What ROAS measures
Return on ad spend (ROAS) is the revenue your advertising produced for every dollar you spent on it. It’s the headline efficiency metric for any paid-media program: a 5× ROAS means $5 back for every $1 in, a 1× ROAS means you only made your money back, and below 1× the campaign lost money on a media-cost basis.
The ROAS formula
ROAS = Revenue ÷ Ad spend (× 100 for the percentage)
$50,000 in revenue from $10,000 of ad spend is a 5× (500%)ROAS. It’s deliberately simple — which is its strength for fast in-platform decisions and its limitation: it counts only ad spend, not the cost of producing the creative, the tools, or the team.
What counts as a good ROAS
There’s no universal “good” number — there’s your number. Your break-even ROAS is 1 ÷ your profit margin: a 25% margin needs a 4× ROAS just to break even, while a 60% margin breaks even near 1.7×. Beat your break-even and the campaign is profitable; sit below it and you’re buying revenue at a loss no matter how big the ROAS looks.
How marketers use it
- Channel & campaign allocation. Shift budget toward the campaigns clearing your break-even ROAS by the widest margin.
- Bid & target setting. Google and Meta let you optimise to a target ROAS — you need to know the right target first.
- Scaling decisions. ROAS usually softens as you scale spend; tracking it as you add budget tells you where efficiency breaks.
- Reporting. It’s the number clients and founders understand fastest — paired with ROI for the true-profit view.
Where this fits in a real growth system
A healthy ROAS is the output of good targeting, creative, and a site that converts — not luck. That’s the system we build for businesses across Oakville, Toronto, and the GTA: paid media, brand, website and SEO, and AI automation, run as one engine.