Formula
ROAS = Advertising revenue ÷ Advertising spendWhat ROAS tells you
Return on ad spend compares revenue attributed to advertising with the amount spent on that advertising. A result of 5× means the attribution system assigned five currency units of revenue to every one currency unit of media spend.
ROAS is a revenue-efficiency measure, not a profit measure. Product cost, fulfillment, payment fees, creative production and payroll can turn a positive ROAS into an unprofitable campaign.
Worked example
If a campaign receives $5,000 in ad spend and produces $25,000 in attributed revenue, its ROAS is 25,000 ÷ 5,000 = 5×.
Common mistakes
- Mixing revenue from one attribution window with spend from another.
- Comparing platform-reported ROAS values that use different attribution rules.
- Treating attributed revenue as fully incremental revenue.
- Using ROAS without comparing it with gross margin and break-even ROAS.
Assumptions
- Revenue and spend cover the same attribution window.
- ROAS excludes costs outside media spend.
Sources and methodology
CalcMotive publishes the formula and assumptions so you can decide whether the estimate fits your use case. See our methodology standards.