WHAT IS ROAS AND WHY IT MATTERS
Return on Ad Spend (ROAS) is the primary metric for paid advertising efficiency. Simple formula: Revenue ÷ Ad Spend. A 4× ROAS means every $1 you spend returns $4.
But raw ROAS only means something if you know what ROAS you need to be profitable — which depends on your gross margin, blended CAC, and attribution model.
WHY PLATFORM ROAS OVERSTATES PERFORMANCE
Meta defaults to 7-day click + 1-day view attribution. Google uses cross-device. Neither matches your actual revenue exactly. Blended ROAS — total revenue ÷ total ad spend — cuts through all platform noise. Calculate both, track the gap, and use blended as your decision-making metric.
WHAT'S INSIDE — PREVIEW
01
ROAS = Revenue ÷ Ad Spend. A 4× ROAS means every $1 returns $4 in revenue.
Core formula · Revenue attribution
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Blended ROAS: Total revenue ÷ total ad spend across all channels. Platform-agnostic truth.
Blended ROAS · Multi-channel
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Industry benchmarks: Fashion (3.5–5×), Supplements (4–6×), Beauty (3–5×), Home (2.5–4×).
Benchmarks · Vertical comparison
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Break-even ROAS: Minimum ROAS to cover COGS and stay profitable.
Break-even · Profitability
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Target ROAS by margin: Formula for setting ROAS targets based on gross margin %.
Margin-based targeting · tROAS
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Platform gap: Meta default 7-day click+1-day view inflates ROAS 40–60% vs. blended.
Attribution gap · Overcounting
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MER (Media Efficiency Ratio): Total revenue ÷ total marketing spend. Most conservative measure.
MER · Media Efficiency · Blended view
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Free tool — no email required. Advanced LTV-adjusted ROAS model behind signup.
Free tool · Advanced model