Where to Use ROAS?
ROAS is better if your site is constantly making purchases and the returning customer rate is 20%, for example; license, e-pin, food, cream, etc. If you are selling products, you should prefer ROAS. Because customer acquisition is important, making a profit on the first time is not very important. Instead of keeping the ROAS ratio at 500%, I recommend keeping it between 80-120% and collecting the customer flow and lead.
Where to Use EBM?
EBM is generally recommended in sectors where the returning customer rate is 5%, where one-time sales are made. It is a measurement preferred in sectors where one-time sales are made. In these sectors, customers usually shop once and the probability of repurchase is low. Target EBM focuses on determining the cost of each conversion by dividing the advertising cost by the number of conversions. For example; phone case, charger, phone, technology, small household items.
I recommend that you keep your ad running for at least 3 months to determine the target ROAS and EBM ratio. Tests should be done on the Google Ads recommendation. I recommend those who do not add conversion value to add it to their sites with Tag Manager. However, this is only a general approach and the dynamics of each business and sector may differ. It is important to choose the most suitable measurement method by considering the specific situation of your business.
Google may initially bring a recommendation of 80-90% for ROAS. Apply the suggestion and look at your earnings. Then you can raise it above 100%, but I recommend not to raise it above 200%. If your goal is to collect customers, the ROAS level should definitely be around 100%. Rates above 200% bring less lead and less clicks.
The information in this article is based on my own experience.
Regards.
Target ROAS (Return on Advertising Spend) = Revenue from advertising. Target EBM (Cost Per Engagement) = Cost per conversion.
Where to Use ROAS?
ROAS is better if your site is constantly making purchases and the returning customer rate is 20%, for example; license, e-pin, food, cream, etc. If you are selling products, you should prefer ROAS. Because customer acquisition is important, making a profit on the first time is not very important. Instead of keeping the ROAS ratio at 500%, I recommend keeping it between 80-120% and collecting the customer flow and lead.
Where to Use EBM?
EBM is generally recommended in sectors where the returning customer rate is 5%, where one-time sales are made. It is a measurement preferred in sectors where one-time sales are made. In these sectors, customers usually shop once and the probability of repurchase is low. Target EBM focuses on determining the cost of each conversion by dividing the advertising cost by the number of conversions. For example; phone case, charger, phone, technology, small household items.
I recommend that you keep your ad running for at least 3 months to determine the target ROAS and EBM ratio. Tests should be done on the Google Ads recommendation. I recommend those who do not add conversion value to add it to their sites with Tag Manager. However, this is only a general approach and the dynamics of each business and sector may differ. It is important to choose the most suitable measurement method by considering the specific situation of your business.
Google may initially bring a recommendation of 80-90% for ROAS. Apply the suggestion and look at your earnings. Then you can raise it above 100%, but I recommend not to raise it above 200%. If your goal is to collect customers, the ROAS level should definitely be around 100%. Rates above 200% bring less lead and less clicks.
The information in this article is based on my own experience.
Regards.