What is return on ad spend (ROAS)?
Definition, formula, calculation and tips
Return on Advertising Spend (ROAS) is a marketing metric that measures a specific ad campaign and how it has impacted revenue. Tracking ROAS can inform whether digital marketing campaigns are working effectively or if there is room for optimization.
When it comes to advertising and marketing, return on ad spend (ROAS) is one of, if not the, most important marketing metrics to consider when assessing your ad campaign and your advertising budget. And considering that most businesses are scrutinizing profit margins and each dollar spent on advertising efforts, ROAS is more important than ever. In short, ROAS determines a marketing campaign’s effectiveness, which is measured by the earned revenue for each dollar spent on advertising. In this guide, we’ll review the particulars of ROAS, how to calculate it, what a “high ROAS” looks like, and how it differs from other objectives and key results (OKRs) like return on investment (ROI) and advertising cost of sales (ACOS).
Changing your brand’s ROAS doesn’t just happen overnight or at random. Amazon Ads has tools and services available to help your brand better understand its industry, the landscape it’s working in, and the opportunities available to it. Below are examples of how two brands increased ROAS with the help of Amazon Ads.