Ads
ROAS
Also called Return on ad spend.
ROAS, or return on ad spend, is how much revenue you earn for each dollar you spend on ads.
Divide revenue from ads by what the ads cost. Spend $200, earn $600, and your ROAS is 3. It uses revenue, not profit, so a ROAS of 3 can still lose money if your margins are thin.
Work out your break-even ROAS before you run ads: the point where you neither make nor lose money. Anything under it loses money. Ad platforms count sales their own way, so check attribution against your own orders and UTM parameters. Calculate break-even ROAS from your real margins.
Go deeper
- How to calculate break-even ROASD2CComing soon
- How to run Meta ads for a Shopify storeD2CComing soon
- How much to spend on adsSet your first ad budget from what one sale leaves you: a yes-or-no check by business type, a test limit of 10 times that number over 14 days locked in Google, Meta or LinkedIn, a daily stop line at 3 times, and a Sunday rule to raise 20% or stop.
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