What is ROAS?

Return on Ad Spend (ROAS) is a marketing metric that measures the revenue generated for every dollar spent on advertising. Along with Cost Per Acquisition (CPA), it helps businesses evaluate the effectiveness of their advertising campaigns and make data-driven decisions about their marketing investments.

ROAS is particularly important for digital marketers and e-commerce businesses as it provides a clear picture of advertising efficiency across different channels and campaigns. Use our Budget Allocator to optimize your spending based on ROAS performance.

How to Calculate ROAS

To calculate ROAS, divide your total revenue from advertising by your total advertising spend. Use our Daily Budget Calculator to plan your campaign spending effectively:

ROAS Formula

The basic ROAS formula is:

For example, if you spent $1,000 on advertising and generated $5,000 in revenue:

What is a Good ROAS?

A good ROAS depends on your industry and business model, but generally:

• 4:1 (4x) or higher - Excellent performance
• 3:1 to 4:1 - Good performance
• 2:1 to 3:1 - Average performance
• Below 2:1 - Needs improvement (consider reviewing your CPM rates and campaign targeting)

ROAS Calculator

Advanced ROAS Calculator (Multi-Channel)

Campaign Assumptions

When calculating ROAS, consider these important factors:

• All revenue is attributed to advertising efforts
• Attribution windows are properly set (use our UTM Builder for accurate tracking)
• Indirect revenue effects are not included
• Time periods match for spend and revenue (plan with our Campaign Scheduler)

Calculation Example

Here's a practical example of calculating ROAS across multiple channels:

ROAS Analysis

When analyzing your ROAS, consider:

• Industry benchmarks and competition
• Profit margins and business model
• Customer lifetime value
• Seasonal variations (plan with our Campaign Scheduler)
• Campaign objectives
• Creative performance (validate with our Creative Specs Checker)