What Is ROAS (Return on Ad Spend)?
Return on ad spend (ROAS) measures the revenue generated for every unit of currency spent on advertising. It is calculated by dividing revenue attributed to ads by the ad spend, and is often expressed as a ratio such as 4:1 or as 400%.
ROAS vs. ROI
ROAS uses revenue; ROI uses profit after all costs. A campaign can have a high ROAS but a low ROI if margins are thin.
Break-Even ROAS
Break-even ROAS ≈ 1 ÷ profit margin. With a 25% margin, ads need a ROAS of 4 just to cover product costs.
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🔗 Related Terms
More Business & Sales Terms
- Accounts Payable
- Accounts Receivable
- Average Order Value (AOV)
- Balance Sheet
- Break-Even Point
- Burn Rate
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.