ROAS: Return On Ad Spend
Return On Ad Spend (ROAS) measures revenue from ads divided by ad spend, so you can see how efficiently ads generate revenue.
ROAS is not profit. Use it with gross margin and CAC, especially if you have fulfillment costs, returns, or long sales cycles.
Frequently Asked Questions
ROAS equals revenue attributed to ads divided by ad spend. Example: €2,000 revenue on €500 spend equals 4.0 ROAS.
It depends on gross margin and overhead. Many e-commerce businesses aim for 2x to 6x, while service businesses often treat ROAS as directional.
ROAS looks at ad spend versus revenue. ROI includes broader costs and profit, so it reflects business impact more accurately.
Attribution differences and tracking limits change reported revenue. Compare trends over time and validate with back-office data.
Not always. You may accept lower ROAS to grow new customers, then recover profit through repeat purchases and higher LTV.
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