Return on ad spend (ROAS) is the revenue (or conversion value) you get back for every $1 you spend on ads.
ROAS is usually shown as a multiple (like 4.0x) or a percent (like 400%). If you spent $1,000 and tracked $4,000 in sales from that campaign, your ROAS is 4.0x (or 400%), meaning $4 back for every $1 spent.
How ROAS is calculated
| What you’re measuring | Formula | Quick example | What it tells you |
|---|---|---|---|
| ROAS (multiple) | Ad-attributed revenue ÷ ad spend | $4,000 ÷ $1,000 = 4.0x | Efficiency of ad dollars at creating tracked revenue |
| ROAS (percent) | (Ad-attributed revenue ÷ ad spend) × 100 | (4,000 ÷ 1,000) × 100 = 400% | Same story, different display |
In Google Ads, you’ll also see “target ROAS” as a bidding option. That’s where you tell the platform the ROAS you want, and it adjusts bids to chase that goal when enough conversion data exists.
On Meta, ROAS commonly uses “purchase conversion value ÷ amount spent.” If you are not sending accurate purchase values (or you are a lead-gen business without real values set up), ROAS can look amazing or terrible without matching reality.
ROAS vs ROI
ROAS only compares revenue to ad spend. It does not automatically factor in your cost of goods, payroll, rent, or fulfillment. ROI is broader because it looks at profit relative to total costs, so a “good ROAS” can still be a money-loser if margins are thin or overhead is heavy.
What a “good” ROAS looks like for your business
There’s no universal number, because the break-even point depends on your gross margin and what else the sale has to pay for. Here’s a simple break-even cheat sheet for ecommerce when you only consider gross margin (before overhead):
| Gross margin | Break-even ROAS (multiple) | Plain-English meaning |
|---|---|---|
| 25% | 4.0x | You can spend up to $25 to sell $100 |
| 40% | 2.5x | You can spend up to $40 to sell $100 |
| 50% | 2.0x | You can spend up to $50 to sell $100 |
| 60% | 1.7x | You can spend up to $60 to sell $100 |
For lead-gen businesses in Orlando (dentists, law firms, pest control, home services), ROAS works best when you assign a real value to a lead. Example: if an average new patient is worth $1,200 in the first year and 30% of qualified leads book, a lead value might be ~$360 (1,200 × 0.30). With that, you can measure ROAS as “lead value generated ÷ ad spend,” not just clicks or form fills.
Common ROAS mistakes we see
- Counting the wrong “return.” Using gross revenue when profit or lifetime value is what actually pays the bills.
- Tracking gaps. Missing phone calls, offline conversions, or appointment bookings that happen after the click.
- Attribution blind spots. Branded searches and repeat buyers can inflate ROAS if you only look at last-click platform numbers.
- Comparing apples to oranges. Judging a cold-audience campaign by the same ROAS as remarketing.
If you want ROAS you can trust, the first step is clean conversion tracking (forms, calls, and booked appointments) so you’re measuring what matters, not what’s easy to count. Our PPC management work usually starts with that tracking foundation before we scale budgets.
If you’re already using GA4 and want your reporting to match what your business sees, the measurement setup matters as much as the ads. You can sanity-check your stack with our guide on tools to measure performance with Google Search Console and Google Analytics, then use ROAS as a clean scoreboard for paid campaigns.
When you’re ready, we can help you set a realistic ROAS target tied to margins, close rates, and actual capacity, then keep it stable while we expand volume. If your website is the weak link after the click, our web design team can help your paid traffic turn into calls and booked jobs, and you can keep an eye on the right outcomes with our list of metrics to track so ROAS doesn’t become a vanity number.
