# What is ROAS?

ROAS, or return on ad spend, is the revenue your ads bring in divided by what you spent on them. Spend $1,000 on ads that bring in $4,000 of sales and your ROAS is 4, also written 4:1 or 400%. A good ROAS is one above your break-even point, which depends on your profit margin.

Updated 7 November 2026

## How do you calculate ROAS?

ROAS is revenue from ads divided by the cost of those ads, over the same period. Amazon's own guide puts it as "the amount of revenue from an ad campaign, divided by the amount spent on the campaign itself".

**ROAS = revenue from ads ÷ ad spend**

A worked example: a shop spends $2,500 on ads in March, and those ads bring in $9,000 of sales. ROAS is 9,000 ÷ 2,500 = 3.6. For every dollar spent, $3.60 came back as revenue.

Google Ads uses the same arithmetic in its help pages. If your goal is $5 of sales for every $1 you spend, you set a target ROAS of 500%: $5 ÷ $1 × 100%. The number is the same whichever way it's written:

| Written as | Means |
| --- | --- |
| 3.6 or 3.6x | $3.60 of revenue for each $1 of ad spend |
| 3.6:1 | The same, as a ratio |
| 360% | The same, as a percentage, as Google Ads shows it |
| ACOS 27.8% | The same, upside down: spend ÷ revenue, Amazon's measure |

Revenue here means sales, usually before costs, which is why ROAS alone can't tell you whether ads made money.

## What is a good ROAS?

A good ROAS is one above your break-even ROAS, and break-even depends on your gross margin. Amazon's guide says there are too many variables to name one benchmark, calls a 2:1 ratio "a bit over the current industry average", and says brands would ideally want to be "closer to 3 or 4". Your own margin decides whether that's good for you.

**Break-even ROAS = 1 ÷ gross margin**

If you keep 40 cents of every sales dollar after the cost of the product, each dollar of ads needs $2.50 of sales just to pay for itself.

| Gross margin | Break-even ROAS | At ROAS 3, each $1,000 of ads leaves |
| --- | --- | --- |
| 20% | 5.0 | A loss of $400 |
| 30% | 3.33 | A loss of $100 |
| 40% | 2.5 | $200 profit |
| 50% | 2.0 | $500 profit |
| 60% | 1.67 | $800 profit |
| 75% | 1.33 | $1,250 profit |

The last column is ads × ROAS × margin, minus the ads. A ROAS below break-even isn't always a mistake: if a first order brings a customer who buys again for years, it can be worth paying more than the first order earns. That's a deliberate choice, though, not something to discover at the end of the quarter.

## What's the difference between ROAS, ACOS, ROI and MER?

They answer different questions about the same money. ROAS and ACOS measure one campaign or platform; ROI counts every cost; MER looks at the whole business.

| Measure | Formula | What it tells you |
| --- | --- | --- |
| ROAS | Ad revenue ÷ ad spend | Revenue for each ad dollar, per campaign or platform |
| ACOS | Ad spend ÷ ad revenue, as % | Amazon's inverse of ROAS: $50 spent for $100 of sales is 50% |
| ROI | (Profit − all costs) ÷ all costs | Whether the whole effort made money, after product, fees and agency costs |
| MER | Total revenue ÷ total marketing spend | How efficient all marketing is together, credited to no one |

Amazon draws the line between the first and third: ROAS "focuses on specific campaigns", while ROI "takes much more of advertising spends or total advertising cost into account".

## Why does each ad platform show a different ROAS?

Because each platform counts the sales it can link to its own ads, by its own rules, and they overlap. A customer who saw an ad on Instagram, later clicked a Google ad and then bought can be claimed in full by both. Add up what every platform reports and the total is often more than you actually sold.

A shop's month might look like this:

| Source | Ad spend | Sales the platform claims | Platform's ROAS |
| --- | --- | --- | --- |
| Meta Ads | $2,000 | $6,000 | 3.0 |
| Google Ads | $1,500 | $4,500 | 3.0 |
| Amazon Ads | $1,000 | $3,000 | 3.0 |
| Claimed in total | $4,500 | $13,500 | 3.0 |
| Actually sold (Shopify and Amazon) | $4,500 | $10,000 | 2.22 |

The platforms say 3.0; the business earned 2.22. That second figure, total sales over total ad spend, is blended ROAS. Platform figures are still useful for comparing campaigns inside one platform. Blended ROAS is the one to judge the business by.

