Dave ChaffeyThe Return on Advertising spend (ROAS) isn’t reported by default by ad platforms like Facebook and Google or by Google Analytics, but is a useful derived or calculated measure that can be reported in Google Data Studio for example, which gives a great comparison of top-level of ad effectiveness by channel.
It is calculated as:
The total revenue generated for a specific marketing channel (like Google Ads or Paid Social) divided by the total spend on that channel.
A typical target might be $5 to $1, or £10 to £1.
It has the disadvantage that it doesn’t take profitability into account which is essential for retail sales for which Return on Investment (ROI) is a more suitable measure. However, where profit isn’t known, for example, in charity donations, it is a useful simple measure.
