Return on Ad Spend (ROAS) is the single most important metric for eCommerce marketers. It tells you exactly how many dollars you get back for every dollar you put into the advertising machine.
The math is simple. To calculate ROAS, you divide your total revenue generated from ads by the total cost of those ads.
Revenue / Cost = ROAS
For example, if you spend $1,000 on Facebook Ads and they generate $5,000 in sales, your calculation is:
- $5,000 / $1,000 = 5
- Expressed as a ratio: 5:1
- Expressed as a percentage: 500%
Try It Yourself
Use our mini-calculator to check your current campaign performance.
Quick ROAS Check
4.0x
Return on Ad Spend
What is a "Good" ROAS?
A common misconception is that any ROAS above 1.0 (break-even) is good. This is false because it ignores your Cost of Goods Sold (COGS) and operating expenses.
If your profit margin is 50%, you need a ROAS of at least 2.0 just to break even.
- Below 3.0x: Often dangerous territory for low-margin businesses.
- 4.0x (400%): The industry standard for "Healthy."
- Above 8.0x: Exceptional. You should likely scale your spend aggressively.
Is your ROAS fake?
Most analytics tools (like Google Analytics 4) fail to track social traffic correctly, often marking TikTok or Instagram ads as "Direct" traffic. This artificially lowers your ROAS.
Fix your tracking with Zyro Attribution →
The Attribution Problem
The biggest challenge with ROAS isn't the math—it's the data. If a customer clicks a Facebook Ad today but buys via a Google Search tomorrow, who gets the credit?
Standard tools give 100% of the credit to Google (Last Click). This makes your Facebook ROAS look terrible, causing you to turn off the very ad that created the demand.
To fix this, smart marketers use Multi-Touch Attribution to see the full path to purchase.