What’s A Good ROAS In Parts And Accessories Advertising?

Auto parts and accessories manufacturers and retailers that advertise need to understand return on ad spend (ROAS). In this three-minute video, Spork Marketing Founder Jason Lancaster quickly explains:

1. What ROAS Is
2. How To Calculate ROAS
3. What Parts And Accessories Advertisers Consider A “Good” ROAS
4. Why Manufacturers and Retailers Have Different ROAS Targets
5. Why The ROAS You See In The Reports Isn’t Always Accurate
6. Why Most Companies Set Their ROAS Target At Break-Even

The video is just 3:27 long – check it out!

Don’t Have Time To Watch? Here’s A Quick Summary

If you spend $1 on ads and earn $5 in revenue as a result of those ads, you have a 500% ROAS. 500% is about the average for companies in the auto parts and accessories business, only ROAS can range from 300% to 1000%.

Tracking ROAS is a little tricky, as you can’t strictly rely on Google Analytics or any of the advertiser reporting for true ROAS. Instead, you want to evaluate ROAS in a few different ways and remember that most tracking tools are more likely to undercount ROAS than overcount it.

Finally, it’s a good idea for all businesses to create a budget and evaluate why they’re advertising. Is it to facilitate growth? If so, ROAS should be set at break-even. If ads aren’t about growth, then the ROAS should be set to hit a certain net or gross profit margin.