## How do you improve ROAS?

You improve ROAS by spending less on ads that don't sell and making each visitor worth more. In practice:

1. Pause campaigns that sit below break-even for weeks, not days; recent days often get revised as late sales are counted.
2. Raise the average order with bundles or a free-shipping threshold, so each sale an ad brings in is bigger.
3. Check the page the ad lands on: a slow or confusing product page wastes every click.
4. Be wary of ads to people searching your own brand name, since many of them would buy anyway.
5. Make sure conversion values are tracked: Google's Target ROAS bidding needs a value on each conversion, and bids on a platform's own count of sales, which may differ from yours.

## How does Mojobase show ROAS?

Mojobase Numbers shows one blended ROAS: total sales from Shopify and Amazon divided by total ad spend across Meta, Google and Amazon Ads. Sales means what was ordered, before tax, shipping and refunds, measured the same way on both stores so the total adds up. Each platform's own claimed sales appear on its own page, marked as the platform's figure.

Every figure is compared with the period before, and a single day with the same weekday last week. Each morning the AI reads the numbers next to your email and tasks and flags what's unusual, such as ad spend up while sales are flat, and in Quick actions (⌘K) you can ask "why is return on ad spend down this week?" More on the [Numbers page](https://mojobase.ai/numbers).

For reporting-tool choices, compare [Triple Whale alternatives](https://mojobase.ai/alternatives/triple-whale).

## Further reading

1. [About Target ROAS bidding, Google Ads Help](https://support.google.com/google-ads/answer/6268637)
2. [What is return on ad spend (ROAS)?, Amazon Ads](https://advertising.amazon.com/library/guides/return-on-ad-spend-roas)
3. [What is advertising cost of sales (ACOS)?, Amazon Ads](https://advertising.amazon.com/en-us/library/guides/acos-advertising-cost-of-sales)

## Questions people ask

### What does ROAS stand for?

Return on ad spend: the revenue that advertising brings in for each dollar spent on it. Some platforms write return on advertising spend; it's the same measure.

### Is ROAS a percentage or a ratio?

Either. A ROAS of 4 means $4 of revenue for every $1 of ad spend, which can also be written 4:1, 4x or 400%. Google Ads sets its Target ROAS as a percentage, so a target of 500% means $5 of sales for every $1 spent.

### What's the difference between ROAS and ACOS?

They're the same numbers turned upside down. ROAS is ad revenue divided by ad spend; ACOS, Amazon's advertising cost of sales, is ad spend divided by ad revenue, as a percentage. A ROAS of 4 is an ACOS of 25%.

### Can ROAS be too high?

Yes, in a way. A very high ROAS often means the ads mostly reach people who would have bought anyway, such as returning customers searching your brand name, or that you're spending too little to reach new buyers. Growth sometimes means accepting a lower ROAS on more spend.

### What is blended ROAS?

Your total sales divided by your total ad spend across every platform, for the same period. It ignores which ad gets the credit, so it can't be inflated by two platforms counting the same sale, and it's the figure that matches your bank balance.

### What is target ROAS?

A bidding strategy, in Google Ads and elsewhere, where you tell the platform the return you want and it raises or lowers bids to reach it. It needs conversion values to be tracked, and it optimises towards the platform's own count of sales.

## Related

- [Numbers](https://mojobase.ai/numbers)
- [Mojobase and Shopify](https://mojobase.ai/integrations/shopify)
- [Mojobase and Meta Ads](https://mojobase.ai/integrations/meta-ads)
- [Google Ads MCP server for Claude, ChatGPT and your own agents](https://mojobase.ai/mcp/google-ads)
- [Mojobase for ecommerce brands](https://mojobase.ai/for/ecommerce)
- [Shopify and Amazon sales and ad spend, every morning](https://mojobase.ai/use-cases/sales-and-ad-spend-every-morning)
- [Mojobase vs Triple Whale](https://mojobase.ai/compare/mojobase-vs-triple-whale)
- [What is mer?](https://mojobase.ai/learn/what-is-mer)

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Source: https://mojobase.ai/learn/what-is-roas · Updated 7 November 2026