What is ROAS (return on ad spend)?

ROAS (return on ad spend) is the conversion value divided by ad costs. At a ROAS of 5, every euro spent on ads brought in five euros of conversion value. In Google Ads it is often shown as a percentage: 500 percent is the same as 5. ROAS is not the same as ROI, because it ignores margin and other costs.

Why is ROAS important?

See returns quickly: you compare campaigns or products on what they earn per euro.
Basis for a target ROAS: Smart Bidding can steer on it.
Watch the margin: a high ROAS can still mean a loss on a low margin.

Examples of ROAS

€500 in ad costs and €2,500 in revenue gives a ROAS of 5, or 500 percent.
A store with a 25 percent margin breaks even at a ROAS of 4.
Campaign A has a ROAS of 3 and campaign B a ROAS of 6: B brings in twice as much revenue per euro.

How do you use ROAS?

Calculate your ROAS by dividing conversion value by ad costs, and work out your break-even ROAS: 1 divided by your margin. Compare campaigns, products or keywords and adjust with budget or a target ROAS. Make sure the conversion value is right. For tracking questions: analytics and dashboards.

ROAS (Return on Ad Spend)