Minimum ROAS
Minimum ROAS in advertising operations is an indicator that shows the minimum recovery rate required to ensure profit.
By understanding this value, you can make decisions regarding bid adjustments, budget allocation, and ad delivery suspension based on data.
Since Minimum ROAS is calculated based on sales structure and gross profit margins, it is characterized by the ability to clearly set a 'line that must not be crossed' that depends on the business model rather than intuition.
Adjusting CPC is highly difficult
Managing CPC is more difficult than one might imagine.
In theory, if you were to stay glued to your PC and check bidding status every hour, fine-tuned adjustments would be possible, but this cannot be called a realistic operational method. Even for advertising agencies, complete manual operation is inevitably at a disadvantage compared to AI and ad optimization tools in terms of data touchpoints and reaction speed.
Therefore, the significance of introducing advertising tools lies in their ability to complement areas that cannot be handled by human labor and to manage bidding and delivery with higher precision.
Shirofune is not AI
The fact that Shirofune's mechanism is not 'AI' might be the first thing that surprises you.
Various functions such as automatic adjustment of Minimum ROAS, grouping features, and bid optimization are all composed of algorithmic processing.
Shirofune's foundation is built by systematizing the knowledge accumulated by multiple advertising operation professionals and implementing it as an algorithm. The high technical skill of the creators is evident in how they have quantified human experience and reflected it in operations in a reproducible form.
No. 1 domestic advertising operation tool
'Shirofune'
Minimum ROAS increases operational efficiency
While ROAS is an indicator that shows 'advertising cost relative to advertising revenue,' Minimum ROAS is a standard for defining the minimum line that must be maintained.
The mechanism is designed to automatically adjust CPC to adhere to this value.
Initially, I used it without fully understanding the mechanism, but since I started clearly being conscious of Minimum ROAS, it has become easier to grasp the balance of bidding between event periods and normal periods.
During events: Set CPC higher to ensure exposure
After events: Lower CPC to suppress advertising costs
Previously, I performed manual adjustments by targeting unit, but by utilizing Minimum ROAS, the required check frequency has decreased significantly. As a result, the burden of advertising operations has been reduced, allowing me to devote time and thought to other measures.
The reason why one wants to find the correct answer for CPC
When I first started advertising operations, I repeated trial and error while checking CPC every hour. It was a daily routine of looking at numerical fluctuations and considering, 'Is this okay?' or 'Should I raise it a little more?'
When CPC is low: Easier to target niche areas
When CPC is high: High possibility of intense competition and a red ocean
The process of searching for optimal values while reading these situations is, in a sense, analytical and interesting.
However, when other tasks piled up, the burden of spending time on CPC adjustments sometimes became significant.
From an ant's perspective to a bird's-eye view
When you check CPC in detail, you inevitably tend to focus on an ant's-eye view.
This is a state where your attention is concentrated on individual bids and numerical fluctuations, narrowing your perspective.
In this regard, tools like Shirofune play a role in raising your perspective and shifting you to a bird's-eye view.
By considering operations based on the allocation of total advertising costs, composition ratios, and budget management, you become able to oversee the performance of the entire store.
As a result, the range of measures you can take expands, and the accuracy of your operational decisions improves.
Ultimately, you cannot manage everything manually alone.
By adjusting automatically 365 days a year, 365 times a day, while only checking the necessary parts manually.
The value is created in this combination.
140% functions as the baseline value
The minimum ROAS is ultimately often set to 140%.
While 160% or 180% are sometimes adopted, 70-80% of overall operations stabilize at 140%.
I sometimes experimentally raise it to 200%, but there are few cases where results improve.
Currently, I am in the stage of determining the optimal line while verifying multiple values, and I would like to continue improving operational accuracy by adjusting the figures as needed in the future.
A quick book recommendation
Although not directly related to minimum ROAS or CPC operations,
the following book is also helpful for those who want to deepen their understanding of web marketing as a whole.