ROAS (Return on Ad Spend)
Revenue earned for every dollar spent on ads. The scoreboard for whether paid marketing is working.
ROAS (Return on Ad Spend) measures how much revenue you earn for every dollar you spend on advertising. Spend $1,000 and generate $4,000 in sales, and your ROAS is 4:1, or 400%.
It's the clearest scoreboard for paid marketing — but it's only honest if two things underneath it are solid: your conversion rate and your attribution.
ROAS vs. profit
A common trap: a 3:1 ROAS sounds great, but if your product margins are 25%, you're actually losing money. Always judge ROAS against your break-even point, not against zero. And remember it only counts paid return — the compounding, unpaid returns of SEO and content never show up in a ROAS figure.
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