Formula
ROAS = revenue attributed to the ads / ad spend.
Meta shows it as a multiple. Its Purchase ROAS metric is "purchase conversion value divided by amount spent", where the value comes from the purchase events your pixel or Conversions API sends. Google reports the same ratio as a percentage. Its Target ROAS help page gives the example "$5 in sales / $1 in ad spend x 100% = 500%". A ROAS of 4 on Meta is a ROAS of 400% on Google.
Worked example
You spend $1,000 on a campaign in one week. The pixel attributes $4,000 of purchases to it. ROAS = 4,000 / 1,000 = 4.0. Google would show 400%.
Now add the margin. If the products carry a 40% gross margin, $4,000 of revenue leaves $1,600 of gross profit. Take out the $1,000 of ad spend and $600 remains. At a ROAS of 2.0 the same spend loses money: $2,000 of revenue is $800 of gross profit, against $1,000 of ads.
Why it matters to a media buyer
ROAS is the one number that ties spend to revenue, so it is the first thing a store owner asks about. It is also the metric most often misread. ROAS counts revenue before the cost of goods, shipping, fees and returns. A campaign can post a ROAS of 3 and still lose money when margins are thin.
The fix is to know your break-even ROAS, which is 1 divided by your gross margin. A 40% margin needs a ROAS above 2.5 to make any profit. Read every ROAS against that line, not against an industry average.
Attribution is the other trap. Each platform counts the orders its ads touched inside its own window. Meta and Google can both claim the same purchase. For a blended view, divide total revenue by total ad spend across every channel.
In Adsap
The performance dashboard shows ROAS per campaign, ad set and ad, from yesterday's numbers, for Meta and Google Ads. The free ROAS calculator turns revenue and spend into the multiple and the percentage. The break-even ROAS calculator takes your price and costs and returns the ROAS you need. Automation rules can watch ROAS and pause an ad set that falls under a floor, with the guardrails described in the rules guide.
Frequently asked questions
The one above your break-even ROAS, which is 1 divided by your gross margin. A 70% margin makes money at a ROAS of 2. A 25% margin loses money at a ROAS of 3. Benchmarks by industry vary widely, so compare your ROAS with your own margin first.
No. ROAS is revenue divided by ad spend. ROI is profit divided by cost. A campaign can have a high ROAS and a negative ROI when the product margin is thin or other costs are high.
Meta counts the purchases its ads touched inside its attribution window, using the value your pixel or Conversions API sent. Your store counts every order. Two platforms can both claim the same order, so the sum of platform ROAS is not your blended ROAS.
Sources
- Meta Business Help Center, Purchase ROAS (return on ad spend): "purchase conversion value divided by amount spent". https://www.facebook.com/business/help/274294333328345
- Google Ads Help, About Target ROAS bidding: the "$5 in sales / $1 in ad spend x 100% = 500%" example. https://support.google.com/google-ads/answer/6268637
- Adsap, ROAS calculator and break-even ROAS calculator.