Return on Ad Spend (ROAS)
The revenue generated for every dollar spent on advertising, measuring the effectiveness of ad campaigns.
Why it matters
ROAS is the bottom line of advertising performance. It tells you directly whether your ad campaigns are profitable and which channels deserve more budget.
Formula
Divide the total revenue attributed to your ad campaign by the total amount spent on that campaign. A ROAS of 4 means $4 revenue per $1 spent.
Calculator
What's a good ROAS?
Break-even: ~2:1 (accounting for COGS). Good: 4:1. Excellent: 6:1+. Below 2:1 is typically unprofitable.
Related metrics
CPC
MarketingThe average amount you pay each time someone clicks on one of your ads.
CPA
MarketingThe average cost to acquire one paying customer through a specific marketing channel or campaign.
CVR
MarketingThe percentage of visitors or leads who complete a desired action, such as making a purchase or signing up.