Digital marketing

ROAS (Return On Ad Spend)

Definition

Return on ad spend, the ratio between the revenue generated and the amount spent on advertising. An indicator of immediate campaign performance.

Detailed explanation

ROAS measures pure ad performance (revenue generated / spend). A ROAS of 3 means 3 EUR of revenue for 1 EUR of spend. Note: a high ROAS does not mean a profitable business. It ignores product margin, fixed costs, and the real post-attribution CAC. In 2026, with degraded tracking (iOS 14+, third-party cookies), the ROAS measured by platforms (Meta, Google) overstates reality by 30 to 60%. Serious media buyers measure MER (Marketing Efficiency Ratio = total revenue / total spend) or blended ROAS, which is closer to business reality.

Concrete example

Meta campaign: 5,000 EUR of spend leads to 18,000 EUR of revenue measured by Meta (ROAS 3.6). In reality, platform attribution is overstated: real incremental revenue measured in a lift test = 11,000 EUR (blended ROAS 2.2). Product margin 40% = 4,400 EUR of gross margin. The campaign is profitable, but not as much as the dashboards claim.