Stratasis

Glossary · Ads

What is ROAS?

ROAS, or return on ad spend, compares the revenue your ads bring in with what you spent on them, to show whether the advertising pays for itself.

ROAS, explained

Simple first, then the detail. With how it's used, and why it matters to a business.

In plain English

It's checking whether the seeds you bought grew more than they cost. Planting more makes sense only if each packet comes back as a bigger harvest.

Used in a sentence

“Search ads have a strong ROAS; the display campaign doesn't, so we moved its budget across.”

“We were proud of how many clicks we got until we worked out the ROAS.”

In detail

ROAS is revenue from ads divided by ad spend, often written as a ratio or a multiple. It needs conversion tracking with values attached, which is simple for online stores and harder for service businesses where the sale happens later, by phone or in person. There, a value per lead, based on how often leads become jobs, is a practical stand-in.

ROAS is about revenue, not profit. A healthy number depends on your margins: a business with thin margins needs a higher return to break even than one with wide margins. It's best used to compare campaigns and decide where the next dollar should go.

Why it matters for your business

ROAS turns ad reports into a simple question: which campaigns earn more than they cost?

  • Compares campaigns fairly
  • Shows where to move budget
  • Needs conversion tracking with values

Easy to mix up

ROAS isn't the same as ROI. ROAS compares revenue with ad spend only; ROI accounts for all costs, including the work, the product and the overheads.

Questions and answers

Still have a question?

Ask us anything. We'll answer it straight, even if the answer is that we're not the right fit.

  • It depends on your margins. The return has to cover not just the ads but the cost of delivering what you sold. Your break-even point is the place to start.

  • By tracking leads from ads and assigning each a value based on how often leads become paying jobs and what those jobs are worth.

Contact

Take a seat, let's talk.

Bring a project, a question or a half-formed idea. We'll take it from there.