Return on Ad Spend (ROAS)

Return on Ad Spend (ROAS) is a key performance indicator used in advertising to measure the profitability of an advertising Campaign. It calculates the amount of revenue generated for every dollar spent on advertising. The formula is:

ROAS = (Revenue Generated from Ad Campaign / Cost of Ad Campaign)

A ROAS greater than 1 means the campaign is generating more revenue than it costs. For example, a ROAS of 4:1 means that for every $1 spent on advertising, $4 in revenue was generated. ROAS helps advertisers understand the direct financial impact of their ad spend and optimize campaigns for better profitability. It's a more specific version of Return on Investment (ROI) focused solely on ad expenditure.