What Is ROAS? Return on Ad Spend Explained

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…

Spotnxt Team 22 Oct 2026 1 min read

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 spendRevenueROAS
₹10,000₹30,0003×
₹10,000₹50,0005×

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 →

Written by the Spotnxt Team

We build Spotnxt, an AI platform that plans, launches and optimises Meta and Google Ads for brands in India, the US and the UAE. We write about what we see working in real ad accounts.

Frequently asked questions

Return on ad spend, revenue from ads divided by what you spent on them.

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