What is ROAS? Advertising and Marketing ROAS Explained for Beginners

What is ROAS? ROAS stands for Return On Ad Spend. The definition of ROAS is ad revenue earned based on total advertising spend. Essentially, you are looking for your total revenue driven by an ad campaign and you want to compare it to your spend during the advertising campaign. It is important to monitor and compare your ROAS so you can see how your ads are performing through Google Ads, Microsoft Advertising, Facebook Ads, Twitter Ads, LinkedIn Ads, and more.

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Example: Surfside PPC runs an advertising campaign. I spend $10,000 and drive $20,000.

What is my ROAS?

ROAS = (Ad Revenue/Ad Spend) x 100%
Ad Revenue: $20,000
Ad Spend: $10,000
ROAS = 200%

What is a Good ROAS?: It depends on your Profit Margin.

Example:

If your profit margin is 50%, then the ROAS of 200% from the previous example means you break even. Your ROI would be 0%.