epROAS
epROAS is another word for Profit ROAS, pROAS, and POAS. All describe the Profit Return on Ad Spend. The "e" stands for expected and takes the expected return rate of the products into account to tell a more accurate story about what the actual Profit Return the As Spend will yield in the end.
epROAS is Dema's version of the widely used acronyms POAS and pROAS.
epROAS = Net Gross Profit 2 / Marketing Spend
e stands for “expected” as in the expected returns.
P stands for profit, which in this case is Gross Profit 2.
Gross Profit 2 with expected returns is Net Gross Profit 2
That means that epROAS is as true as you can Profit Return On Ad Spend in real-time.
Read more about why ROAS can't be trusted and how epROAS solves it.
Related terms
Return on Ad Spend (ROAS)
Return on Ad Spend (ROAS) measures how much revenue you make for each dollar spent on advertising. ROAS has severe limitations when used in isolation, which can hurt a company's profitability and brand.
Gross Profit 2
Gross Profit 2 measures profitability after accounting for the costs and fulfillment costs associated with purchasing its products. Fulfillment costs include storage, order processing, packaging, and shipping expenses. Like Gross Profit 1, this figure does not consider the impacts of marketing or overhead costs such as rent, utilities, and salaries. Returned items are also not deducted in the calculation of Gross Profit 2.
Net Gross Profit 2
Net Gross Profit 2 is Gross Sales subtracted by returns, the cost of goods sold, and the fulfillment costs.
Wasted Ad Spend
Wasted Ad Spend refers to the marketing budget that was "wasted," i.e., which did not yield the desired result.
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