ROAS stands for Return on Ad Spend. It measures the revenue generated for every dollar spent on advertising. In simple terms, it answers: “Are our ads making money?”
The formula is straightforward:
ROAS = Revenue from Ads ÷ Ad Spend
For example, if you spent $5,000 on ads and generated $20,000 in sales, your ROAS is 4.0 (or 400%). That means you earned $4 for every $1 spent.
At Point Source Marketing, we use ROAS as a profitability benchmark across PPC, social ads, and influencer campaigns. High ROAS signals efficient scaling opportunities; low ROAS? Time to optimize.