ROAS (Return on Ad Spend) measures how much revenue your ads generate compared to the amount spent. It’s a direct indicator of ad profitability.
ROAS = Revenue from Ads ÷ Ad Spend
Example: If you earned $1000 in revenue from $200 of ad spend, your ROAS is 5x (or 500%).
ROAS helps you understand which campaigns are profitable, identify wasted spend, and allocate budgets toward high-performing ads.
It depends on your business model, but generally, a ROAS above 400% (4x) means your campaigns are performing well and generating healthy returns.
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