What Is ROAS?
ROAS, or Return on Ad Spend, measures the revenue attributed to advertising compared with the amount spent on those ads.
How to Calculate ROAS
For example, $4,000 in revenue from $1,000 in ad spend equals 4.00x ROAS, or 400%.
ROAS Calculation Example
If you spend $1,000 and generate $4,000 in attributed revenue, your ROAS is 4x. That means every $1 of ad spend produced $4 in revenue.
What Is a Good ROAS?
There is no universal good ROAS. Your required ROAS depends on product margin, fees, fulfillment costs, returns and profit goals. Use the Break-Even ROAS Calculator to find the minimum ROAS your business needs.
ROAS vs ROI
ROAS focuses specifically on revenue generated relative to advertising spend. ROI typically considers profit relative to a broader investment or total cost base.
Frequently Asked Questions
What does 4x ROAS mean?
A 4x ROAS means you generated $4 in attributed revenue for every $1 spent on advertising.
Is a 2x ROAS good?
It depends on your margins and costs. A 2x ROAS can be profitable for one business and unprofitable for another.
How do I calculate ROAS?
Divide revenue attributed to advertising by advertising spend.
What is the difference between ROAS and ROI?
ROAS compares ad-attributed revenue with ad spend. ROI generally compares profit with the total investment or cost.
How do I calculate break-even ROAS?
Your break-even ROAS depends on contribution margin and other unit economics. Use the Break-Even ROAS Calculator to calculate your own threshold.