Marketing & Sales Metrics

ROAS (Return on Ad Spend)

Revenue generated per rupee of ad spend — direct measure of advertising efficiency.

Formula: ROAS = Revenue from ads / Ad spend. So ₹3 revenue from ₹1 spent = 3x ROAS. Reported as a multiple, not a percentage.

ROAS is better for ads with direct attribution (Meta, Google, Amazon Ads) and worse for top-of-funnel (display, awareness). For full-funnel measurement, blended ROAS (revenue / total marketing spend) is more honest.

Industry ROAS benchmarks vary wildly: ecommerce often runs 3-5x, retargeting can hit 10-15x, prospecting 1.5-3x. SaaS uses MQL → SQL conversion plus deal-cycle ROAS instead.

India context

Indian SMBs running Meta ads on tight budgets target 3-4x ROAS to remain breakeven on COGS + ad spend. Below 2x typically means losing money. Above 5x usually means under-investing — the ad set is starved and could scale further.

Examples

  • A D2C brand spends ₹1L on Meta, gets ₹3L attributable revenue = 3x ROAS.
  • Retargeting ads alone may show 10x ROAS, but blended ROAS (with prospecting) is 4x.

FAQ

Is ROAS the same as ROI?

No. ROAS = revenue / ad spend (gross). ROI = (profit - cost) / cost (net). ROAS is gross; ROI is net.

What's a good ROAS?

Depends on margin. 3x ROAS at 70% margin = profitable. 3x ROAS at 30% margin = losing money. Always pair with margin.

Why is my ROAS dropping?

Common causes: creative fatigue (test new), audience saturation (expand), bid auction inflation (improve quality), seasonality, attribution loss (iOS 17). Diagnose by ad set.

Related concepts

CACLTVblended ROASMeta AdsGoogle Ads

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Related glossary entries

CAC (Customer Acquisition Cost) — Total marketing + sales spend divided by new customers acquired — measures how much it costs to bring in one customer.LTV (Lifetime Value) — Total revenue (or profit) one customer generates over their entire relationship with the business.

More in Marketing & Sales Metrics

CAC (Customer Acquisition Cost)LTV (Lifetime Value)MRR (Monthly Recurring Revenue)AOV (Average Order Value)RTO (Return to Origin)GMV (Gross Merchandise Value)ChurnMQL (Marketing Qualified Lead)
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