ROAS (Return on Ad Spend)

Return on ad spend (ROAS) measures how much revenue a campaign generates per unit spent on ads. It is expressed as a ratio, such as 4:1, or a multiple, such as 4x.

Why it matters

ROAS lets you compare campaigns and decide where to spend more. It is simple, but it uses revenue rather than profit, so a good-looking ROAS can still lose money after product costs, shipping and fees.

Many teams also track MER or blended ROAS across all channels, because platform-reported ROAS often claims credit for the same sale.

Example

Ad spend:        $1,000
Revenue:         $4,000
ROAS:            4000 / 1000 = 4.0 (4x)

Gross margin:    30%
Gross profit:    $1,200
Net after ads:   $200

The break-even ROAS here is 1 / 0.30, about 3.33.

Common mistakes

Treating ROAS and ROI as the same; ROI includes all costs.
Using attributed revenue that double-counts across channels.
Setting a target ROAS without knowing your margins.

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