Why 99% Of E-commerce Stores Fail To Measure ROAS

by Amir Levi 09.Jul.2020 4 min read Views
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Amir Levi
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Do you advertise your e-commerce business on Facebook or Google, or both? Are you tracking ROAS as a key metric? If you answered “yes” to both, then you likely aren’t measuring ROAS accurately. The biggest issue with online paid advertising via Google and Facebook is tracking duplicate conversions. In fact, most e-commerce businesses and users are unaware of it. Google and Facebook falsely count the same order more than once, thus giving users the wrong idea and a less-than-accurate picture of what their real Return On Ad Spend (ROAS) looks like. In this article, we will identify some common measuring mistakes related to ROAS that most e-commerce businesses make and how to avoid them.

4 Reasons Why E-commerce Stores Fail to Accurately Measure ROAS

1. Duplicate Conversions On Facebook And Google

If your business has active paid ads running on Facebook and Google, then you are likely watching conversion rates on both channels. However, if buyers interact with or click on a Facebook or Google ad, and then land on the checkout page, this can result in a duplicate conversion. For example, if buyers’ scripts crash or if they refresh their checkout pages, then this means that both Facebook and Google count the same order twice, which can seriously skew conversion results. Furthermore, if the same buyer with the same IP address or device clicks on a Google ad and also a Facebook ad, and then later places an order, then this appears on conversion reports as two separate orders when it in fact is only one order from the same buyer.

2. ROAS Measures Revenue, Not Profit

Many e-commerce businesses are under the false impression that ROAS measures profit, when in fact it only measures revenueFor example, discounted campaigns often show healthy conversions, however, profits aren’t always up to par.

3. ROAS Only Counts Ad Spend

Of course, hence its name, ROAS only measures ad spend and cannot measure, integrate or count shipping expenses, cost of goods sold, or overhead sources. As a result, if your e-commerce business uses ROAS as a primary KPI, then this can seriously skew the perceived profitability of any digital marketing campaign. In reality, advertising campaigns can cost a lot more than what most e-commerce businesses realize and much more than other distribution costs, such as copywriting, content creators, design, and technology.

4. ROAS Is Not Measured On Omnichannel Campaigns

ROAS also cannot be used to accurately measure revenue or sales from multiple channels, other than paid social or organic search. So, if your e-commerce business uses other marketing channels or mediums, such as email, text, direct mail, or direct messages, then ROAS isn’t picking up results from these channels.

How To Accurately Measure ROAS: The Solution

AdScale Order Report

If you are feeling discouraged or worried about what your accurate ROAS and ROI actually look like, the good news is that there is a solution. The best way to avoid recording duplicate conversions from both Facebook and Google is to track order identification numbers. Unfortunately, Facebook nor Google offers such a feature. However, AdScale provides an Orders Report that can match conversions on Google and Facebook with e-commerce store order identification numbers, which not only helps avoid counting duplicate orders and mismatched conversions, but also provides a complete, full, and accurate view of your advertising performance so you know exactly where your e-commerce business stands.

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