How to Calculate Return on Ad Spend (ROAS)

Return on Advertising Spend (ROAS) is the amount of revenue a company receives for every dollar spent on an advertising source. This is a gauge of the effectiveness of online advertising campaigns. The higher your return, the more effective the ad source.

To calculate return on ad spend, use this formula:

ROAS = (Revenue derived from ad source)/(Cost of ad source)

ROAS Calculator

If you spent $1,000 on Shopping Campaigns in one month, and during the same month these campaigns generated a revenue of $5,000, then your return would be:

$5000/$1000 = 5:1 or 500%

A return on advertising spend of 5:1 indicates that for every dollar spent on Shopping Campaigns, you get $5 in revenue.

 

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