What Is ROAS in Advertising? (Insurance)

Return on Ad Spend (ROAS) is one of the most important metrics for measuring the success of your insurance marketing campaigns. Whether you sell auto, home, life, health, or travel insurance, ROAS tells you exactly how much revenue your ads generate compared to what you spend.

How ROAS is calculated

The formula for ROAS is straightforward:

ROAS = Revenue from Ads ÷ Cost of Ads

For example, if you spend $1,000 on Facebook Ads for auto insurance and generate $4,000 in new policy revenue, your ROAS is 4:1. This means you earned four dollars for every dollar you invested in ads.

Why ROAS matters for insurance providers

ROAS tells you whether your ad campaigns are profitable. A high ROAS means your targeting, messaging, and offers are converting prospects into policyholders efficiently. A low ROAS means you may need to refine your audience, improve your creatives, or adjust your offer.

What is a good ROAS for insurance ads?

ROAS benchmarks in the insurance industry depend on policy type and customer lifetime value (CLV):

• Auto insurance: 3:1 to 5:1 is common due to competitive markets.
• Homeowners insurance: 4:1 to 6:1 is achievable with targeted campaigns.
• Life insurance: Even a 2:1 ROAS can be highly profitable because of long-term premiums.

How to improve ROAS for your insurance campaigns

1. Target high-intent prospects: Use keywords like “compare life insurance quotes” or “best auto insurance near me.”
2. Highlight unique selling points: Show why your coverage, pricing, or service is better than competitors.
3. Leverage retargeting: Follow up with prospects who visited your site but did not request a quote.
4. Streamline the sign-up process: Make it quick and easy for prospects to request a quote or purchase a policy.

The bottom line for insurance advertising

ROAS is the clearest measure of whether your ad spend is generating profitable policies. By tracking it closely and optimizing your targeting, creatives, and conversion process, you can ensure that every dollar spent on ads drives meaningful growth for your agency.

Want to increase your ROAS and write more profitable policies? Contact us for an insurance marketing strategy session.