What ROAS should I aim for?

It depends on margin. A 4:1 ROAS is strong for a business with 30 percent margins and loss-making for one with 15 percent. Calculate your break-even ROAS from gross margin first, then set the target above it.

Is ROAS the same as ROI?

No, and confusing them is expensive. ROAS measures revenue against ad spend only. ROI accounts for cost of goods, fulfilment, agency fees and everything else. A campaign can show an impressive ROAS while losing money once real costs are included.

Paid Search

ROAS (Return on Ad Spend)

ROAS is the revenue generated for every unit of currency spent on advertising, calculated as revenue from ads divided by ad spend.

It measures campaign profitability directly and is usually expressed as a ratio, so a 4:1 ROAS means four baht back for every baht spent. Unlike ROI, it isolates advertising performance rather than total business return. The ROAS that counts as good depends on your margins.

Blended ROAS and platform ROAS answer different questions and should both be tracked. Each platform reports on its own attribution and counts conversions other platforms also claim, so adding them up produces a number larger than the business earned. Blended ROAS, which is total revenue over total ad spend, cannot be inflated this way and is the figure that matches the accounts. Use platform ROAS to decide where to move budget within a channel, and blended ROAS to decide whether the total spend is working. Teams that report only the first tend to be surprised by the second.

Example

An ecommerce campaign returns 5x ROAS: 500,000 baht revenue on 100,000 spend. The product margin is 30%, so gross profit is 150,000, minus agency fees and shipping leaves roughly 30,000. A different campaign at 3.2x on a 60%-margin line nets four times more. The dashboard ranks the first campaign higher; the accounts rank the second. Break-even ROAS here was 3.3, not 1.

Frequently asked questions

What ROAS should I aim for?: It depends on margin. A 4:1 ROAS is strong for a business with 30 percent margins and loss-making for one with 15 percent. Calculate your break-even ROAS from gross margin first, then set the target above it.
Is ROAS the same as ROI?: No, and confusing them is expensive. ROAS measures revenue against ad spend only. ROI accounts for cost of goods, fulfilment, agency fees and everything else. A campaign can show an impressive ROAS while losing money once real costs are included.

Related terms

CPA ConversionROI

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