Tracking ROAS on Marketing Spend: Know Which Campaigns Drive Revenue

Do you know how well your ads and marketing campaigns are performing? Are they driving revenue? Or is your organization simply pouring money into campaigns without insights into how effective they are at bringing in new patients and generating sales?

In an increasingly competitive landscape, many healthcare organizations and systems fight to attract patients into their facilities. To compete, you need to set up an efficient marketing campaign. However, pouring money into several campaigns is not nearly enough—you should know which ones drive revenue so you know which ones are worth keeping and investing in.

Return on Ad Spend (ROAS) is one of the most important marketing metrics; however, many healthcare organizations struggle to measure it.

What Is ROAS?

Return on ad spend (ROAS) is a marketing metric that measures the revenue earned for every dollar spent on advertising. It’s crucial in gauging the success of your advertising campaigns, highlighting the efficiency of your organization’s ad spend.
ROAS is the ratio between the revenue generated by an ad campaign and the cost spent on that ad campaign. The formula is:

ROAS = 100 × total ad revenue / total ad spend

Calculating and tracking ROAS helps provide insights into your marketing spend and helps you make informed marketing decisions in the future, including allocating marketing budgets that yield more positive results.

ROAS vs. ROI

Both ROAS and ROI (Return on Investment) are important metrics in marketing that help business owners and marketers make informed marketing decisions and manage marketing budgets effectively.

While ROAS and ROI are sometimes used interchangeably, it is crucial to understand the key difference between them:

ROAS looks specifically at returns from advertising and marketing spend, while ROI looks at overall profits and takes that into account. Generally, ROAS is the ideal metric if you want to know whether your ad campaigns are actually generating clicks, impressions, and revenue. However, ROAS won’t tell you if your paid ads and campaigns are profitable, whereas ROI will.

Additionally, ROAS is the preferred metric if you want to assess short-term marketing strategies, whereas ROI is more ideal for assessing long-term profitability.

The Importance of Tracking ROAS

Tracking ROAS is essential to reaching more patients and growing your medical business. Data from tracking ROAS provides important insights to help you make informed marketing decisions and create successful marketing campaigns.

ROAS allows healthcare organizations to assess financial returns on ad investments, identify profitable campaigns and effective platforms, and optimize marketing and advertising budgets and allocations to maximize revenue and reach.

Tracking ROAS: The No-Fail Guide

1. Determine your goals

To effectively track ROAS, you need to determine your goals first. This allows you to set specific and measurable goals, track the performance of your ad campaigns, and make informed marketing decisions.

If you set your goal to increase the number of appointments and bookings, you can analyze the effectiveness of your ads in driving patient appointments.

2. Set up conversion tracking

The next step is to set up conversion tracking. Access each of your advertising platforms (Google Ads, Facebook Ads, etc.) and record revenue and ad spend data separately by platform. This will allow you to analyze data for each platform.

3. Connect inquiries and leads to campaigns, appointments, and procedures

Trace inquiries and calls back to the campaign that triggered them. This allows you to identify which campaigns and platforms generate the most leads. Then, track and connect those inquiries and leads to booked appointments and procedures by integrating with your organization’s electronic health records (EHR).

This gives you a clearer view of which campaigns and platforms are most effective in bringing patients through your door.

4. Calculate ad spend

Use the formula ROAS = 100 × total ad revenue / total ad spend to calculate your return on ad spend. Calculate ROAS for each ad and platform. This will help you identify variations in profitability and determine the most effective sources of revenue.

5. Identify patterns

In addition to analyzing ROAS by ad campaign and platform, segment and analyze ROAS by demographics (e.g., age, gender, location) to identify which audience segments lead to higher revenue. With these insights, you can focus marketing and advertising campaigns on high-ROAS segments, allowing you to allocate budgets toward more effective campaigns and audiences, yielding even greater returns.

Tracking ROAS Is Key to Efficient Ad Campaigns

If you want success and growth for your business, you can’t pour money into advertising campaigns without taking the time to understand what works and what doesn’t. Otherwise, you’re wasting both time and money.

The key is tracking ROAS, or return on ad spend. It’s an effective way to gauge the success—or failure—of your marketing campaigns. It provides critical insights into which campaigns and platforms yield the most revenue, allowing you to make informed marketing decisions and allocate resources more efficiently.

Healthcare marketing is not a guessing game. Clicks, impressions, and—most importantly—revenue matter. Start measuring return on marketing spend and create successful campaigns that bring patients through your door. Let’s talk.