ROAS, or return on ad spend, is the revenue earned for every unit of currency spent on advertising, expressed as a ratio — a 4x ROAS means $4 of revenue for every $1 spent.
In depth
ROAS measures a campaign’s gross efficiency, not its profit. Whether a given ROAS is good depends entirely on your margin: your break-even ROAS is 1 ÷ gross margin, so a 40% margin needs 2.5x just to cover costs.
Example
A campaign spends $2,000 and generates $8,000 in revenue, so ROAS = 8,000 ÷ 2,000 = 4x. Profitable at a 40% margin (break-even 2.5x); a loss at a 20% margin (break-even 5x). ROAS alone never tells you which.
Related terms
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