Marketing metrics glossary

What is ROAS? (Return on Ad Spend)

ROAS is the revenue you earn for every dollar of ad spend. It is the headline efficiency metric on Google Ads and Meta, the mirror image of ACOS, and the number most paid-media clients judge an account on.

ROAS = Ad revenue ÷ Ad spend

How to read ROAS

ROAS is expressed as a multiple: a 4x ROAS means you earned $4 in ad-attributed revenue for every $1 spent. Higher is better. Spend $1,000 to make $4,000 and ROAS is 4x; make $6,000 and it is 6x. Unlike ACOS, "up" is the good direction, which is why a report that mixes the two should label each clearly.

What counts as a good ROAS?

Good ROAS is whatever clears break-even for your margin. If you keep 25% after costs, you break even near a 4x ROAS: below it you lose money on the ad sale, above it you profit. A widely-quoted ecommerce target is 3x to 4x, but a brand buying market share may accept less, and a lean-margin product may need more. The number only means something next to margin.

ROAS and ACOS are the same thing

ROAS and ACOS are inverses: ROAS = 1 ÷ ACOS as a ratio. A 25% ACOS is a 4x ROAS; a 50% ACOS is a 2x ROAS. Amazon reports ACOS, Google and Meta report ROAS, so an agency running all three benefits from a report that shows both without the client having to convert in their head.

How to improve ROAS

Related metrics

ACOSTACoSGoogle Ads reporting

AgencyReportr pulls ROAS, spend and conversions from Google Ads, Meta and Amazon into one branded, client-ready report, recomputed from the real totals, never a wrong average.

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FAQ

ROAS questions

How do you calculate ROAS?

ROAS is ad-attributed revenue divided by ad spend. Spend $1,000 and generate $4,000 in ad sales and your ROAS is 4x, sometimes written 400%. It is the inverse of ACOS: a 4x ROAS is the same as a 25% ACOS. Because it is a return, higher is better, the opposite of ACOS, where lower is better.

What is a good ROAS?

A good ROAS is one that clears your break-even, which depends on margin. If your product margin is 25%, you break even at roughly a 4x ROAS; above it you profit, below it you are buying volume or rank on purpose. A common rule of thumb for ecommerce is 3x to 4x as a healthy target, but the honest answer is that "good" is always relative to margin and goal, not an absolute number.

ROAS vs ACOS: which should a report use?

They are the same efficiency measured two ways, so it depends on the channel and the audience. Google Ads and Meta lead with ROAS; Amazon leads with ACOS. A cross-channel agency report is clearest when it shows both, or converts to whichever the client is used to, so the number never needs a mental flip to compare campaigns across platforms.