What is blended ROAS?

To understand what “Blended ROAS” means, we first need to define what ROAS is.

ROAS is one of those terms that is hard to avoid when discussing digital marketing.

Read about other marketing terms in my digital dictionary here.

Simply put, ROAS stands for “return on ad spend” – in other words, the revenue you generate from the amount of money invested in marketing.

A basic example:

• Spend on Google Ads: 10,000 DKK
• Revenue attributed to Google Ads: 50,000 DKK
• ROAS: 50,000 / 10,000 = 5

In the example above, the result is a ROAS of 5. However, this is a simplified example, as it doesn’t take factors like VAT into account.

ROAS is a simplified way to measure your marketing efforts and is a concept you’ll often encounter when working with online marketing.

What is blended ROAS?

Now that we understand what ROAS stands for, we can dive into Blended ROAS.

Blended ROAS represents the total revenue compared to the total spend across all of a company’s marketing activities.

Let’s look at another simple example:

• Spend on Google Ads: 10,000 DKK
• Spend on META Ads: 5,000 DKK
• Spend on Pinterest Ads: 5,000 DKK
• Total revenue: 150,000 DKK

In this case, the total spend across channels is 20,000 DKK, and the total revenue is 150,000 DKK.

The Blended ROAS would therefore be (150,000 / 20,000) = 7.5.

In other words, the company earns 7.5 DKK in revenue for every 1 DKK invested across marketing channels.

This way, Blended ROAS gives you an overall impression of your total revenue without being specific about data from each individual marketing channel.

What can blended ROAS contribute with?

Blended ROAS provides a holistic view of how your total revenue responds to your total marketing spend across channels.

As of 2023, accurately attributing sales to specific marketing channels is increasingly difficult. That’s why it can be useful to look at the bigger picture to assess the overall performance of your business.

Blended ROAS is generally a solid metric to maintain an overview of your marketing efforts.

However, it becomes truly interesting when you begin testing your Blended ROAS by adjusting the allocation of your spend across individual marketing channels.