Return On Ad Spend
What is Return On Ad Spend (ROAS)?
Return on ad spend (ROAS) is a key metric that measures the revenue generated for every dollar spent on advertising. ROAS is used by advertisers to assess the effectiveness and profitability of their advertising efforts.
How to Calculate ROAS?
To calculate ROAS, divide the total revenue generated from an ad campaign by the total cost of the ad campaign.
ROAS = Revenue Generated / Ad Campaign Cost
For example, if an advertiser spends $10,000 on an ad campaign and generates $50,000 in revenue, the ROAS would be:
ROAS = $50,000 / $10,000 = $5
For every $1 spent on this example ad campaign, $5 in revenue was generated.