Glossary

What is ROAS?

ROAS (return on ad spend) is the revenue attributed to your ads divided by what those ads cost.

Definition

ROAS (return on ad spend) is the revenue attributed to your ads divided by what those ads cost.

Category: Paid media · Updated 1 Oct 2026 · BLITZ Campaign editorial

How do you calculate ROAS?

ROAS = revenue from ads ÷ ad spend. Break-even ROAS is roughly 1 ÷ contribution margin, where contribution is what remains after product cost, discounts, returns, fulfilment, payment fees and other variable costs. Illustration: with a 40% contribution margin, break-even is about 2.5×. Work it out with your own numbers before you set a target.

Illustrative example

You spend PKR 100,000 on Meta and it reports PKR 420,000 in sales. ROAS = 420,000 ÷ 100,000 = 4.2×.

Why can ROAS be misleading?

Platforms report the revenue they attribute to themselves, and in cash-on-delivery businesses they may count orders that are later refused. Compare platform ROAS with delivered revenue in Shopify, or use MER for the whole picture.

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