Metrics > Return on Ad Spend
Return on Ad Spend (ROAS)
Definition: Return on Ad Spend (ROAS) measures the revenue generated for every dollar spent on advertising.
Formula:
ROAS = Revenue from Ads / Ad Spend
Why It Matters:
A high ROAS means your advertising strategy is effective. Low ROAS may indicate wasted ad spend.
How to Improve:
- Target high-value customers
- Use A/B testing to improve ad creatives
- Optimize bidding strategies to reduce CPC & CPA
Relevant Integrations:
Example Calculation:
If a company spends $500 on ads and generates $2,500 in sales, ROAS is:
ROAS = 2500 / 500 = 5x (500%)