Return on Ad Spend (ROAS)

Return on Ad Spend (ROAS) measures how much revenue a business earns for each dollar spent on advertising. It’s calculated by dividing the revenue generated from ad campaigns by the amount spent on those ads. For example, if you spend $100 on ads and make $500 in sales, your ROAS is 5:1, meaning you earned five dollars for every dollar invested. ROAS helps businesses evaluate the effectiveness of their advertising efforts, ensuring that advertising investments are generating profitable sales and guiding decisions on budget allocation.