A marketing metric that measures the amount of revenue earned for every dollar spent on advertising.
Return On Ad Spend (ROAS) measures the revenue generated for every dollar spent on advertising.
Formula: Revenue / Ad Spend = ROAS.
If you spend $100 and make $500, your ROAS is 5x (or 500%).
ROAS only looks at ad costs. ROI takes into account all costs (COGS, shipping, agency fees). A 400% ROAS might actually be unprofitable if your product margins are low.
Browse related definitions in the same glossary category.
Ad Extensions
Additional information shown with Google Ads, such as call buttons, sitelinks, or price listings. Increases ad visibility and CTR.
Ad Rank
The position of a paid ad on the search results page, determined by bid amount, ad quality, and relevance.
Auto-Tagging
A Google Ads feature that automatically appends tracking parameters to URLs for easier analytics integration.
Automated Rules
Conditions set within an ad platform that automatically make changes to your account tailored to your specific goals.
Bid Automation
Using algorithms or rules to automatically adjust bids based on performance, time, or competitive signals.
Bid Strategy
A tailored approach to spending your budget on ad clicks to maximize specific goals, like conversions or visibility.
Understanding "Return on Ad Spend (ROAS)" is just the first step. Our team at TwoSquares specializes in technical SEO and digital strategy, helping brands turn complex concepts into measurable growth.