What is ROAS (Return on Ad Spend)?

ROAS (Return on Ad Spend) is advertising revenue divided by ad spend. It shows how much money each dollar of spend generates before subtracting spend. Common in e-commerce, mobile apps with IAP, and “Maximize conversion value” bidding.

Formula

ROAS = Ad-attributed revenue ÷ Ad spend. ROAS 2.0 = $2 revenue per $1 spent. Target ROAS in Google/Meta bids the algorithm toward a set ROAS.

ROAS and ROI

ROI = (ROAS − 1) × 100% when only ad spend is in cost. ROAS 1.2 = ROI 20%. Other costs lower ROI at the same ROAS.

In arbitrage

CPA networks pay fixed payouts—buyers often use ROI/EPC. ROAS matters with % of sale (CPS, revshare), Shopify/e-commerce offers, and CRM-sourced revenue. Postbacks must pass order value for correct tracker ROAS.

Limitations

ROAS without approval, refunds, and chargebacks overstates results. Attribution windows differ between ad account and tracker. For subscriptions, LTV matters more than day-one ROAS.

See also: ROI, e-commerce vertical, CPA, conversion.