ROAS stands for “Return on Ad Spend.”

As the full name implies, it tells you how much money you’re earning as a result of the amount you spend on advertising.

Return on ad spend is a calculation that measures the cost-effectiveness of advertising efforts.
It can help businesses and other entities figure out if their advertising strategy is worth it or not.

When a business tries a new advertising campaign, they may compare the ROAS at the start of the campaign, at the mid-point, and at the end.

This can help determine whether they should renew the campaign or try another method of outreach.

Here’s how to calculate ROAS: divide the total revenue you earned from advertising by the amount you spend on advertising:

ROAS = (Revenue Earned From Advertising / Advertising Expense) x 100

For example, if you spend $3,000 on Google Ads and earned $6,000 from people who clicked on those ads, then your ROAS is $6,000 / $3,000 or 2. In accounting terms, that 2 means 200%.