As marketers face increasing pressure to maximize the value of their ad budgets, return on ad spend (ROAS) has emerged as a key performance metric. ROAS calculates how much money is generated for every dollar spent on advertising, giving a straightforward approach to assess campaign effectiveness.
While ROAS is an excellent predictor of short-term profitability, it should not be the exclusive statistic for social media campaigns. Brand safety and suitability are equally crucial, particularly on social media. Balancing this trifecta safeguards your brand’s reputation and promotes long-term success in social advertising.
ROAS: A KPI that seems too good to be true.
ROAS is critical for performance-driven marketers, particularly in direct-to-consumer (DTC) and ecommerce, where ad expenditure is linked to revenue. Major social networks offer comprehensive tools for real-time ROAS tracking, allowing for speedy campaign adjustments. This is especially valuable in the fast-paced, trend-driven world of social media.
However, while top-performing businesses can achieve ROAS of 5:1 or even 10:1 on Meta and Instagram, these metrics do not tell the full story. Tracking frameworks within social media’s walled gardens stress last-touch attribution.
Fixating on ROAS results in a restricted concentration on short-term gains. High ROAS is frequently achieved by targeting existing customers or high-intent demographics, which is successful but ignores the long-term brand development required for long-term growth.
Social media is essential at the top of the funnel for raising awareness and engagement. These conversations are critical for fostering future conversions, but they do not always lead to sales. Focusing just on ROAS may cause you to overlook the value of early-stage interactions, which are especially significant in sectors with extended purchase cycles or where brand loyalty is important.
Furthermore, ROAS in social media is a dynamic objective, with algorithm updates, greater competition, and developing user behaviors all having a significant impact on performance. For example, when iOS 14.5 was launched, many advertisers’ ROAS decreased by 15-20% owing to changes in tracking capabilities. This instability emphasizes the need for a more comprehensive approach to social media advertising.
Also, while calculating ROAS, platforms like Meta give disproportionate credit to conversions achieved by other media channels, such as linear or connected TV. As a result, the overall ROAS should be measured across all media channels rather than individually.
Campaign performance is only as powerful as the brand’s reputation.
Another source of instability in social media is the prevalence of unexpected, ever-changing user-generated content (UGC), which makes brand safety critical to a successful strategy.
The effect of brand safety on ROAS is significant. If an ad appears alongside hazardous or unsuitable information, it might create unfavorable connotations that undermine consumer trust. This erosion impacts conversion rates, client loyalty, and, eventually, ROAS. According to a DoubleVerify survey, up to 67% of consumers are less likely to purchase from a brand if their advertisement displays next to unsuitable or offensive content.
To overcome these issues, you must adopt strong brand safety procedures specifically designed for social media platforms. Use platform-specific technologies that allow for real-time content filtering, keyword blocking, and placement tracking. Because social media information is created instantaneously, brand safety measures must be dynamic and responsive. Create clear criteria that define a safe environment for ad placements across all platforms.
Beyond safety: Brand suitability.
While brand safety focuses on avoiding dangerous content, brand compatibility goes beyond that. It guarantees that your advertising appear in situations that are both safe and relevant to your brand’s values and intended audience. This principle is especially significant in social media, where information can vary greatly in tone, style, and relevancy.
Ads placed in places appropriate to the target audience are more effective at generating engagement, brand loyalty, and conversion rates. According to a Nielsen study, contextually relevant advertisements are:
- 67% more effective in increasing brand remember.
- Ads in relevant environments can be three times more successful at creating interaction and purchase intent.
- This demonstrates how relevancy improves audience engagement, brand loyalty, and conversions.
The Global Alliance for Responsible Media (GARM) helps to standardize this strategy. Their Brand Suitability Framework establishes a common vocabulary for the business by categorizing content into various risk levels. This enables marketers to fine-tune their strategies beyond the binary “safe” and “unsafe” divisions.
Social media’s automated ad placements necessitate continual monitoring to guarantee that ads are displayed in appropriate situations. Although this can be costly, the long-term benefits of brand appropriateness, such as stronger customer connections and increased customer lifetime value (CLV), outweigh the initial investment.
Balancing the trifecta.
Achieving the optimal combination of ROAS, brand safety, and brand acceptability necessitates modern technologies. Third-party verification partners like as IAS use machine learning to examine massive amounts of content in real time and make speedy choices regarding ad placements that match safety and acceptability guidelines.
However, success requires a proactive and strategic marketing team. Regular audits and ongoing monitoring of ad placements are critical. Consider indicators other than ROAS to better assess campaign success, such as brand lift, sentiment analysis, and customer lifetime value (CLV).
While ROAS is an important measure in social media advertising, it cannot be the only consideration. Integrating brand safety and suitability into your plans allows you to safeguard your brand’s reputation, maximize financial benefits, and create long-term brand equity. This balanced strategy is critical for long-term success in the dynamic world of social media.
