ROAS (Return on Ad Spend)
Quick answer
What is roas (return on ad spend)?
The amount of revenue generated for every dollar spent on advertising.
Also called: Return on ad spend.
How to calculate roas (return on ad spend)
ROAS = revenue from ads ÷ amount spent on those ads
Worked example: $8,000 in sales from $2,000 of ads = $8,000 ÷ $2,000 = 4x ROAS.
In plain English
ROAS is calculated as revenue divided by ad spend, usually shown as a multiple like 3x or as a ratio. It tells you whether paid traffic is profitable before other costs are considered.
Example
$1,000 in ad spend that generates $4,000 in revenue is a 4x ROAS.
Why it matters
A funnel with weak conversion rates can make even cheap traffic unprofitable — ROAS is the number that reveals that fast.
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