The short version

ROAS (return on ad spend) is the revenue your ads brought in divided by what you spent on those ads.

ROAS = revenue from ads ÷ ad spend

Spend $3,000 and make $12,000 from those ads, and your ROAS is 4. People write it as 4x, 4:1 or 400%. All the same number.

A ROAS of 4 means every $1 of ad spend brought back $4 in revenue. Revenue, not profit. That difference is where most people get hurt.

How to calculate ROAS, step by step

1. Pick the window and the scope. One campaign, one channel or the whole account, for a set period. Mixing windows gives you a number that means nothing.

2. Take the revenue the ads produced. In Meta Ads Manager that is the purchase conversion value. In Google Ads it is the conversion value.

3. Divide by the spend for the same scope and window. That's your ROAS.

4. Compare it to your break-even ROAS. A ratio on its own tells you nothing about profit. Break-even ROAS is 1 ÷ contribution margin, so a 40% margin breaks even at 2.5x.

Where to find ROAS in Ads Manager

Meta: add the "Purchase ROAS (return on ad spend)" column through Columns, then Customize columns.

Google Ads: add the "Conv. value / cost" column. That is ROAS under another name.

Both count sales their own way, so the platforms often claim more revenue than your store shows. Check the total against your real revenue with MER, which no platform can inflate.

ROAS vs ROI

ROAS measures revenue. ROI measures profit.

ROI = (gross profit from ad sales − ad spend) ÷ ad spend

Take the example above. $12,000 of revenue at a 40% margin leaves $4,800 before ads. Minus $3,000 of spend is $1,800 of profit. ROAS is 4x. ROI is 60%.

A campaign can show a great ROAS and still lose money if the margin is thin. That's why I never read one without the other.

Is my ROAS good?

Only if it sits above your break-even ROAS by enough to leave the profit you want. I go through the three lines every account needs, and what the latest Meta benchmarks show, in what is a good ROAS. The break-even ROAS calculator gives you the floor.

Pool rule 006Screenshots aren't results. P&L or it didn't happen.

Quick answers

What does a ROAS of 3 mean? You made $3 in revenue for every $1 spent on ads. Whether that is profitable depends on your margin.

Is ROAS a ratio or a percentage? Either. 3x, 3:1 and 300% are the same ROAS.

What is target ROAS? A bidding setting. Google Ads has a Target ROAS bid strategy and Meta has a ROAS goal. You tell the platform the return you want and it bids to hit it.

Does ROAS include organic sales? No. Only revenue the platform credits to your ads. For the whole picture, use MER.

How do I increase ROAS? Better creative, a better landing page, higher order values and faster kill decisions. My kill rules cover the last one.