What is Ad Spend?
Ad spend is how much you pay to advertise your brand, products, and services. In this article, we’ll be talking about ads in the digital space. This includes any type of paid ad on social media, search engines, and display ads.
Ad spend is just one part of your overall marketing spend. Other marketing costs could be money spent on SEO, social media management, or marketing software subscriptions.
Tracking ad spend allows you to measure your key performance indicators (KPIs), such as:
- CPM (cost per mille/1,000 impressions)
- CPC (cost per click)
- CPA (cost per action)
- CPL (cost per lead)
- ROAS (return on ad spend)
All of these metrics are crucial if you want to know the impact of your advertising dollars on the business bottom line.
Ultimately, you should prioritize KPIs like ROAS and CPA because of how much they’re tied to your campaign’s return on investment. Metrics like CPM and CPC could be considered secondary KPIs.
In short, measuring ad spend helps you understand how effective your ad campaigns and strategies are.
How to Calculate Ad Spend
Your ad spend is calculated by adding the amount you’ve spent on paid ads across every platform and channel.
Once you have that number, you can use it to calculate your other KPIs like cost per lead, cost per action, and return on ad spend.
Why it’s Helpful to Keep Track Of
Ads give your brand visibility. They place your name at people’s fingertips, and they can significantly boost your sales and leads.