ROAS (Return on Ad Spend)
The amount of revenue generated for every dollar spent on a specific advertising campaign. Tells you if a particular ad is profitable.
ROAS (Return on Ad Spend) is a core digital marketing performance metric that calculates the gross revenue generated for every dollar spent on paid advertising.
The Formula
ROAS = (Revenue Attributed to Ads / Total Ad Spend)
For instance, generating $5,000 in sales from a $1,000 ad campaign equals a 5:1 ROAS (or 500%).
ROAS vs. ROI
While ROAS evaluates gross revenue strictly against ad spend, Return on Investment (ROI) accounts for cost of goods sold (COGS), software subscriptions, overhead, and team salaries to assess genuine net profit.