ROAS - When to pull the plug

What is your target ROAS number?

[kris]

We are reassessing our PPC marketing efforts and are trying to streamline some of our campaigns. I have been given the task of coming up with a rock bottom ROAS number for upper management. We are going to run our campaign a while and lose keywords that do not perform at this number. I know this will vary greatly from industry to industry but here is my question:

What is your Target ROAS?

What is branding worth? What do you do if you are getting a lot of really cheap clicks, millions of impressions but not many sales? Is it worth it to just be there?

What is your take? What is your break-even point?

[Robsp]

Kris,

This is impossible to compare from one campaign to another as all represent different products, business models and strategies.

What you need to take into consideration though is how accurate your measurements are. On e.g. Adwords not all conversions are reported. In some markets (adult being one) a lot of customers surf at their jobs and then buy on your site, making them difficult to trace and last but not least take the life time value in consideration (how much more sales do aquired customers bring in after their initial sale).

My 2cts

[cnoonan]

How extensive have you researched keyword performance and analysis? Are you sure you have the right titles and descriptions for your product or service.

If so, then from my experience you need to test different ads to try and increase your CTR. What is your average position for your ads? Are your ads in the top three? Are you using google, overture and others?

There are many reasons why people are not clicking, you need to do a little more research on what people are looking for as it pertains to your product/service and then test & refine and the leads and conversions will follow.

How are you tracking conversions? What type of analytics software are you using? Are you sure it is not a reporting issue?

You are getting millions of impressions? What is your click through rate?

[MrSniffles]

My ROAS goal (I only handle internet advertising) is 10:1. My employer is in the B2C space and the lifetime value of customers is negligible. If the company were internet only, 3:1 would be breakeven, but that is purely academic. 10:1 is achievable, but it often means narrowing advertising terms to either the niche we serve or to a very product specific cluster of words.

As per your problem, I would recommend proposing a budget amount with a goal ROAS ratio. Sales are all that counts, and I've found that the broader your keywords, the more susceptible you are to click fraud. So try pruning back some keywords and maybe turning off content match and see if you can reduce unwanted impressions and clicks.