ROAS
DefinitionROAS (return on ad spend) is the revenue a campaign brings in divided by what it cost. It tells you how many euros of revenue you get back for every euro spent on ads.
How it works
The ad platform counts the purchases it credits to your ads and adds up their value, then divides that revenue by your spend over the same period. You’ll see ROAS written as a number (4.0) or a percentage (400%), and both mean the same thing. Every tool credits sales in its own way, so the same campaign will usually show a different ROAS in Meta Ads, Google Ads and GA4. That’s why we only compare ROAS within one source and one period.
- Campaign revenue
- €10,000
- ÷Ad spend
- €2,500
- =ROAS
- 4.0 (400%)
Every euro spent on ads brought in €4 of revenue. Figures are illustrative.
What it means for you
The example shows how much the campaign sold. To know how much it earned, you need your margin, because that’s what the business actually lives on. A campaign’s break-even ROAS is 1 divided by the margin. At a 30% margin you break even at a ROAS of 3.33, so the 4.0 above leaves €500 in profit. At a 20% margin, the same result is a loss. When the margin is built into the metric itself, it’s called POAS.
From our accounts
In online shops, we often find that the campaign with the highest ROAS in the account mostly sells the lowest-margin products. Optimising for revenue rewards whatever is easiest to sell. Once products are grouped by margin, that campaign’s ROAS usually drops and profit goes up.
In an account audit, we work out the ROAS and break-even point for every campaign.
Ad account audit