Return on Ad Spend (ROAS)
Attributed revenue or conversion value divided by advertising spend.
Return on ad spend compares revenue attributed to advertising with the money spent on those advertisements. Express it as a multiple, such as 4x, or a percentage, such as 400%. State whether the numerator is collected revenue, first-year contract value, or another modeled conversion value.
Example: A SaaS business spends $2,000 and attributes $8,000 of collected subscription revenue to the campaign during its chosen measurement window. ROAS is 4x. If it instead reports a forecast of future contract revenue, it should label that forecast rather than present it as cash already received.
Watch out: ROAS is not profit or proof of incremental sales. Advertising platforms may claim credit for customers who would have purchased anyway, and multiple platforms can claim the same purchase. Hosting, support, refunds, and sales costs also matter. Be especially careful with recurring subscriptions: including years of projected revenue while counting one month of spend produces an optimistic comparison.
Further reading: Ahrefs: marketing metrics.
Related: marketing attribution, CPA.