Return on Ad Spend (ROAS)
Return on Ad Spend (ROAS) is a marketing metric that measures the revenue generated for every dollar spent on advertising. It helps businesses evaluate the effectiveness of their advertising campaigns by showing how much income is earned relative to the investment made in ads. A higher ROAS indicates a more successful campaign.
To calculate ROAS, divide the total revenue generated from ads by the total ad spend. For example, if a company earns $500 from a campaign that cost $100, the ROAS would be 5. This means the company earned $5 for every $1 spent on advertising, highlighting the campaign's profitability.