Data Snacks Video — Return on Ad Spend (ROAS)

Jeremy Horowitz, Daasity's Director of Marketing, dives into Return on Ad Spend (ROAS): how to accurately calculate this KPI, why it matters, and how you should leverage ROAS insights to grow your business.

Return on Ad Spend

Return on Ad Spend (ROAS) 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.

Return on Ad Spend Formula

To calculate Return on Ad Spend, you divide your brand's revenue by its total marketing spend over a particular time period: 

how to calculate ROAS - revenue divided by marketing spend

Example of a Return on Ad Spend 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.