Return on Ad Spend (ROAS)
Return on Ad Spend, or ROAS, measures how much gross revenue your ads generated per unit of direct ad spend.
Divide ad-attributed revenue by ad spend. That is ROAS: your first indicator of whether campaign spend is paying off. Conventionally it belongs to conversion campaigns, where revenue can be tied directly to spend. Attribution decides how honest the number is, so know your window before you trust it.
Signal Type
Metric Role
Metric Type
The Formula
Worked example
Benchmarks and interpretation
Where the number actually comes from
When to use it
Common Mistakes
In the REACT framework
Conventional ROAS stops at conversion, which leaves most of marketing unaccountable. REACT extends it with Goal-aware ROAS: a return tracked for every ACCRA goal, from Awareness to Advocacy. Conversion campaigns use direct revenue. The other four goals use proxy value, because their payoff arrives differently. Every campaign is accountable, measured against the goal it was actually given.
Related metrics
Frequently Asked Questions
What is Return on Ad Spend?
Return on Ad Spend, or ROAS, measures how much gross revenue your ads generated per unit of direct ad spend. It judges conversion campaigns fast, and it should judge nothing else.
How do you calculate Return on Ad Spend?
Use the formula: ROAS = Gross Revenue from Ads ÷ Direct Ad Spend. Keep both inputs in the same reporting period and avoid mixing users, sessions, events, or customers unless the formula calls for it.
What data do you need for ROAS?
You need direct ad spend and gross revenue, pulled from the relevant connected sources and computed for the same period.
What mistakes should you avoid with ROAS?
Avoid applying revenue ROAS to awareness or retention campaigns, ignoring margin when setting targets, and letting attribution windows quietly decide which campaigns look brilliant.
When should marketers use ROAS?
Use ROAS for in-flight decisions on conversion-goal campaigns: which ads, audiences, and channels earn more budget this week. For any other goal, use a goal-aware ROAS built on proxy value, never conversion revenue.
What is a good ROAS?
Breakeven ROAS comes from your margin: a 3x ROAS on thin margins can lose money while 2x on fat ones profits. Compute your own floor before calling any number good.
Sources and methodology. ROAS formula and definition derive from standard marketing analytics practice and platform reporting conventions. REACTIQ360 harmonises source data from Ad platforms and marketing spend, CRM / ecommerce / billing, Harmonisation layer and applies a consistent same-period computation methodology.
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