Marketers are consistently faced with the same problem: how do you measure the success of certain content? Although marketers have developed metrics to define immediate success of a native advertisement campaign, such as reach and impressions, measuring financial effects on the bottom line continues to be an obstacle.
According to a HubSpot survey, 30% of marketers stated that providing financial returns on their marketing efforts was a constant problem. Although metrics do exist, marketers always ask themselves if there are more accurate ways to measure success. How can you precisely quantify what brand awareness and engagement will do for your brand?
Marketers are now suggesting to ditch the traditional concept of ROI and adopt ROAS – return on advertising spend. They suggest that ROAS is much more accurate in predicting the success of a native advertisement campaign, as the goal of such a campaign is to increase awareness rather than directly change a company’s bottom line. ROAS calculates revenue generated from every advertising dollar spent and relates it to a specific channel.
Although marketers developed this ROAS formula, they were still faced with a challenge: how can we optimize our spend on customer acquisition? To answer this question, they’ve developed the formulas displayed below:
*LTV represents a customers’ numeric lifetime value
Although there will probably never be a hard formula that is completely accurate for measuring native advertisement efforts, the development of the ROAS is still a giant leap forward. Now marketers can become even more precise, and potentially redefine the entire industry.
Sources:
http://digiday.com/sponsored/stackadapttt-005-628-638-solving-the-native-advertising-conundrum-how-to-measure-success/