Return on Advertising Spend; How much revenue is earned for every dollar spent on ads?
ROAS = Total Sales / Advertising Costs
Return On Ad Spend (ROAS) tells you how much value your customers are bringing into your store compared to your marketing ad spend. ROAS is an especially important metric when you start adding layers of advertising spend to your marketing strategy. From social ads, Google Ads, to paid banner ads, PPC campaigns and more, you want to have a way of telling how much return you are getting on your investment.
Are all those ads translating to lucrative customers who will bring in a high lifetime value (LTV) by purchasing often? Your ROAS metric helps you set your budget and manage your marketing spend.
ROAS (Net, New, & Returning)
- ROAS (Net) = Net Sales / Advertising Costs
- ROAS (New) = Total Sales from New Customers / Advertising Costs
- ROAS (Returning) = Total Sales from Returning Customers / Advertising Costs
Updated 9 months ago