Profit on Ad Spend: Maximize the Return for your Business

Understanding the true profitability of your ad campaigns can significantly impact your business decisions. One valuable metric that goes beyond the surface is Profit on Ad Spend (POAS). This metric offers a deeper insight by factoring in the net profit generated from your advertising efforts, rather than just the revenue.

POAS is crucial for effective decision-making because it shows the actual profit realised from each pound spent on advertising. While Return on Ad Spend (ROAS) provides a useful snapshot of revenue return, it fails to account for the costs that eat into your profit margins. Therefore, incorporating POAS into your analysis enables a more accurate assessment of campaign performance.

Many businesses find that relying solely on ROAS can be misleading. By incorporating POAS, you can fine-tune your advertising strategies to focus on campaigns and channels that deliver genuine profitability. This approach ensures your marketing budget is allocated in the most effective way possible, ultimately driving sustainable business growth.

Understanding Profit on Ad Spend

Profit on Ad Spend (POAS) is a key metric in e-commerce that helps businesses determine the profitability of their advertising efforts. This section will cover the core concept, methods of calculation, and significance of POAS in the e-commerce sector.

The Basic Principle of POAS

POAS, or Profit on Ad Spend, measures the gross profit a business gains for each unit of currency spent on advertising. Unlike ROAS (Return on Ad Spend), which only takes revenue into account, POAS focuses on profitability by factoring in the costs associated with the products sold. This allows businesses to make more informed decisions about their advertising strategies. By analysing POAS, companies can identify which campaigns generate the highest profits, ensuring that advertising budgets are utilised effectively.

Calculating POAS

To calculate POAS, divide the gross profit attributable to an advertising campaign by the amount spent on that campaign. The formula is:

[ \text{POAS} = \frac{\text{Gross Profit}}{\text{Ad Spend}} ]

For instance, if an advertising campaign generates a gross profit of £2,000 and the cost of the ad campaign is £500, the POAS would be:

[ \text{POAS} = \frac{£2,000}{£500} = 4 ]

This implies that for every £1 spent on advertising, the business earns £4 in gross profit. Accurate calculation of POAS requires detailed tracking of both advertising spend and associated profits, making it essential for financial and marketing departments to collaborate.

Importance of POAS in E-commerce

POAS is particularly vital in the realm of e-commerce, where profit margins can be thin and competition fierce. By focusing on actual profit rather than just revenue, businesses can maximise their return from advertising investments. POAS helps e-commerce platforms determine which products yield the highest profits from advertising, allowing for better allocation of marketing resources.

Additionally, understanding POAS can aid in budget planning, helping companies scale successful campaigns while reducing expenditure on less profitable ones. This data-driven approach can lead businesses to outperform competitors by strategically enhancing their ad campaigns for better profitability.

Strategising to Improve POAS

Improving Profit on Ad Spend (POAS) requires a comprehensive approach that focuses on optimising advertising campaigns, leveraging data effectively, and implementing strategies for long-term growth.

Optimising Campaigns for Higher POAS

To maximise POAS, businesses must refine their advertising campaigns. This includes selecting the right keywords, creating compelling ad copies, and using targeted audience segments. A/B testing can help identify which ads perform better and should be scaled up.

Regularly reviewing and adjusting bid strategies ensures that spending is efficient. Utilising negative keywords can also prevent ads from showing on irrelevant searches, thus saving budget and increasing profitability.

It is essential to monitor the performance of different channels continuously, reallocating budget to the most effective ones. Additionally, integrating customer feedback into campaigns can significantly improve relevance and engagement.

Leveraging Data for POAS Enhancement

Data analysis plays a crucial role in enhancing POAS. It is important to track metrics such as click-through rates, conversion rates, and cost per acquisition. By analysing these metrics, businesses can understand which aspects of their campaigns are most effective.

Advanced tools like Google Analytics and CRM systems can provide deeper insights into customer behaviour and purchasing patterns. By using this data, businesses can tailor their ads more precisely to target high-value customers.

Automation tools that use machine learning can help to predict future trends and optimise campaigns in real-time. Reporting should be made frequent and actionable, ensuring that insights are quickly integrated into strategy adjustments.

Long-Term POAS Growth Tactics

For sustained POAS growth, businesses should focus on building brand loyalty and customer retention. Offering incentives for repeat purchases and leveraging email marketing can keep customers engaged and coming back.

