Return on Ad Spend (ROAS) is a measure of the profitability of an advertising campaign. It is calculated by dividing the total revenue generated by the ad campaign by the total cost of the campaign. ROAS indicates the amount of revenue generated per dollar spent on advertising. A higher ROAS indicates a more profitable campaign, while a lower ROAS indicates a less profitable campaign.

The formula for calculating ROAS is:

ROAS = (Revenue generated from campaign / Cost of campaign) x 100

For example, if a business spends $1,000 on a Facebook advertising campaign and generates $5,000 in revenue from that campaign, the ROAS would be calculated as follows:

ROAS = ($5,000 / $1,000) x 100 = 500%

This means that for every dollar spent on the campaign, the business generated $5 in revenue.

ROAS can be used to evaluate the effectiveness of different advertising channels, campaigns, or even individual ads. A higher ROAS indicates that a campaign is more profitable, while a lower ROAS indicates that a campaign may not be generating enough revenue to justify the cost.

When evaluating ROAS, it’s important to consider other factors that may impact revenue, such as changes in market conditions, competition, or customer behavior. It’s also important to track ROAS over time and to adjust your advertising strategy as needed to improve results.