ROAS Definition
ROAS (return on ad spend) is a fundamental eCommerce KPI: it is the amount of revenue your store made in top-line sales divided by your marketing spend to drive those sales.
ROAS Formula
To calculate ROAS, you divide your brand's revenue by its total marketing spend over a particular time period:
Example of a ROAS Calculation
If your brand has a monthly Facebook marketing budget of $10,000, and at the end of the month, you drove a total of $40,000 in sales, it means that you have a ROAS of 400%. ROAS can also be displayed as a dollar amount, a number, or a multiplier. Using our example, this means that ROAS could also be written as $4, 4, or 4x.
For more on ROAS (and related metrics), head over here.