Investing in high-quality content that educates and informs customers can also improve POAS. Engaging content can lead to better customer experiences and higher conversion rates. Consistent branding across all channels ensures that the brand message is clear and memorable.

Partnerships and collaborations with other brands can also introduce products to new audiences, thus expanding reach and potential profitability. Regularly revisiting and adapting strategies as market dynamics change will help maintain and improve POAS.

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Trade Show Booth Etiquettes You Must Follow For A Successful Event

Trade show exhibitions are an integral part of marketing and advertising. It helps attract a target audience, generate new leads and elevate revenue. Although there are numerous ways to host the show, setting up the booth remains constant. So, whether you are selecting a 10’ by 10’ backlit display or a 59’ x 101’ fabric banner stand, there are a few things and etiquette to be more specific that need to be followed.

When the host of the show and staff are well trained, it helps create a lasting impression on the minds of visitors and promotes customer engagement with the brand. Still, many business owners or marketers overlook these etiquettes that later affect the success of their event. If you wish to have a successful event, you must abide by these trade show booth etiquette.

Booth Setup And Maintenance

First things first, you must focus on the setup of the booth and its maintenance. Your booth must be well organized with a clear display of the product you are promoting. The design or graphics on the table cover, banners, and counter should be eye-catchy with a visible company logo. If you are using trade show displays, make sure they are easy to assemble and highlight the company product. Opt for the display that helps grab the attention of your audience.

In addition to this, make sure to have a hidden spot for all the supply boxes and trash. A clean, well-lit, and the organized booth is most likely to offer the marketer desired return on investment.

Engaging Attendees

After your booth is set up, it’s time to attract the attendees and keep them engaged with your brand. Consumers go to trade shows for a cause, so booth employees should swiftly introduce themselves and start asking attendees questions to see if they can assist them in any way. This is where preparing a script for a greeting or introduction might help.

Most individuals who visit a trade exhibition have a legitimate interest in learning more about your products and services, so make sure your staff gives them a quick rundown of the script and is prepared to continue the conversation and engage the client from there. To establish a connection with visitors and determine their requirements, staff should also be ready to ask open-ended inquiries.

Defines Staff Roles

Staff at trade shows should be assigned to a specific region of the exhibit and should be able to communicate vital company information to visitors. Some businesses even give employees a customizable welcome and sales script so that everyone on the team can offer a uniform, refined, and effective message to guests.

Aside from the sales script or elevator pitch, firm employees should be able to answer simple queries or direct visitors to additional resources. At least one person with the experience or authority must always be in charge of the booth. That person should be available to provide excellent services to attendees.

To Sum It All Up

These are a few etiquettes that can help your company and product booth stand out. Know that when customers interact with a brand during trade shows and exhibitions, they formulate a mutual connection and understanding. It helps businesses find loyal customers and get a lead over the competition, eventually having a successful event.

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How to Be Successful With Paid Social Media Advertising?

Social media advertising has become the most vital element for any kind of business in recent times. In fact, it is the only means in which you can enhance the marketing prospects of your business at a great speed. But we are all humans and we are bound to make mistakes which can result in a significant loss for our business.

In the year 2018, the CMOs have spent a lot more than 21% of their budget for marketing on advertisements. They have spent around 66% of their budget on social media advertisement which is really a major amount to be invested. In the same year a lot of marketers spent about 25% of their budget on selecting a weak marketing plan as well as a poor medium to communicate with their target audience effectively.

Now let us learn about the trick behind the success of paid social media advertising for a business:

Determine The Goals Of Your Paid Social Media Advertising And Its Key KPIs

The very first step towards a successful paid social media advertising is to determine and understand the key purpose of your business, that is the different elements which your business wants to achieve.
Once your business goal has been determined you are required to find out the key performance indicators which will be needed to measure the success rate of your business. Cost Per Click is a good example of the KPI for paid social media advertising.

Your main priority should be to maintain transparency in the source of your data and also be clear about the way in which you are going to evaluate the data with a great level of openness.

There is much business that fails to establish any link with the advertising contents and look beyond where actually you can find the best analysis are found.

Link All Your Personal Ad Accounts To A Single Spot

Always make sure that all your owned advertising accounts are located in one place and you don’t have to navigate here and there in between different native tools. Don’t waste your time to figure out the purpose of the outlying sets of data for it is very much irritating and insignificant. Such procedures also increase the possibility of making mistakes.

