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What Is Return on Ad Spend (ROAS)?
Ads & Paid
Updated 18 September 2026
Quick Answer
Return on Ad Spend (ROAS) measures the revenue generated for every pound spent on advertising — calculated as revenue divided by ad spend — a key metric for judging paid campaign performance.
ROAS vs. ROI — What's the Difference?
| ROAS | ROI | |
|---|---|---|
| What it accounts for | Revenue relative to ad spend only | Actual profit, factoring in all costs, not just ad spend |
Why It Matters
- It's a quick, direct measure of whether a specific ad campaign is generating meaningful revenue relative to what's spent on it.
- It doesn't account for profit margin, so a high ROAS doesn't automatically mean a campaign is actually profitable — ROI is needed for that fuller picture.
How It Works
- Total revenue generated from a specific ad campaign is tracked.
- This is divided by the total amount spent on that campaign.
- The result shows how much revenue is generated per pound of ad spend.
Key Takeaways
- ROAS measures revenue generated per pound of ad spend.
- A high ROAS doesn't guarantee profitability without factoring in margins and other costs.
- ROI gives a fuller profitability picture than ROAS alone.
Frequently Asked Questions
What's a good ROAS?
It varies by industry and profit margin — a 4:1 ratio (£4 revenue per £1 spent) is a commonly cited benchmark, though it should be judged against your specific margins.
Is a high ROAS the same as being profitable?
Not necessarily — ROAS doesn't account for your costs beyond ad spend, so a campaign can have a strong ROAS but still be unprofitable once other costs are factored in.
How is ROAS different from ROI?
ROAS measures revenue relative to ad spend specifically; ROI factors in your actual profit margin and total costs for a fuller picture.