The Key To Digital Marketing; Know Your R.O.A.S.

I’ve said it before, I’ve said it one hundred times: I do not like “do this one thing and all your problems will be solved.”

However! When it comes to digital marketing, I have found that understanding one key concept really has helped me take our real-estate business from zero to hero.

That key was understanding my Return On Ad Spend.

Letting Fear Run Our Marketing Campaigns

When I first started running digital marketing for our real-estate business, I was admittedly a little bit of a wuss.

I would set our Google and Facebook campaigns at $5 per day, and then when we hit $100 in ad spend I would have a semi freak-out moment thinking I had “broke the bank” with advertising spend.

The problem was I hadn’t yet run through our numbers to understand exactly how much I could spend to see a positive ROI (a.k.a. ROAS in marketing speak) on our total ad spend.

Biting The Bullet And Bumping Our Ad Spend

After about a month of my mini freak-out moments, my partner came to me and asked if there was any way we could increase the lead flow – we had seen a good number of leads but to really see the success we were looking for, we needed to get a few more leads each week.

I told him of course we could increase our lead flow, we just need to spend more on advertising.

“However,” I said, “we’re already spending close to $100 a week! We could go through our bank pretty quick if we increase the budget.”

Ahh, how naive I was back then.

Luckily, my partner had bigger balls than I had at the time and pushed me to bump the ad spend to $50 per day.

“$50 per day?! We’ll go broke” was the only thought going through my mind.

But I did it. I went to my Google dashboard and increased the budget to $30 per day, then pushed Facebook to $20 per day.

Going For Broke And Making Bank

Just as I had feared, after pushing our ad spend to $50 per day our marketing budget quickly disappeared.

I was having the “marketing budget stress sweats” on a daily basis.

However, being so stressed about spending money, I was blind to the complete picture.

With my eyes focused solely on the dwindling budget, what I didn’t see was that our lead flow increased proportionately. In fact, our lead flow increased more than the budget we added as our re-marketing campaigns had increased.

After a little over a month of spending $50 per day, we ended up making $70,000 in wholesale fees.

Crunching The Numbers

After seeing “money in the bank”, I decided to put my fear of increasing our budget to rest and sat down to crunch our numbers.

As it turned out, our Return On Ad Spend (ROAS) was pretty damn fantastic.

Over the two month period, we ended up spending $1,610 in ad spend on Google Ads, and another $400 on Facebook, for a total of about $2,000 in ad spend.

With that ad spend, we received 23 leads, at a total cost of $86 per lead.

In the end we made $70,000 in fees, with an additional 2 leads under contract as we speak that will most likely turn into some sort of deal for us.

Which means we made a whopping 35x Return On Ad Spend.

Know Your Numbers To Win In Digital Marketing

After crunching the numbers and really seeing how much we received back from our marketing budget, my fears of boosting our ad spend completely disappeared.

We are now running about $100 per day consistently.

All it took was crunching our numbers and understanding where we stood.

What does this mean for you?

If you want to run an effective marketing campaign, you need to know your numbers!

Specifically, you need to understand how much you can spend to see a return on your ad spend.

A general rule of thumb is 5% to 30% of your gross revenue should be spent on advertising, with an average of 15%.

Believe me, once you actually see your results your fears will vanish.

Want More?

If you didn’t know, I run a digital marketing company and love helping business owners reach the next level of success with their digital marketing. You can see all of the tools I use to get our company and our clients companies results on our resources page here.

If you’d like to hire us to create a comprehensive digital marketing plan for your business, or to do digital marketing FOR you, reach out to us at www.getclientsquick.com.

To your success, fulfillment and happiness!

-Gabe

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