But if you are able to view all your owned ad accounts in one place, you can easily connect them all and view the complete advertising picture of your business and prevent yourself from making unnecessary use of your budget.

Alignment Of Teams On A Single Spot Ensures Effective Integration

It is really complicated to align various different local, regional and national teams together in terms of their expenditures in a situation when the advertising budget is distributed among different branches, places, and departments. In such a situation, the communication between them is also very difficult and there is also no awareness.

If the teams are not operating from the same place there is a high possibility for them to make mistakes, tailback and there is also no clear idea about the meeting outcomes. Sometimes a project can also be put on hold in such a situation. It is seriously a waste of time and money.

So if you want an effective collaboration, make sure that all the teams can evaluate and view their ad accounts in one place and that all their money related information is issued in the same currency. You can also personalize the data, split them from different angles and finally compare them.

Your main purpose should be to make your teams work from a single platform as well as with the same objective of creating a successful paid media.

Implement Competitive Benchmarking To View A Wider Picture

It is very much essential for you to benchmark your performance expectation opposed to your rivals, industry as well as your location. In this way, you can determine those areas in which you need to improve and frame your strategy accordingly.

Once you set a benchmark for your business you can easily determine the areas in which your rivals are spending their budget. You can successfully find out the weak points of your competitors and hit them right there. You will also be able to access certain critical analysis of the paid advertising plan and outcome of your rivals. Last but not least you will have a much better understanding of the needs and expectations of your customers and help you perform better.

Improve The Efficiency Of The Paid Social Media With AI And Minimize Mistakes

In the marketing world, it is not possible to develop a budget based on intuition as it will mostly fail. In such a situation a paid solution is very much necessary to put an end to all your worries.

It would be best if you implement an AI-enabled model that will help you determine the area in which you can spend your budget. If you are working on a variety of platforms and your strategy is for a variety of regions then AI is the only way using which you can optimize your business.

It is very easy to boost your business post if you know the actual budget behind it. It is true that your target audience will get engaged in an organic post as well but it is not possible for you to drive new sets of an audience with it and that calls the need for a paid social media ad.

You can very easily implement a post-performance prediction tool which will help you determine which organic post will perform effectively once it is boosted. The process is implemented by using an appropriate and intelligent algorithms.

About the Author:

Anna jhonsan is Digital Marketing Manager at cybrain Software solutions which provide Digital Marketing, SEO and Social Media Marketing.

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The Top Digital Advertising Trends Of 2020

New digital advertising trends develop each year courtesy of emerging technologies. The advertising industry commits to breaking through persistent challenges and opening up new possibilities. Mobile technologies will push overall growth, and video and performance-based models will take precedence in 2019.

Below are some of the digital advertising trends of 2019 you should use to grow your business according to Orange Label, one of the best orange county advertising agencies.

1. Digital Advertising Trends: Mobile-heavy Budgets

IAB and Pricewaterhouse Cooper's report that mobile tech is the best way to increase growth. Every year, mobile accounts for a more significant percentage of digital formats revenue. Desktop platforms, on the other hand, are becoming less popular.

The mobile expenditure for digital ads reached 63 percent. Advertisers are expected to spend $20 billion more on mobile ads than on TV ads this year. Mobile ads include vertical videos and other engaging visual content.
Certain 360º video ads allow prospective car buyers to test a vehicle on different terrains. This is way more immersive than scrolling on a passive ad on a mobile phone. You should expect mobile-heavy budgets and more innovative mobile advertising content this year.

2. Video Advertising

Generation Z makes videos a large-grossing and popular ad tool. Gen- Z is the largest population alive. They consume about 68 videos daily from different media platforms like YouTube, Twitter, and Instagram, among others.
Advertisers are now pushing 360º videos, which are more immersive to users. Some airlines, like Cathay Pacific, use 360º videos to enable users to sample their services before they arrive to book a flight.

Video advertising closely relates to the voice and visual searches frequent among Gen- Z. The companies investing in voice advertising include Facebook, Google, and Amazon. More consumers are using smart speakers like Alexa to field questions and product searches online.

Video advertising and voice searches are an essential break away from traditional forms of advertising. Advertising value lies in queries and searches, and brands need to rise above conventional methods.

