What is ROAS (return on ad spend)?

ROAS is the revenue earned for every dollar spent on advertising.

It is calculated as revenue from ads ÷ ad spend. A ROAS of 4 means $4 of revenue for each $1 spent.

Whether a ROAS is profitable depends on margin: with a 40% gross margin, the break-even ROAS is 2.5.

Related terms

CPL / CPA (cost per lead or acquisition) PPC (pay-per-click)
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More PPC terms

Full glossary
PPC

PPC (pay-per-click)

PPC is online advertising where you pay each time someone clicks your ad.

 PPC

CPC (cost per click)

CPC is the amount you pay for each click on an ad.

 PPC

CTR (click-through rate)

CTR is the percentage of people who click a link or ad after seeing it.

 PPC

Conversion rate

Conversion rate is the percentage of visitors who complete a goal, such as submitting a form, calling or buying.
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