ROAS

Return on Ad Spend: the revenue earned for each unit of currency spent on advertising.

Core MetricsTerm 29 / 81

Formula

ROAS = Revenue from ads ÷ Ad spend

In practice

ROAS is measured on revenue, not profit; a high ROAS can still lose money on a low-margin product. Work out your break-even ROAS from gross margin and set the target above it.

Once the terms are clear, build the system.

Let’s pin down which metrics your company should watch and which lever to pull first.

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