ROAS (Return on Ad Spend) shows how much revenue each unit of ad spend returned. For example, ROAS 5x means $1 of ads brought $5 of revenue.
Back to the knowledge baseROAS (Return on Ad Spend) is the ratio of ad spend to revenue. Formula: ROAS = revenue from ads ÷ ad spend. If you spend $1,000 and earn $5,000, ROAS = 5x.
ROAS is handy for comparing ad channels: which campaign returns more per dollar. But it isn't the full picture — revenue isn't profit; a high ROAS can still lose money at a low margin.
There's no universal number — it depends on margin and business model. In a high-margin service 3x can be profitable, while in low-margin retail 3x can lose money. Always read ROAS together with margin and CAC.
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