Data Snacks Video — Return on Ad Spend (ROAS)

Jeremy 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.

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: 

how to calculate ROAS - revenue divided by marketing spend

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.