GMV and ROAS

What is GMV?

GMV (Gross Merchandise Value) is the total revenue generated by an advertiser from selling products attributed to ad interactions, such as impressions, clicks, or conversions, over a period of time. With Kevel, you have the flexibility to choose how you want to attribute GMV to your ad campaigns. GMV is often referred to as ad revenue, conversion value, transaction value, or similar terms.

How do I start tracking GMV?

You can track GMV on impressions, clicks, conversions, and custom events. To attribute GMV to a specific event, you need to append the query parameter gmv to the event tracking URL retrieved from the Decision API response. The value of the gmv parameter should be set as the GMV for that event. For example, adding &gmv=1.64 to the URL sets the GMV as $1.64 for the event. For more details, see this section on modifying revenue.

The recorded GMV will be included in the data shipping logs for that event, allowing you to track and analyze it. Additionally, GMV information will be accessible through the Real-Time Reporting API and in reports, providing you with comprehensive visibility into your GMV metrics.

What is ROAS?

ROAS (Return on Advertising Spend) is a metric used by advertisers to evaluate the effectiveness of their ad campaigns. It is calculated using the formula: ROAS = (Gross Merchandise Value / Advertising Spend) * 100.

To illustrate, let's consider an example: If an advertiser invested $1,000 in advertising spend (represented as Revenue in Kevel) to promote the purchase of a product, and the resulting gross merchandise value attributed to that ad spend amounts to $5,000, the ROAS would be calculated as ($5,000 / $1,000) * 100 = 500%.

ROAS provides insights into the revenue generated relative to the advertising investment and serves as a measure of campaign profitability.

How do I start tracking ROAS?

Since ROAS is a function of GMV/Revenue, as long as you are tracking both GMV and Revenue in Kevel you will see ROAS populate for Real-Time Reporting and Scheduled Reporting as well as within the Kevel UI on the Campaigns, Flights, Ads, and Advertisers screens.

Is this right for my use case?

Tracking ROAS (Return on Advertising Spend) and GMV (Gross Merchandise Value) is crucial for e-commerce and retail media use cases, where advertisers aim to directly influence conversions, purchases, or transactions. In Kevel, the Revenue metric tracks the advertiser's advertising expenses within a specific flight, while GMV helps assess the ad revenue attributed to the ads in that flight. ROAS provides a standardized metric to quantify the impact of advertising and allows for easy comparison across platforms.

Although ROAS and GMV are commonly associated with e-commerce and retail, they are applicable to any use case where the value of a conversion is tracked. For example, in a B2B scenario, an advertiser may run ads to promote event registrations. If the advertiser spends $50,000 on advertising and the total GMV from event registrations amounts to $100,000, the ROAS for promoting the event would be 200%.

Tracking ROAS and GMV provides valuable insights into the effectiveness and profitability of advertising efforts, regardless of the specific use case.