ROAS (Return on Ad Spend)

ROAS expresses advertising return as a simple multiplier: revenue generated ÷ ad spend. A campaign that drove €500,000 in attributable revenue on €100,000 of spend has a 5.0 ROAS. Unlike ROI, which considers profit net of all costs, ROAS is a purely top-line metric: it measures gross revenue attributable to ads, not margin.

ROAS became a dominant performance marketing metric because it is easy to compute, easy to compare across campaigns, and easy to integrate into bidding algorithms. The trade-off is that a high-ROAS campaign can still be unprofitable if product margins are low or if the attribution model credits ads with revenue that would have happened anyway. Sophisticated advertisers pair ROAS with incrementality testing to separate genuine lift from baseline revenue.