Glossary / Return on ad spend (ROAS)
What is Return on ad spend (ROAS)?
ROAS is the revenue an ad campaign produced for each dollar spent. Divide the campaign revenue by the campaign cost.
Spend 500 dollars on a campaign, earn 2,000 dollars from it, and your ROAS is 4, often written as 4x. It answers one question: how much came back for what went out.
ROAS uses revenue, which is why it is not the same as ROI. ROI takes the cost out first. A campaign at 4x ROAS can still lose money if the product carries a thin margin, so know your margins before deciding a number is good.
The revenue side depends entirely on your attribution settings. Change the window from 7 days to 30 and the same campaign reports a better ROAS without having sold a single extra unit. Only compare campaigns measured the same way.