When using Taboola’s network, it’s important to continually review your campaign’s performance to assess which campaign items, platforms, or other segments of traffic are the most cost effective. In other words, you should be keeping an eye on which traffic is driving the highest return on investment, or ROI.
What is ROI?
Return on Investment, or ROI, is the ratio of your net profit to your investments/costs. ROI is important because it shows the real effect that your advertising efforts have on your business. By focusing your advertising spend on traffic that is the most profitable for you, you will be able to generate a higher ROI.
In order to calculate your ROI, you can use the following formula : (Revenue - Cost and Advertising Investment) / Cost and Advertising Investment
For example, let’s say Taboola helped you sell 10 items that cost $50 to produce, and are sold at $100 each. In addition, your budget (advertising investment) spent on Taboola is $300. So your total cost is $800 and your revenue is $1,000.
So the ROI calculation would be:
($1,000-$800) / $800
= $200 / $800
In this case, you have a 25% ROI. For every $1 spent, you’ll get $1.25 back.
Utilizing ROI in Backstage
You can use Backstage to drive higher ROI to your business by optimizing your campaigns based on the insights your draw from the different reporting options available to you. For example, you may see that users are spending more time on mobile devices, or that more purchases are made in a particular country. In these cases you’ll want to focus your budget on mobile devices, or spend more in these countries.
There are several ways to optimize your campaign’s ROI through Backstage, including:
- Creative A/B testing to see what combination gets the best results.
- Adjusting your budget and CPC controls.
- Using different targeting options to target the best-performing audiences.