Profit on ad spend

profit_on_ad_spend

Description: The profit the ads brought in, for each unit spent on them. Profit here is Expected contribution profit before ads. That means the order's share of Marketing spend is not taken off.
When to use: Use it to judge ads when products differ in margin and return rate. Return on ad spend divides Net sales by ad spend, so it misses both. Use Return on ad spend only when products earn about the same.
Formula: Expected contribution profit before ads, from the orders the ads brought in, divided by ad spend.

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