Definition
ROAS (Return on ad spend)
ROAS is revenue generated divided by ad spend (e.g., 3.0x means $3 revenue per $1 spent).
What it means
ROAS measures efficiency, not profit. It’s influenced by creative quality, audience intent, CVR, and AOV. Use ROAS alongside CAC/LTV to make decisions about scaling.
Why it matters
- ROAS is a common scaling guardrail for ecommerce teams.
- It helps you compare offers and creatives quickly.
How to improve it
- Improve creative quality (hooks + clarity + proof).
- Increase AOV (bundles, upsells) and improve conversion rate.
Common mistakes
- Confusing ROAS with profit
- Ignoring attribution limits
Related terms
Apply this with free tools
Use August Ads tools to generate better hooks and scripts, then test variants: