Is Digital Advertising Worth It? Breaking Down ROI for Small Businesses 💪🏻
- Jeric Turga
- Apr 8
- 2 min read
Many small businesses hesitate to invest in digital advertising because of unclear return on investment (ROI). With so many advertising platforms and strategies available, it’s easy to wonder: Is digital advertising really worth it? The answer depends on how well you track and optimise your campaigns.
This guide breaks down how to measure ROI, key metrics to watch, and strategies to ensure your digital ads generate real value.
1. Understanding ROI in Digital Advertising
ROI is the profitability of your ad spend, calculated as:
ROI = (Revenue from Ads – Cost of Ads) ÷ Cost of Ads × 100
A positive ROI means your ads are generating more revenue than they cost, while a negative ROI indicates a loss.
2. Key Metrics to Track Digital Advertising Success
To determine if your ads are worth the investment, track these key metrics:
Return on Ad Spend (ROAS): Revenue generated per dollar spent on ads.
Cost Per Acquisition (CPA): How much it costs to gain a new customer.
Click-Through Rate (CTR): The percentage of people who click on your ad after seeing it.
Conversion Rate: The percentage of ad clicks that turn into actual sales or leads.
Customer Lifetime Value (CLV): The total revenue a business expects from a single customer.
3. How to Improve ROI on Digital Ads
If your ads aren’t delivering a strong return, consider these strategies:
✔ Refine Audience Targeting – Use interest-based and retargeting strategies to reach high-intent users.
✔ A/B Test Your Ads – Test different ad creatives, headlines, and CTAs to see what resonates.
✔ Optimise Landing Pages – Ensure landing pages match the ad message and encourage conversions.
✔ Adjust Your Bidding Strategy – Set the right bidding strategy to control costs and maximise conversions.
✔ Monitor & Adjust Regularly – Use analytics to track performance and tweak campaigns accordingly.
4. Real-World ROI Benchmarks
To understand what good ROI looks like, here are some industry benchmarks:
Google Ads: The average ROAS is 200% to 400% (meaning for every $1 spent, businesses earn $2-$4 back).
Facebook Ads: The average ROAS is 150% to 250%.
eCommerce businesses: Aim for a ROAS of 4:1 or higher for profitability.
5. When Digital Advertising May Not Be Worth It
Digital ads aren’t always the best investment for every business. If you have:
An unclear target audience – Without defined buyer personas, ads may reach the wrong people.
Low website conversion rates – If your website isn’t optimised, traffic won’t turn into sales.
No long-term strategy – Ads work best when part of a broader marketing plan.
Digital advertising can be worth it—if done strategically. Tracking the right metrics, optimising your campaigns, and understanding industry benchmarks will help you determine if your ad spend is delivering results. If you’re not seeing a strong ROI, tweak your strategy, refine targeting, and continuously test and adjust.