Are Your Paid Ads Performing?

There is ONE thing all businesses need:  High Quality Leads!  No business is exempt from needing to connect with the right people and converting them into paying customers. It’s the difference between getting by and scaling your business.

There are many ways to find leads:

  • Lead magnets – Trading email addresses for a freebie
  • Challenges – Running free challenges in your Facebook group
  • Content marketing – Posting blogs, social media posts, stories, reelz
  • Webinars – Hosting a live or evergreen webinar on a relevant topic
  • Workshops – Hosting a value added workshop series
  • PPC ads – Pay Per Click ads based on Google keywords
  • Display ads – Print ads for digital platforms with a clear CTA
  • Profiles – Searching profiles on social media platforms
  • Facebook Groups – Posting/Promoting/Engaging in Facebook Groups
  • Referrals – Introductions from previous clients, colleagues, friends or family
  • Affiliates – leads that come from someone else’s audience produced form their promotional efforts on your behalf

At the end of the day, you want to know that your method is working. There are several ways to measure your success rate, but the most important is if you are converting. Conversions always trump other metrics.

If you are in front of the “right” audience, your messaging will attract potential clients to you. They will hear your CTA loud and clear.  If your leads are not taking action, it is possible that your leads are not your ideal client.

At Audientum, our primary focus is helping clients get in front of the “right” audience so they see an ROAS (return on ad spend). If your lead generation efforts are not converting, you’re throwing away money. 

When large corporations build targeted ad campaigns, they expect to generate $8 for every $1 in ad spend. That’s the bar they use for determining if their ads are performing well.  They know they need to cover operating costs: cost per lead, copywriting, filming, talent, ad spend, etc. to maintain profitability.


The first time I ran an ad campaign, I spent $7500. I converted $0!!  My ad agency assured me that my ad was performing well. My ads were being seen by hundreds of thousands of people. I was raising my brand awareness. I was told that running ads is a long game. Short term ads don’t produce results. They said algorithms are designed for low ad spend over the long term to produce results. It takes time to “learn” who should see your ads.

In one of my ad campaigns, the algorithm decided that men in Kenya should see my ads and not women between 38 and 52 as defined in the ads manager. Needless to say, that group of people did not need my services.

According to the metrics in the ads manager, my campaign was a success. I had exceptional impressions and a high click through rate. But, in my mind, it was a total bust because I didn’t convert any leads into paying customers, even after my ads were redirected.

Bottom line results are very important to me.  I want to know my cost per lead, my return on ad spend, and my overall profitability. And, I know you want to know that too!

Do you know what your ROAS is or have you been focused on the number of impressions you’ve been getting from your ad campaigns?

It’s actually super simple to calculate your ROAS percentage.

You’ll need to calculate:

1. How much money you spent on Google/FB/LI/YT Ads (ad spend)

2. How much revenue you generated from products /services sold by your ad campaign.

Plug those numbers into this formula:

Revenue ÷ Advertising Costs = ROAS

Example:

To keep it simple, pretend you spent $500 in ad spend and made $1000 in revenue from your campaign.

Your formula would look like this:

$1000 (Revenue) ÷ $500 (Ad Spend) = 2

This means you received a 200% (2X) ROAS.

And that’s good, right? You doubled your investment!

Not necessarily, it really depends on how much overhead went into creating those ads. You need to account for copywriting, graphic design, agency fees if you have an ads manager or VA manage your digital marketing on top of your actual ad spend. 

Generally, a 300% return ($3 in revenue for every $1 spent on ads) is considered a “gold standard” for ROAS. However, you may need to have a higher conversion rate to be profitable. But this is a good rule of thumb to set your campaign performance goals by.

While other metrics like click-through rates, impressions, and cost per conversion are valuable, they don’t measure how much revenue your ad spend generated. And..that’s the number we should be most interested in.

If you want to know if your ads are generating quality leads, look at your ROAS. It will give you a clear picture on profitability. If your ads are building the size of your Facebook group or increasing your email open rates, but they are not buying from you, your ROAS will become an important number for your business.

If you’re not converting there are three key areas to look at:

  • Do you have a highly defined avatar?
  • Is your message clear?
  • Does your offer solve your ideal customer’s pain point?

Marketing costs are a part of every business, whether you’re doing it yourself, or you’re paying an agency to fill that role. In order to scale your business, you need to have a consistent ROI on your marketing efforts. If your lead generation efforts aren’t producing high quality leads, it might be time to change your strategy.

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