Return on Ad spend (ROAS)

What is ROAS (Return on Ad Spend)?

Return on Ad Spend, better known as ROAS, is an important marketing metric, which app developers use to determine the success (or not) of their advertising efforts.

ROAS Calculation

Put simply, return on ad spend measures the amount of revenue earned for every dollar spent on advertising. The metric is always expressed as a percentage and usually measured over a specific time period, such as three days, seven days, and/or thirty days. Here is the formula:

ROAS = (Revenue From Ad Campaign / Cost of Ad Campaign) x 100

So, all you have to do to calculate ROAS for your company is divide the revenue your latest ad campaign generated by the amount of money you spent on said ad campaign.

Let’s pretend that you spent $1,000 on an ad campaign. After tracking the campaign for seven days, you realize that $2,700 of revenue can be directly attributed to the campaign. In this case, your return on ad spend would be 270% [($2,700 / $1,000) x 100 = 270].

What is a Good ROAS?

New app marketers often ask, “What’s a good ROAS?” Unfortunately, we don’t have a good answer to that question, because it really depends on your company and situation. But, in general, a positive ROAS is considered a good ROAS, while a negative one is not.