ROAS (Return on Ad Spend)

ROAS is expressed either as a ratio (4:1) or a percentage (400%), both describing the same relationship: for every dollar spent on ads, four dollars in tracked revenue came back. It's calculated at whatever level the data supports — campaign, ad group, or account-wide — and depends entirely on accurate conversion tracking; if purchase values aren't passed back correctly, the ROAS reported is not the ROAS that actually happened.

The number everyone forgets to ask is: ROAS off of what cost basis? Platform-reported ROAS only counts ad spend, not the cost of goods, fulfillment, payment processing, or staff time. A campaign showing 400% ROAS can still be unprofitable for a low-margin product, while 150% ROAS can be very profitable for a high-margin service. Comparing ROAS across campaigns or businesses without accounting for margin is one of the most common ways paid media performance gets misread.

Target ROAS is also a common automated bidding strategy on Google Ads and Meta, where the advertiser sets a target return and the platform's algorithm adjusts bids in real time to try to hit it across the account — trading some manual control for machine-learned bid optimization at scale.