Return on Ad Spend (ROAS)

Marketing

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

ROAS = Revenue from Ads / Ad Spend

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

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Return on Ad Spend
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What's a good ROAS?

4:1 or higher

Break-even: ~2:1 (accounting for COGS). Good: 4:1. Excellent: 6:1+. Below 2:1 is typically unprofitable.

Related metrics

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