Return On Ad Spend (ROAS)
Return On Ad Spend is the ratio of revenue generated compared to the amount spent on ads. If you spend $1,000 and generate $4,000 in revenue, your ROAS is 4:1 or 400%. This is the ultimate metric for determining if your ads are profitable.
Why it matters for your business
ROAS is what matters to your bottom line. If you achieve a 3:1 ROAS, you're profitable (assuming the revenue covers your other costs). The goal isn't a certain ROAS — it's that your ROAS is better than the profit margin on any other way you could spend that money. For many service businesses, a 2:1 to 4:1 ROAS is healthy.
In practice
A dental practice spends $2,000 on ads in a month. Those ads generate 8 new patient appointments, and average appointment revenue is $750. Total revenue: 8 × $750 = $6,000. ROAS = $6,000 ÷ $2,000 = 3:1.
Common questions
What's a good ROAS?
A ROAS of 2:1 or better is generally considered profitable. 3:1 or higher is strong. But it depends on your business — a high-margin service (like consulting) might want 5:1+, while a lower-margin business might be happy with 2:1.
Why can it take time to see a good ROAS?
It takes time to collect data. In the first week or two of ads, you might have high CPLs because the system is still learning and testing audiences. After 2–4 weeks, you'll have enough data to optimize and your ROAS typically improves.
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