ROAS (Return on Ad Spend)

ROAS is the headline efficiency metric for paid advertising. A ROAS of 4 (often written 4× or 400%) means every $1 spent on ads returned $4 in revenue.

There's no universal 'good' ROAS — it depends on your profit margin. The number you actually need is your break-even ROAS, which is 1 ÷ gross margin. At a 40% margin you need at least a 2.5× ROAS just to cover the ad cost, so profitable campaigns aim comfortably above that.

ROAS measures revenue, not profit. To judge whether ads are truly making money, pair it with margin (via break-even ROAS) and, over a longer horizon, with customer lifetime value.