Knowledge base · Advertising
ROAS
ROAS stands for Return On Ad Spend: the revenue you get back per euro of advertising budget.
ROAS is the ratio between the revenue generated by advertising and the amount you spend on it. Spend 1,000 euros and generate 4,000 euros in revenue and your ROAS is 4, or 400 percent.
The number means little on its own. A ROAS of 4 is excellent at a 60 percent margin and loss-making at a 15 percent margin. That is why we prefer POAS, which includes margin, and what a customer is worth over a longer period.
Also watch where the number comes from. Ad platforms like to credit themselves: the same order is sometimes claimed by two channels. Measuring on your own side next to the platform numbers keeps you from steering on air.
How we do it
Next to platform ROAS we always set up our own measurement, so you see what campaigns truly add.
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