Return on ad spend (ROAS) is a marketing metric that measures the revenue generated for every dollar spent on advertising. It is calculated by dividing revenue from ads by the cost of those ads.

For example, if a campaign generates $10,000 in revenue from $2,000 in ad spend, ROAS is 5:1, or $5 for every $1 spent. ROAS helps marketers evaluate campaign profitability and allocate budgets. It differs from ROI, which accounts for all costs, not just ad spend.

Key points

• Revenue per dollar of ad spend
• Calculated as revenue ÷ ad cost
• Used to evaluate campaigns
• Distinct from ROI