ROAS, or Return on Ad Spend, is a marketing metric measuring the revenue earned for every dollar spent on advertising.

What does ROAS mean?

Return on Ad Spend (ROAS) is a crucial metric used in digital marketing to assess the effectiveness of advertising campaigns. It calculates the total revenue generated from advertising efforts relative to the cost of those ads. ROAS helps marketers understand which campaigns are successful in terms of generating sales and contributes to making informed decisions about ad spend.

Abbreviation	Meaning	Using by	Year coined
ROAS	Return on ad spend	Advertisers	Early 2000s

Examples of ROAS

Example 1:

If a company spends $1,000 on an online advertising campaign and generates $5,000 in revenue from that campaign, the ROAS is 5:1. This means for every dollar spent, the company earned five dollars in return.

Example 2:

A business invests $2,000 in a social media ad campaign, which results in sales worth $10,000. The ROAS for this campaign is 5:1, indicating a high return on the investment.

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