- Return on ad spend (ROAS) is one of the easiest revenue-based metrics to measure.
- It is simply the total revenue generated for a specific marketing channel (like PPC) divided by the total spend on that channel.
- The Formula is (Revenue/Spend) = Return on Ad Spend.
- For example, if you spent $10,000 on paid search in October and generated $40,000 in revenue, your ROAS for paid search is $4:1. ($40,000/$10,000= $4).
- It tells you if, at the most foundational level, a marketing channel is performing at a level that will allow for profitability.
- Unlike many PPC metrics, the higher your number the better.
- That’s because the metric tells you how much revenue you generate off each advertising dollar spent.
- So a $4:1 means that for every $1, you generate $4 in revenue.
- A $6:1 means that you generate $6 for every dollar you spend.