What is ROAS and how is it calculated?

ROAS (Return on Ad Spend) measures the revenue generated per dollar spent on advertising. The formula is simple: ROAS = Revenue ÷ Ad Spend. For example, if you spend $1,000 on ads and generate $3,000 in revenue, your ROAS is 3.0x.

A good ROAS varies by industry and platform. Generally, 2x or higher is considered profitable for most e-commerce businesses. The cross-industry average is approximately 2.19x. However, you should factor in your COGS and profit margins — a business with 80% margins can be profitable at 1.25x ROAS.

What's the difference between ROAS and ROI?

ROAS measures revenue generated per dollar of ad spend (Revenue ÷ Ad Spend), while ROI measures profit after all costs ((Revenue - Total Cost) ÷ Total Cost × 100%). ROAS is specific to advertising efficiency, while ROI gives you the complete profitability picture including COGS and overhead.

How do iOS privacy changes affect ROAS tracking?

Apple's App Tracking Transparency (ATT) framework, introduced with iOS 14.5, limits ad platforms' ability to track conversions. This means your tracked ROAS on Facebook and Instagram may be 20-30% lower than actual. Consider using server-side tracking, conversion APIs, or marketing mix models for more accurate measurement.

Should I include all costs in my ad spend calculation?

For the most accurate ROAS, include all advertising-related costs: platform ad spend, creative production costs, agency fees, tool subscriptions, and any other costs directly tied to your ad campaigns. This gives you a true picture of your advertising efficiency.

What is break-even ROAS?

Break-even ROAS is the minimum ROAS needed to cover your costs. If you have no COGS, your break-even ROAS is 1.0x. With COGS, the formula is: Break-even ROAS = 1 ÷ (1 - COGS Margin). For example, if your COGS is 40% of revenue, your break-even ROAS is 1.67x.

How often should I check my ROAS?

Monitor ROAS weekly for active campaigns and daily during launches or high-spend periods. Allow at least 7-14 days of data before making optimization decisions, as shorter windows can be misleading due to attribution delays and statistical noise.

What is the attribution window and why does it matter?

An attribution window is the time period after a user interacts with your ad during which a conversion can be credited to that ad. Common windows are 7-day click and 1-day view. Shorter windows may undercount conversions (lower ROAS), while longer windows may overcount them. Choose the window that best reflects your customer journey.

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Ad Platform Benchmarks (2025-2026)

Based on 2025-2026 industry reports from WebFX, Triple Whale, and TrendTrack. Benchmarks in USD.

Platform CPC, CPM, CTR & ROAS Benchmarks

Platform	CPC	CPM	CTR	CVR	Avg. ROAS
Facebook Ads	$0.97	$7.19	0.9%	9.21%	2x
TikTok Ads	$1.00	$10.00	0.84%	1.1%	2.5x
Instagram Ads	$1.15	$7.91	0.58%	1.08%	1.8x
Google Ads	$2.69	$38.40	3.17%	3.75%	2x
LinkedIn Ads	$5.26	$33.80	0.65%	2.35%	1.5x
YouTube Ads	$0.02 (CPV)	$9.68	0.65%	1.4%	2.2x

Average ROAS by Industry

Industry	Avg. ROAS
E-commerce	2.5x
Retail	2.2x
DTC Brands	2.8x
B2B / SaaS	1.5x
Services	1.8x
Education	2x
Travel & Hospitality	2.3x

Ad Metrics Glossary

ROAS

Return on Ad Spend — measures revenue earned per dollar spent on advertising.

ROAS = Revenue ÷ Ad Spend

ROI

Return on Investment — measures the profitability of an investment after all costs.

ROI = (Revenue - Cost) ÷ Cost × 100%

CPA

Cost Per Acquisition — the average cost to acquire one customer or conversion.

CPA = Ad Spend ÷ Conversions

CPC

Cost Per Click — the average cost for each click on your ad.

CPC = Ad Spend ÷ Clicks

CPM

Cost Per Mille — the cost per 1,000 ad impressions.

CPM = (Ad Spend ÷ Impressions) × 1,000

CTR

Click-Through Rate — the percentage of impressions that result in a click.

CTR = Clicks ÷ Impressions × 100%

CVR

Conversion Rate — the percentage of clicks that result in a conversion.

CVR = Conversions ÷ Clicks × 100%

Attribution Window

The time period after an ad interaction during which conversions are credited to the ad. Common windows: 7-day click, 1-day view.

Platform-specific setting

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