3. Partnering For Content And Connections

According to a Nielsen Study, people trust known people, secure websites, client reviews, and published content for their ads. Unlike in recent years, people anticipate the allocation of more revenue to influencer marketing.

Consumers are growing tired of similar messaging content when companies advertise their products. It’s advisable to partner with a media content company to develop an authentic and unique messaging service. It helps to capture your customer’s imagination and purchasing power with lively content.

4. Programmatic Advertising Replaces Traditional Advertising

Programmatic advertising became popular since the EU began regulating the GDPR. Advertisers don’t pursue impression goals anymore in the new age. Advertisers need to track the performance of their ads based on a revenue and expenditure scale.

There's much confusion still going on regarding GDPR in many countries. Once the dust settles, more digital media companies will adopt programmatic advertising. Programmatic advertising is transparent and measurable.

5. Selling Audiences, Not Ads

Digital advertising professionals observe that the industry is gearing toward targeting real clients. The people-based approach utilizes licensed user data from social registration platforms to link ads across devices. It’s also an effective way of selling ad campaigns to target groups.

Advertisers charge premiums for quality brand campaigns where they use programmatic tech.

6. Mobile-first World: 5G Technology

Digital advertisers expect 5G technology to power most of the new technologies in 2019. This is especially true for tech that requires reliable connectivity and fast data speeds. Artificial intelligence (AI) and Internet of Things are excellent examples of such new tech.

The Interactive Advertising Bureau reported in 2016 that people block ads because they slow down their browsing sessions. Advertisers on mobile and desktop sites can benefit from the incredible 5G data speeds. Fewer users will disable ad blocking when they browse on a 5G network.

Data speeds improve the efficiency of programmatic advertising and facilitate the retrieval of complex data. It also reduces the barriers to entering AI and Augmented Reality (AR).

7. Artificial Intelligence And Automated Processes

Advertisers are integrating Artificial Intelligence into their lives day by day. The applications of AI in advertising include measuring data, automating operations and intelligent marketing choices.

Chatbots is an excellent example of an automated advertising operation. Chatbots respond to client messages across mobile platforms and websites in real-time.

Some advertisers personalize the automated process to target customers at the right time, place and format. This makes customers feel like the ads were unique to them.

8. Shifting To Performance Marketing

Performance marketing is a significant trend that eliminates data and privacy scandal issues. Despite the challenges, advertisers always seek to secure returns on ad investments. Performance marketing-models are becoming hits with many digital advertisers in 2019.

The model guarantees a sustainable ROI and teamwork between advertisers and marketing partners. A marketing partner like this company screen and deliver clients for advertising partners. They also ensure that customers get the value for their money.

9. Rise Of AR Ad Campaigns

Augmented Reality (AR) is expected to revolutionize customer experiences in a significant way. Digital advertisers hope to transform these experiences to direct sales in 2019. The process involves finding a platform that supports AR content for immersive ad campaigns.

AR technology enables customers to take virtual samples of experiences and items for sale. The items and services for AR ad campaigns include interior décor, nail polish, and medical surgery procedures.

10. 3D Photo Advertising Applications

Platforms like Facebook support 3D photo features on the newsfeed and stories. The images are easy to create and engage with.

Wayfair uses 3D photo technology to advertise furniture on Facebook. More advertisers are expected to join the 3D photo ad campaign in 2019.

You may also distribute the same 3D photography concept to third-party advertising platforms. This will widen your reach and improve the ROI.

Wrap-up

The digital advertising trends in 2019 will boost competition in the digital advertisement industry. The increase in company expenditures shows that brands are looking to establish relationships with customers.
It's advisable to follow digital advertising trends that will stand the test of time. This will help your business stay ahead of the advertising curve.

For more tips and information, please explore the other sections of our blog.

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Why TV Advertising Is Still Relevant

Isn’t TV, like, so last year?

I mean, with YouTube, Netflix, and Amazon Prime, do people even still watch it?

Well, yes…apparently.

In fact, the average American household watches about 8 hours of TV every single day!

Now, the debate about TV has major implications for advertisers. With set budgets and changing digital trends, it’s a constant battle for advertisers to allocate resources to the platforms that make most financial sense.

We live in a digital world of colossal social media use and massive online content consumption. Some argue that TV is no longer the best place to advertise.

But, clearly, there remains an enormous potential audience available. Surely there’s still room for TV ads too?

