ROAS (Return On Advertising Spend)

Definition

ROAS is a metric that measures the effectiveness of a digital advertising campaign. ROAS helps online businesses evaluate which methods are working and how they can improve future efforts. Similar to return on investment (ROI), ROAS measures the return on investment of digital advertising. In addition to the overall ROAS of an entire marketing budget, it can also be measured in more detail based on specific ads, targeting, campaigns, etc..

Application

ROAS calculation formula:

ROAS = Revenue (total profit from promotion) / Cost (all ad spend

For ROI, you need to take into account all relevant costs, not just the investment in the campaign. These numbers should be tracked over the long term, it will help you with your marketing budgets and strategy.

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