What is ROAS (Return on Ad Spend)?
Revenue generated for every dollar spent on advertising.
Definition
ROAS measures the revenue generated per dollar of ad spend. A 4x ROAS means every $1 spent generates $4 in revenue. It's the primary metric for evaluating campaign profitability. Breakeven ROAS depends on your margins — a product with 70% margins breaks even at 1.43x ROAS, while 30% margins require 3.33x. Platform-reported ROAS uses attribution windows (typically 7-day click, 1-day view on Meta) and may differ from actual business results.
Example
A brand's Meta campaigns show 4.2x ROAS on $50,000 monthly spend, generating $210,000 in attributed revenue. With 60% gross margins, the $50K spend nets $76,000 in gross profit after ad costs.
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