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How does Google calculate ROAS?

"Here's the math: $5 in sales ÷ $1 in ad spend x 100% = 500% target ROAS" (Source: https://support.google.com/adwords/answer/6268637)

Before I explain why ROAS kills profit, you need to understand exactly what ROAS means in Google Ads. I have a complaint about...

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Fundamentally, with pay-per-click advertising, the idea is to balance the cost per click that we’re willing to pay with the profit per click that we expect to achieve. As advertisers, we attempt to find the right level of spending that maximizes the business profit. And since every business is dif...

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In a word, “No!”

In two words, “Hell no!"

In eight words, “No, because of the law of diminishing returns."

Here’s why…

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Presented by David Deppner
Meet Magento New York, October 17, 2017

Competition for online advertising is driving up your costs, and it’s not going to get any easier. What can you do to improve your PPC advertising and get even more profitable? This presentation covers some common misconceptions...

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ROI is NOT Profit

Oct 02, 2017 David Deppner

Would you rather have a 10% return on $100 or a 5% return on $1000?

\[ \begin{align} $100 \times 10\%_{ROI} &= $10 \\ $1000 \times 5\%_{ROI} &= $50 \end{align}\]

If you have to pick one or the other, you’d pick the $1000 investment at the lower ROI. In the real world, though, we can usua...

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