Vertical Financials
Marketing Metrics

ROAS (Return on Ad Spend)

Definition

Revenue generated for every dollar spent on a specific ad channel or campaign.

Formula

ROAS = Revenue from Ads ÷ Ad Spend

ROAS is the quick read on whether a campaign is bringing in revenue for what it costs. It is useful for comparing campaigns and channels against each other.

On its own it says nothing about profit, because it ignores product costs and fees, and platforms tend to take credit for sales they did not fully drive. Watch for: a ROAS that looks strong but sits below your break-even ROAS, which means ads are losing money.

Example

$12,000 in attributed sales from $3,000 in ad spend is a 4.0 ROAS.

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