ROAS
ROAS (return on ad spend) is the revenue generated per unit of advertising spend.
In detail
Revenue divided by spend. A ROAS of 4 means €4 of revenue per €1 spent — which may still be unprofitable once margin and fulfilment are included.
For lead generation it only works if lead values are realistic.
Example
€10,000 revenue from €2,500 spend is a ROAS of 4.
Why it matters
It is the clearest test of whether scaling spend is justified.
Common mistakes
- Comparing ROAS against margin-blind benchmarks.
- Counting the same conversion in several systems.
Related questions
Related articles
- Google Ads: 10 Common Mistakes That Waste Your Budget
The recurring reasons paid search budgets disappear without results — and the fix for each one.
Related guides
- The Complete Google Ads & SEA GuideGuide
Paid search from first principles: account structure, keywords and match types, ads, landing pages, bidding, tracking and profitability.
Related terms
- CPA
CPA (cost per acquisition) is what you pay, on average, for one conversion.
- Conversion Tracking
Conversion tracking records the valuable actions people take after clicking an ad or visiting a page.
- PPC
PPC (pay-per-click) is any advertising model where you pay only when someone clicks your ad.
Related questions
- How much should I spend on Google Ads?
Work backwards from value, not from a benchmark. If you know what a customer is worth and roughly how many clicks it takes to win one, you know the most you can afford per click.