Return on Ad Spend (ROAS)

Definition of Return on Ad Spend (ROAS)

A metric measuring the revenue generated per dollar spent on advertising.

Explanation of Return on Ad Spend (ROAS)

Return on Ad Spend (ROAS) measures the revenue generated for every dollar spent on advertising. It is a key performance metric used by marketers to evaluate the effectiveness and profitability of their ad campaigns. ROAS is calculated by dividing the total revenue from ad campaigns by the total ad spend. A higher ROAS indicates a more effective campaign, as it means more revenue is generated per dollar spent. This metric helps businesses determine which campaigns are performing well and which need adjustments. By analyzing ROAS, marketers can allocate budgets more efficiently, focusing on high-performing campaigns and optimizing or discontinuing underperforming ones. ROAS provides insights into the overall efficiency of advertising efforts, helping businesses make data-driven decisions. It also enables comparison across different campaigns, channels, and time periods, offering a comprehensive view of ad performance. Monitoring ROAS regularly helps ensure that advertising investments are driving profitable growth.

This dictionary entry was written by

Per-Gulbrand Peter Braathen

With a foundation in doctoral-level research, Per-Gulbrand Peter Braathen is a seasoned expert in the areas of marketing, branding and communication. His proficiency extends to marketing management, branding and communication strategy. Braathen's experience is underscored by his rich background from various industries, including entertainment. A distinguished alumnus of the USC Marshall School of Business, Braathen boasts a Master of Science in Marketing, complemented by a Graduate Certificate in the Business of Entertainment from the USC School of Cinematic Arts as well as two undergraduate Bachelor degrees from the esteemed University of Southern California.