Understanding ROAS vs ROI in the Visitor Attraction Industry

In the bustling world of the visitor attraction industry, where every smile, thrill, and unforgettable memory counts, making the most of your marketing efforts is crucial.

Two key metrics to measuring digital ad spend are, Return on Ad Spend (ROAS) and Return on Investment (ROI). Understanding the differences between them can open the door to sustainable growth and success in this dynamic sector.

Both ROAS (Return on Ad Spend) and Return on Investment (ROI) are essential metrics in the visitor attraction industry, each offering unique perspectives on marketing effectiveness.

Striking the right balance between short-term ROAS-driven campaigns and long-term ROI-focused investments is key to sustainable growth and success.

Explaining ROAS and ROI

Return on Ad Spend (ROAS)

ROAS measures how much revenue is generated compared to the cost of that advertising. It calculates how much income you earn for each pound spent on advertising.

The formula for ROAS is:

ROAS is particularly relevant for visitor attractions, where marketing campaigns often directly translate into ticket sales or bookings.

For example, a theme park investing in a digital marketing campaign to promote a new ride can use ROAS to evaluate the revenue generated from ticket sales attributed to that campaign.   

Working with so many different visitor attractions at Agility, we also understand what ‘good’ and ‘excellent’ looks like to provide a benchmark.

While ROAS and ROI are similar, ROAS is specifically focused on advertising effectiveness, providing insights into the direct impact of advertising efforts.

Return on Investment (ROI)

ROI looks at the overall profitability of any marketing investment.  It compares the revenue generated against all costs incurred, including ad spend, creative production, and any associated expenses.

The formula for ROI is:

While metrics like ROAS offer valuable insights into campaign performance, ROI is essential for understanding the overall effectiveness of your marketing investment.

With ROI you’d look at a longer period to determine if your campaigns are delivering a positive overall return.  For example, you’d include video production, agency marketing fees etc.

ROI is also a great marketing tool for comparing different sections of your marketing budget to assist budget planning in future years. 

Other Analytical Marketing Explained

Evaluating your marketing performance has endless possibilities in digital marketing.  Below we explain the relevance of a few other useful metrics.

Attribution Modelling

Attribution modelling is a term often used by advertising platforms.  We all know that most ad conversions rarely come on their first ad interaction.  Attribution modelling is a fairer way to record which campaign worked best.

Attribution modelling works by attributing a percentage of the conversion across the various touchpoints, enabling the improved evaluation of the campaign

Lifetime Value (LTV) of Customers

For Visitor Attractions in regional areas, many zoos, stately homes and theme parks rely on repeat business.

Lifetime value of a customer looks beyond measuring the immediate impact of the advertising cost to acquire them.  It considers the long-term value of customers.

LTV measures the revenue generated from a customer over the entire duration of their relationship with your attraction.

By analysing the LTV of customers acquired through digital advertising channels, you can make informed decisions about customer acquisition costs.  You may decide that you are willing to pay more to attract a certain type of customers, who will also purchase tickets to your Christmas Experience for example.

Ad Creative Performance

While metrics like clicks and conversions provide quantitative data, assessing the qualitative aspects of ad creatives is equally important.

You should monitor metrics such as ad engagement rates to help evaluate the effectiveness of your ad content.

Testing different creatives and messaging variations can also provide valuable insights into what resonates best with your target audience and inform future creative decisions.

Finding the Balance

Whichever metrics you use, comparing them overtime in a consistent way is vital to understand trends.   With so much data available, less is more. Be focussed about what you collect and ensure it is driving marketing decisions for your visitor attraction.

Agility Marketing are a specialist marketing agency for the visitor attraction sector.

Written by Esther Felix-Awosope (marketing manager) | Posted 22/08/2024