ROAS vs. CLV
Return on ad spend, or ROAS, is a popular metric marketers use to gauge the success of their campaigns. At Retina, we’ve noticed that many companies have very low ROAS—usually around 1 or even less than 1. This often happens when a company’s ad spend isn’t proportional to their prospects’ or existing customers’ lifetime value.
One way to dramatically increase ROAS is to create value-based lookalike audiences and set corresponding bid caps. In this way, businesses can optimize ad spend based on the value their customers will bring them in the long run.