Return on ad spend is attributed revenue divided by advertising spend, usually expressed as a ratio. The arithmetic is trivial; the difficulty is that both figures are choices. Which conversions count as attributed, and whether spend includes agency fees and creative costs, change the answer more than performance does.
Which revenue should count?
Only revenue the platform attributed to the ad, if you want a figure comparable across campaigns. The moment you mix platform-attributed revenue with total revenue from the same period, the ratio stops meaning anything.
The common inflation is counting all sales during a campaign. Some of those would have happened anyway, and a ROAS built that way rises whenever the business does well for unrelated reasons.
Which spend should be included?
Media spend at minimum. Whether to add creative production, agency fees and tooling depends on the question being asked.
Pick one, label it, and do not switch between them between reports.
- Media only — compares campaigns against each other fairly.
- Media plus fees — tells you whether the activity paid for itself.
- Everything including internal time — the number a finance team recognises.
Why do two tools report different ROAS?
Because they attribute differently. A platform counts conversions it believes it caused, within its own attribution window, using its own view-through rules. An analytics tool counts what it observed on your site.
Neither is lying. Reporting both, labelled by source, is more honest than picking the higher one and presenting it as the truth.
What is a good ROAS?
There is no universal figure, and anyone quoting one is guessing about your margins. A ratio of three is excellent on a high-margin digital product and loss-making on low-margin retail.
The useful benchmark is your own break-even: spend divided by gross margin. Below that you are buying revenue at a loss, whatever the ratio looks like next to an industry average.
Frequently asked questions
- Is ROAS the same as ROI?
- No. ROAS compares revenue to ad spend. ROI compares profit to total investment. A campaign can have strong ROAS and negative ROI once margin, fees and fulfilment are included.
- Should view-through conversions be included?
- Include them only if you report them separately. Bundling view-through into the headline figure inflates it, and the inflation grows with impression volume rather than with performance.
- How does attribution window change ROAS?
- Substantially. A longer window credits more conversions to the same spend, so the ratio rises without anything improving. Compare only periods measured on the same window.