How much revenue does each dollar of advertising produce? Return on ad spend, or ROAS, answers that question. It is calculated by dividing the revenue attributed to advertising by the cost of that advertising. A ROAS of 4 means that four dollars of revenue were generated for every dollar spent on ads.

ROAS is a direct measure of advertising efficiency. It is widely used in digital channels where tracking from click to purchase is possible. Attribution models affect the calculation: last-click attribution gives all credit to the final ad; multi-touch models spread credit across the journey. The choice of model can change the reported ROAS substantially.

A high ROAS is desirable, yet it must be interpreted in context. Some campaigns aim for awareness rather than immediate sales; their ROAS will look low even if they contribute to long-term value. Setting target ROAS levels and optimizing campaigns toward them is a core practice in performance marketing. The metric keeps the focus on economic return rather than on vanity measures of reach or clicks.