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"Your turnover might be increasing, but if your ROAS is low, you are actually growing by losing money."
Don't Burn Your Money: How Much Do Your Ads Earn You?
How to Calculate ROAS? (Elementary Math)
The formula is very simple: ROAS = (Revenue from Ad / Ad Spend) x 100 Example: You spent 10,000 TL on Google Ads. You made 50,000 TL turnover thanks to these ads. ROAS = (50,000 / 10,000) x 100 = %500 So you earned 1 to 5. Congratulations, you are printing money.
ROAS vs ROI: Those Who Don't Know the Difference Go Bankrupt
ROI (Return on Investment): All expenses such as rent, personnel, shipping, product cost are included. It is the company's general profitability. ROAS (Return on Ad Spend): Focuses only on the ad budget. Measures the performance of the ad. *Even if ROAS is high, if your profit margin is low, ROI can be negative. That's why we combine ad data with net profitability using CRM systems.*
What Should a Good ROAS Be?
This depends entirely on your profit margin. The table below shows average Target ROAS rates by sector:
| Sector | Profit Margin | Target ROAS (Minimum) | Status |
|---|---|---|---|
| Jewelry | High (%50+) | %250 (1:2.5) | Ideal |
| Electronics | Low (%10-15) | %1000 (1:10) | Mandatory |
| Service (Clinic/Lawyer) | Very High (%80+) | %200 (1:2) | Sufficient |
| Clothing / Fashion | Medium (%30-40) | %400 (1:4) | Successful |
Table Analysis: If you sell electronics (low profit margin), the ad must bring you at least 1 to 10 so you make money. But if you are a dental clinic, even 1 to 2 makes you rich.
3 Certain Ways to Increase ROAS
1. Optimize Landing Page: If the person clicking on the ad comes to a slow-loading or confusing site, they flee. Fast and conversion-oriented pages instantly increase ROAS by 30%. 2. Right Target Audience: Showing ads to "everyone" is throwing money in the trash. Target only those interested with Remarketing. 3. Negative Keywords: By blocking words like "Free", "Cheap", "Second Hand", only appear to customers who will spend money.
Conclusion: Data-Driven Growth
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