ROAS
Return on Ad Spend
In one line
Return on ad spend (ROAS) is revenue divided by ad spend — the headline efficiency metric for performance campaigns where revenue can be tracked back to the channel.
Going deeper
ROAS is revenue attributed to ads divided by spend, expressed as a multiple (4.0x) or a percentage (400%). It usually sits at the top of any performance report.
Reading ROAS in isolation can be misleading. Revenue often excludes COGS, shipping, discounts and returns, so what you actually keep is materially less than the headline number. Each business has its own ROAS break-even point as a result.
Don't confuse ROAS with ROI. ROI is profit over investment, so it bakes in margin. ROAS is revenue over ad spend, so it does not. Reporting both separately keeps decisions honest.
Related terms
CPA
Cost per acquisition (CPA) is the average marketing spend required to generate one conversion — used to judge whether a channel or campaign is paying its way.
MarketingLTV
Lifetime value (LTV) is the estimated total revenue — or profit — a single customer is expected to generate over the entire relationship with your business.
MarketingCAC
Customer acquisition cost (CAC) is the total marketing and sales spend required to win one new paying customer.
MarketingAttribution Model
An attribution model is a framework for deciding how credit for a conversion is split across the different touchpoints a customer interacted with on the way there.
MarketingPaid Media
Paid media is any channel where you pay to be seen — search ads, display, social ads, video and OTT all fall under this umbrella.
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