ROAS (Return on Ad Spend)
The revenue generated for every dollar spent on advertising. A ROAS of 4x means $4 revenue per $1 ad spend.
ROAS = Revenue from Ads / Ad SpendWhat is ROAS?
Return on Ad Spend (ROAS) measures the revenue earned for every dollar invested in advertising. It's the primary metric for evaluating ad campaign performance.
ROAS vs. ROI
ROAS only considers ad spend and revenue. ROI accounts for all costs (COGS, shipping, overhead). A campaign with a 4x ROAS might have a negative ROI if margins are thin.
What's a Good ROAS?
This depends on your margins. A business with 70% gross margin can be profitable at 2x ROAS. A business with 30% gross margin might need 5x+ ROAS to break even on ad spend.
The Problem with ROAS
Most ad platforms report ROAS based on revenue, not profit. Shopimize shows you profit-based ROAS — the metric that actually matters.
You spend $1,000 on Facebook ads and generate $4,500 in revenue. ROAS = $4,500 / $1,000 = 4.5x.
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