1. What is ROAS?

Return on Ad Spend (ROAS) is a marketing metric that measures the effectiveness of advertising campaigns. It shows how much revenue you earn for every dollar spent on advertising.

2. How Does the Calculator Work?

The calculator uses the ROAS formula:

Where:

• \( Conversion Value \) — Revenue generated from conversions (USD)
• \( Cost \) — Total advertising spend (USD)

Explanation: ROAS is a ratio that indicates how much money you make for every dollar spent on advertising.

3. Importance of ROAS Calculation

Details: ROAS helps marketers evaluate campaign performance, optimize advertising budgets, and determine which channels deliver the best returns.

4. Using the Calculator

Tips: Enter your total conversion value in USD and your total advertising cost in USD. Both values must be greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What is a good ROAS?
A: A ROAS of 4:1 ($4 revenue for every $1 spent) is generally considered good, but this varies by industry and profit margins.

Q2: How is ROAS different from ROI?
A: ROAS measures advertising effectiveness specifically, while ROI considers all costs associated with a product or service.

Q3: Can ROAS be negative?
A: No, since both conversion value and cost are positive values, ROAS will always be positive (though values below 1 indicate a loss).

Q4: Should I look at ROAS alone?
A: No, combine ROAS with other metrics like customer lifetime value (LTV) for a complete picture of campaign performance.

Q5: How often should I calculate ROAS?
A: Regularly monitor ROAS - weekly for active campaigns, monthly for overall performance assessment.