ROAS (Return on Ad Spend)

ROAS (Return on Ad Spend) measures how much revenue is generated per unit of advertising cost, typically calculated as Revenue / Ad Spend. It is a core performance metric for paid media, but it should not be read in isolation. High ROAS can still be unprofitable when margins are thin, fulfillment costs are high, or attribution overcredits one channel. Strong ROAS analysis includes contribution margin, customer lifetime value, and incrementality context, especially for retargeting and branded search. Teams should set ROAS targets by campaign objective and funnel stage rather than forcing one benchmark across all traffic types.