ROAS (return on ad spend)
ROAS is revenue attributed to advertising divided by the amount spent on it — a measure of how much revenue each unit of ad spend returned.
A ROAS of 4.0 means four dollars of revenue for every dollar spent. It is the standard efficiency metric in performance marketing, but it compares revenue to spend, not profit to spend, so a healthy ROAS can still lose money.
The number that makes ROAS interpretable is break-even ROAS, which is one divided by gross margin. Below that line every sale loses money regardless of how large the ROAS looks; above it is where real return begins.
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