What is ROAS? (Return on Ad Spend)
ROAS measures how much revenue you earn for every dollar spent on advertising. It is the core efficiency metric for paid campaigns.
Formula
ROAS = Revenue ÷ Ad Spend
Example
If you spend $1,000 on Google Ads and generate $4,000 in revenue, your ROAS is 4.0x — $4 back for every $1 spent.
Why ROAS matters
ROAS tells you whether a campaign is directionally efficient, but it ignores product and operating costs — so a high ROAS can still lose money at thin margins. Compare it against your break-even ROAS (1 ÷ profit margin).
What's a good ROAS?
A 4:1 (4x) ROAS is a common e-commerce rule of thumb, but the right target depends entirely on your profit margin.