Return on Ad Spend, showing revenue generated from advertising.
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ROAS (Return on Ad Spend) is a marketing metric that measures how much revenue is generated for every ₹1 spent on advertising. It is commonly used to evaluate the performance of Google Ads, Meta Ads, and other paid advertising campaigns.
ROAS formula
ROAS = Revenue attributed to ads ÷ Advertising spend
For example, if a Shopify store spends ₹20,000 on ads and generates ₹80,000 in attributed revenue:
ROAS = ₹80,000 ÷ ₹20,000 = 4
This means the campaign generated ₹4 in revenue for every ₹1 spent on advertising, or a 4:1 ROAS.
Why ROAS is important
Important: ROAS measures revenue, not profit. It doesn’t automatically account for product costs, shipping, returns, agency fees, or other operating expenses, so a high ROAS does not necessarily mean the campaign is profitable.