ROAS: definition, formula and benchmarks
Updated on February 22, 2026
Quick definition
ROAS (Return On Ad Spend) is the advertising return on investment that measures the revenue generated for every euro invested in advertising. ROAS evaluates the gross effectiveness of a campaign or advertising channel, independently of margins and operational costs. It is the central indicator for media buying teams.
How it works
Formula
ROAS = Revenue generated by advertising / Advertising spend
Example: €4,500 revenue for €1,000 of Google Ads spend = ROAS of 4.5 (or 450%)
A ROAS of 4 means that for every €1 spent, you earn €4 in revenue. Caution: ROAS does not account for production costs, product margins, shipping fees or the cost of returns.
That is why a ROAS of 3 can be highly profitable for a company with an 80% margin (SaaS, services) and loss-making for an e-commerce site with a 15% margin. To calculate the minimum viable ROAS (break-even ROAS): `Minimum ROAS = 1 / Net profit margin`. For a 25% margin, the break-even ROAS is therefore 4.
Roas should always be analysed alongside ROI to obtain a complete picture of profitability.
Platforms such as Google Ads and Meta Ads allow you to set a target ROAS for automatic bid optimisation.
Why it matters
ROAS is the essential indicator for any team managing advertising budgets. It allows the gross profitability of different campaigns, channels and creatives to be compared directly on a common basis.
By tracking ROAS by campaign and audience segment, media-buying teams quickly identify the best-performing combinations and reallocate budgets.
- A ROAS of 8 on a campaign means €10,000 invested generates €80,000 in revenue
- For agencies, ROAS is often contractually defined as a KPI in performance-based agreements
- ROAS helps justify budget increases to leadership
How to improve or use it
- 1Focus the budget on campaigns, audiences and keywords with the best historical ROAS.
- 2Improve your conversion rate (CRO) to generate more revenue from the same advertising traffic.
- 3Optimise AOV via upsell and cross-sell techniques to increase revenue without increasing spend.
- 4Use retargeting to recapture warm audiences at lower cost.
- 5Improve creative quality to increase CTR and reduce CPC.
With Sublim
By connecting your revenue data to Sublim, you calculate the real ROAS of every traffic source in real time — including SEO, email and organic social. Unlike advertising platforms that overestimate their own ROAS via biased attribution, Sublim provides a neutral, multi-channel view of attributed revenue — GDPR-compliant and free from third-party cookie dependencies.
Frequently asked questions
What is the difference between ROAS and ROI?
ROAS measures the gross return on advertising spend only (revenue / ad budget), without taking other costs into account. ROI (return on investment) is broader: it accounts for all costs associated with the campaign (creative production, shipping costs, product margins) to measure real net profitability. ROAS is therefore a measure of advertising efficiency, ROI a measure of overall profitability.
What target ROAS should be set for a Google Shopping campaign?
The optimal target ROAS depends on your product margin. For an e-commerce site with a 30% gross margin, the minimum ROAS to be profitable is around 3.3. In practice, aiming for a ROAS of 5 to 8 on Google Shopping is considered excellent. Start by measuring your historical ROAS, then set a slightly higher target ROAS to push the algorithm to optimise toward better performance.
Can ROAS be skewed by multi-touch attribution?
Yes, the ROAS displayed by advertising platforms is often overestimated because they use their own attribution models that favour the last advertising click. If a user sees an ad, browses your blog, then converts via an organic search, Google Ads can still credit itself with the conversion. Use a neutral analytics tool like Sublim to obtain fairer and more realistic attribution.
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