Return on ad spend (ROAS)

A ROAS of 4 (often written 400%) means every dollar of spend came back as four dollars of recorded revenue. It suits e-commerce and any business where conversions carry different values. Product costs, shipping, returns and fees all come out of that revenue, so a healthy-looking ROAS can still lose money. It is also only as accurate as the conversion values you send.

Where you'll see it

In Google Ads, ROAS is the column "Conv. value / cost" (Columns > Conversions); it is the basis for the Target ROAS option in Maximize conversion value. Meta Ads Manager shows "Purchase ROAS (return on ad spend)" when purchase values are tracked, and TikTok Ads Manager reports "Purchase ROAS" (or the value-based ROAS for the chosen event).

Worked example$2,500 spend, $11,250 in purchases

ROAS = $11,250 ÷ $2,500 = 4.5 (450%).

Gross margin	Gross profit	Profit after ad spend
30%	$3,375	$875
20%	$2,250	−$250

Same ROAS: one month earns money, the other loses it.