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Optimize Your Ad Spend: How to Decide Which Ads to Keep or Cut

Maximizing your return on advertising spend (ROAS) is crucial for driving growth and efficiency in your marketing efforts. Our approach provides a straightforward, data-driven method to review and optimize ad performance every two weeks, ensuring you invest in the most effective campaigns.

High-Level Approach

We recommend using a 2-week cycle to review ad performance. At the end of each cycle:

  1. Review ads that ran in the past 2 weeks
  2. Stop individual ads that are not performing well
  3. Test new ads using an experimental budget for the next cycle

Criteria for Keeping and Cutting Ads

We use two main criteria when determining what stays and what goes:

1. Good Economics

Evaluate the ROAS of all ads in aggregate. ROAS is different by business and vertical, but we typically recommend a $2-$4 ROAS benchmark as a starting point. B2B companies are typically on the lower end of that, whereas a B2C or high-volume B2B should be on the higher end.

We use simple rules to evaluate ads—if they meet our criteria, we keep them, and if they don’t we cut them. Brutal.

To help us understand performance, we look at conversions and qualified conversions. A qualified conversion is defined as a hand raiser (ex. demo request) with a good+ (>70/100) fit. We know that qualified conversions convert to 3x the revenue of a normal conversion, so we strongly recommend using qualified conversions as a goal.

Ads with >$2 ROAS for qualified conversions, we keep.

Ads with <$2 ROAS for qualified conversions, we cut.

2. Enough Clicks

Ensure ads drive sufficient traffic so their effectiveness can be assessed. This depends on the scale of the business, but we typically set a threshold of >100 clicks in the last 2 weeks.

Example

As an example, Ad 1 brings qualified conversions at $3,000 each. Each qualified conversion brings us about $6,000 in closed won revenue. This is a great sign. Ad 1 has also had 200 clicks in the past two weeks. Therefore, we’ll keep Ad 1.

To operationalize qualified conversions, check out our documentation here.

Need more Technical Documentation?

Head over to our Zendesk and find information regarding integrations, scoring details, and more.

View Documentation
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