Return on Ad Spend (ROAS)
ROAS (Return on Ad Spend) measures how much revenue you earn for every dollar spent on advertising. A ROAS of 4 (or 400%) means you made $4 in revenue for each $1 of ad spend. It's the headline efficiency metric for most performance campaigns.
Formula
ROAS = Revenue from ads ÷ Ad spendExample
If a campaign spent $2,000 and generated $9,000 in tracked revenue, ROAS = 9,000 ÷ 2,000 = 4.5x.
Why it matters
ROAS tells you whether a campaign is making or losing money before overhead. Note it uses revenue, not profit — a profitable ROAS depends on your margins, which is why many advertisers also track a break-even ROAS and true (profit-based) ROAS.
Put these metrics to work
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FAQ
What is a good ROAS?
It depends on your margins. A common rule of thumb is 3–4x for e-commerce, but a business with thin margins may need 6x+ to be profitable, while a high-margin SaaS product can win at 2x. Calculate your break-even ROAS (1 ÷ profit margin) first.
What's the difference between ROAS and ROI?
ROAS compares revenue to ad spend only. ROI compares profit to total cost. ROAS of 4x can still be unprofitable once product costs, shipping and overhead are included — ROI accounts for all of it.