Keep on reading to discover exactly why TV remain relevant in today’s world of advertising.

1. TV Is Immensely Popular

Watching TV remains one of the most popular leisure activities around the country.

As we’ve seen, hour upon hour is watched daily in the average household.

That equates to the ability to reach a huge audience.

For instance, even though numbers have dropped off, around 100 million people watch the Super Bowl every year. Now, to get an ad on TV at that time requires many millions of dollars. Of course, that’s generally unattainable for anyone other than the largest businesses.

But this extreme example demonstrates the potential reach of ads on TV. Millions of people can be watching your ad at one given moment. Done right, and it can have a major impact on revenue.

2. The Audience Is Happy and Captive

Clearly, people love watching TV.
They’ll watch non-stop TV for as long as they can! In simple terms, you have a captive audience to target.

Consequently, unlike many other advertising platforms, people will generally stay tuned for your ad.

Compare that with magazines, newspapers, radios and even online advertising. It’s all too easy to skip over the paid advert that’s been placed there, or to change the radio station, or to install an ad blocker. The money you spend on these ads is effectively wasted.

The opposite is usually true of ads. People wait (patiently or not) for their show to recommence. That means you have a guaranteed set of eyes upon your ad.

3. Effective Targeting

Alternative online advertising platforms are often favored over TV for their targeting capabilities.

It’s possible to target a specific audience to an incredible degree of accuracy.

But we shouldn’t forget the ability of TV to do a similar thing. Through effective analysis of TV audiences, you can establish a solid impression of who watches a particular program or channel.

A particular demographic tunes in to Show X at Time Y every day. If it happens to match your target audience, then you can place an ad accordingly. All told, you have a highly targeted captive audience to display a product or service.

4. Consistency Against Adversity

It’s worth emphasizing the resilience of TV.

Indeed, it’s hard to overstate the potential disruption of changing trends in content consumption. As Netflix, YouTube and other online alternatives arise, it would be easy to predict the demise of TV. Many have, which is possibly why you’re reading this article!

However, all evidence indicates the sustained relevant of TV. Slight dips have been experienced. But all in all, people continue to watch vast amounts of TV each year.

Some countries, such as Spain, have even seen an increase in television consumption. It’s foolish to disregard the potential for TV ads.

5. The Results Say It All

It’s true that the popularity of TV could have nothing to do with advertising relevance.

Simply, the TV would be inarguably irrelevant if its viewers didn’t lead to campaign success. Fortunately, that isn’t the case.

TV ads work. It’s as simple as that.

Regardless of where you look in the world, TV advertising continues to generate top returns on investment. From Australia to the UK, to Germany and back to the US, television advertising generates sales, drives internet traffic, and boosts brand recall.

6. It’s Trustworthy

Why do TV ads have such an impact?

One reason is that people continue to trust them.

Indeed, that trust may be because these ads been around for so long. Most people have grown up with a TV in their lives. They’re used to watching adverts on them. That amounts to a level of trust for what they watch.

By contrast, internet ads are the new boys on the block. Human psychology stipulates that we have less trust for something we’re less au fait with.

Equally, the cost involved in TV advertising demands a level of quality in their delivery. The effort that goes into production commands a level of trust.

Compare that to internet ads from Joe Blogs- some random bloke, sat in his pajamas in the front room of his house, filming on his smartphone and trying to sell you his latest affiliate marketing idea.

It’s cheap and easy to advertise online. As a result, lots of people do it. And that makes it hard to trust what you see and hear.

7. TV Advert Properties

TV adverts remain impactful due to their properties too.

Think about it: sound, visuals, and motion are all intrinsic components. Footage can be from real-life or contain animations. Sound and image quality are both high. There’s no limit to the details and opportunities at your disposal. Ads can last for a range of time, depending on your budget.

Compare that to forms of ads.

Facebook, for example, often plays its videos on mute automatically. Viewers only get visuals and motion to enjoy, unless they actively opt for sound. Other forms of advertising (such as magazines) only offer print. It’s far harder to captivate and impact someone’s emotions this way.

Time to Create Some TV Ads

There you have it: exactly why TV ads remain relevant in 2019.

In a modern, digital world it’s easy to assume TV is a thing of the past. As we’ve seen though, that’s far from the truth of the matter.

Hopefully, the information above has persuaded you of the value TV continues to provide in advertising.

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