Return on ad spend answers a narrow question: how much attributed revenue did advertising produce relative to media spend?
The formula
ROAS = revenue attributed to ads ÷ advertising spend
A campaign with $50,000 attributed revenue and $10,000 spend has a 5× ROAS. The same result can be shown as 500%, but CalcMotive uses the multiplier because it is common in campaign reporting.
Align the inputs
Revenue and spend must cover the same campaigns, markets, currencies and attribution window. A platform may continue assigning conversions after the campaign has stopped, so a same-day export can be incomplete.
Use revenue net of cancellations and refunds when the data is available. Document whether taxes and shipping income are included.
Compare ROAS with economics
ROAS ignores product cost and operating expense. Calculate break-even ROAS from gross or contribution margin, then leave an additional buffer for overhead and profit. A campaign above break-even can still have poor cash flow or weak incrementality.
Reporting checklist
- State the platform and attribution window.
- Separate prospecting and remarketing where useful.
- Reconcile platform revenue with store or finance data.
- Compare cohorts over consistent time periods.
- Review ROAS together with CAC, contribution margin and new-customer volume.
Sources
This guide is educational and does not provide financial, accounting, tax or legal advice.