ROAS (return on ad spend) is the revenue you earn for every unit of currency spent on ads. It’s calculated as revenue from ads ÷ ad spend, so ₹50,000 of sales from ₹10,000 of ads is a ROAS of 5 (or 5×).
How to calculate ROAS
ROAS = revenue attributed to ads ÷ ad spend
| Ad spend | Revenue | ROAS |
|---|---|---|
| ₹10,000 | ₹30,000 | 3× |
| ₹10,000 | ₹50,000 | 5× |
What is a good ROAS?
It depends on your margins. A business with 70% gross margin can be profitable at a much lower ROAS than one with 20% margin. Work out your break-even ROAS = 1 ÷ gross margin (for example, 40% margin → 2.5× break-even), then aim above it.
ROAS vs CPA vs ROI
- ROAS measures revenue per unit of ad spend.
- CPA measures the cost of one conversion.
- ROI includes all costs (product, shipping, tools), not just ads.
Spotnxt lets you set monthly revenue, spend or ROAS goals with daily pacing, and supports Shopify and WooCommerce revenue.
Related: Read the full guide → · All glossary terms →