Short for ‘Return on Advertising Spend’ and refers to the amount of money from a specific advertising campaign. Calculating ROAS is the percentage of revenue gained in relation to your expenditure on the campaign. Revenue / Cost. This could be multiplied by 100%.
For example, a company spends $2,000 on an online advertising campaign in a single month. In this month, the campaign results in revenue of $10,000.
Therefore, the ROAS is a ratio of 5 to 1 (or 500 percent) as $10,000 divided by $2,000 = $5.
For every dollar that the company spends on its advertising campaign, it generates $5 worth of revenue.