Understanding Your Amazon Return On Ad Spend (ROAS)

August 10, 2020

Amazon continually rolls out new products, features and services that sellers can – and should – use to fuel brand growth on the Amazon platform. As an industry leader, ZQUARED is positioned to be on the cutting edge of utilizing and leveraging available tools to their full potential in support of our Brand Partners. 

As Amazon experts, we share information about these tools in several ways:

• We show our Brand Partners how we use the tools Amazon makes available to us  
• We educate our Brand Partners on what’s new in the Amazon space
• We explain how we leverage and utilize new tools and features on their behalf

Our Brand Partners don’t have to stay in the loop on the best ways to maximize the Amazon platform – that’s our role. As Amazon experts with more than a decade of experience and proven results, ZQUARED determines the best way for each brand to strategically take advantage of Amazon’s tools. Leveraging our expertise allows our Brand Partners to focus on the bigger picture of growing across all channels knowing we are maximizing their potential on Amazon.

Amazon recently released a new ad performance tracking variable that adds another method for evaluating advertising effectiveness. This tracking variable, called Return on Ad Spend, is outlined below.

Return on Ad Spend (ROAS)

The Return on Ad Spend (ROAS) measurement is a helpful metric for evaluating the overall effectiveness of a specific Sponsored Ads campaign, ad group, product or targeting strategy. ROAS is available for vendors and sellers in Campaign Manager and through downloadable reports.

We calculate ROAS by dividing the total sales generated by the advertising spend invested on the campaign (ROAS = Sales / Ad Spend). For example, if you spent $20 dollars on a Sponsored Ads campaign that generated $100 in sales, the ROAS will be 5.

ROAS is the inverse of Advertising Cost of Sale (ACOS), which is calculated by dividing advertising spend invested by the total sales generated (ACOS = Ad Spend / Sales). ROAS is represented as a number that is interpreted as an index (multiplier) rather than a percent (%).

ROAS is available in Campaign Manager and through downloadable reports.

How to Use ROAS

We use ROAS to understand how efficient your advertising investment is at driving attributed sales. As ROAS increases, your campaign becomes more efficient. Depending on your performance objective, ROAS is one metric that can be used to measure the effectiveness of ad products, campaigns and keywords. Comparing ROAS over time or against similar tactics can help provide insight into where we should allocate additional resources.

The ZQUARED Advantage

Clients working with ZQUARED have the advantage of collaborating with a specialized team of Amazon experts that helps enhance their brand through White Hat SEO practices. Examples of White Hat SEO techniques include using keywords and keyword analysis, backlinking, link building to improve link popularity and writing content for human readers. Should any issues arise that are specifically related to the Amazon marketplace, our team is positioned to quickly and efficiently find solutions by contacting our Amazon account representative, an exclusive perk that may not be available to individual sellers.

ZQUARED uniquely helps clients optimize all aspects of their product listings to enhance product rank and sales. We perform keyword research, optimize copy and create graphic design for infographic images and A+ Content. Our specialized keyword research process allows us to identify the most relevant keywords for each product, which we then incorporate throughout the product listing. This process helps the product organically rank higher because the incorporated keywords are highly-searched, relevant terms.

We are also able to create aesthetically-pleasing A+ Content, which has been shown to increase sales conversion rates due to the website-like and infographic-style format. With a visually- and textually-based design, A+ Content allows all types of learners to quickly and easily understand the product features while showcasing the product and its uses.

For more information on how ZQUARED can help grow your Amazon business through advertising strategies and listing optimization, contact ZQUARED at 234-ZQUARED (978-2733) or email partners@zquared.com.

About ZQUARED

ZQUARED was born with a service mindset. Helping you navigate the online retail space in a way never before imagined is our passion. With years of industry-leading experience selling on Amazon, our team’s primary goal is helping you achieve success. We have solutions for managing all aspects of the Amazon platform: design, fulfillment, product listings, A+ Content, Headline and Sponsored Ads, MAP violations, and even social media marketing. Though understanding all aspects of this sales channel can be overwhelming, we break down every aspect of your brand and what you need to increase sales on Amazon.