ROAS: Return on Advertising Spend

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What does ROAS mean? ROAS stands for Return on Advertising Spend and describes how much turnover a company achieves in relation to the advertising costs incurred. Where is ROAS used? ROAS is primarily used in performance marketing, e.g. for Google Ads, Facebook Ads or e-commerce campaigns, to evaluate the profitability of advertising measures. What is a good ROAS? A good ROAS depends heavily on the industry and business model. Many companies aim for a value of at least 4:1, i.e. €4 in sales per €1 in advertising costs. The higher the ROAS, the more efficient the campaign.

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ROAS simply explained

Formula: How do you calculate the return on advertising spend?

  • ROAS = turnover / advertising costs

Example ROAS

To calculate the ROAS, you divide the sales achieved with a campaign by the advertising costs used for it. The result shows how efficient the budget used was.

How to calculate the ROAS

This is how you can calculate the Return on Advertising Spend (ROAS):

  • Advertising costs: € 2,000
  • Turnover through campaign: € 10,000
  • Formula: ROAS = turnover / advertising costs
  • Calculation: 10,000 € / 2,000 € = 5
  • Result: The ROAS is 5, i.e. 5 € turnover per 1 € advertising costs

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