What is ROAS?
ROAS is return on ad spend — the revenue generated for every dollar spent on advertising, usually expressed as a multiple.
ROAS is return on ad spend — the revenue generated for every dollar spent on advertising, usually expressed as a multiple.
Return on ad spend divides the revenue attributed to a campaign by what the campaign cost. Spend $2,000 and generate $8,000 in revenue and the ROAS is 4×. It is the standard headline measure of advertising performance and it is routinely misread.
The misreading is that ROAS is revenue, not profit. A 3× return sounds healthy and can be break-even or worse once the cost of delivering the work is counted — labour, materials, overhead. A business with a 30% gross margin needs a considerably higher ROAS than one selling a high-margin service to reach the same profit.
Attribution is the other complication. ROAS depends entirely on which conversions get credited to the campaign, and for local businesses a large share of the resulting work arrives as a phone call days later, often after a branded search. Accounts measured only on last-click conversions systematically understate ROAS and switch off campaigns that were working.
It is the number that tells you whether to spend more or stop, provided you read it as revenue rather than profit and know what is being counted as a conversion.
Comparing your ROAS to a benchmark. What counts as good depends on your margin, and a figure that is excellent for one business is a loss for another.
ROAS is part of paid advertising
Understanding the term is the easy half. The service page describes what the work actually involves, and the free assessment says whether it is the thing your business should be spending on next — which is frequently a different question.
Things that come up alongside it
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