Short answer: ROAS (return on ad spend) shows how much revenue each unit of advertising spend generates. Formula: ROAS = ad revenue ÷ ad spend. Spending 1 unit to earn 5 units gives a ROAS of 5 (5:1).
A “good” ROAS depends on your margin. Break-even ROAS = 1 ÷ profit margin (as a decimal); with a 0.25 contribution margin, break-even ROAS is 4.
- ROAS measures revenue efficiency of ad spend only.
- ROI includes all costs and shows real profitability.
- CPA is spend divided by conversions, useful for leads.
ROAS can mislead when tracking is broken, platforms double-count conversions, brand searches inflate results or returns are ignored. Improve it by fixing measurement, focusing on high-margin products, optimising landing pages, testing creatives and separating prospecting from retargeting. Racoun sets ROAS targets from client margins and validates platform data against real orders.
Talk to Racoun: we are based in Istanbul and work with brands across Türkiye. Message us on WhatsApp or email ekip@racoun.com.
